Can Europe challenge China on sodium-ion batteries?

Sodium-ion batteries have gone into mass production, a milestone for a world that has been relying on lithium-ion cells for the energy transition. 

These novel cells use sodium, a globally abundant element that can be extracted from sea salt, instead of lithium, which is a critical mineral mined and processed in just a few countries. Their commercial rollout gives hope to countries that intend to enhance the resilience of their supply chains.

Chinese companies are leading the world in bringing sodium-ion batteries to the masses, riding on their manufacturing supremacy in lithium-ion cells. The new technology has already been used in energy storage plants and on small vehicles there. It may soon start powering heavy trucks.

To many, the development comes as no surprise. “The reality…is that China is still very much leading Europe in all of the battery and energy storage technologies, sodium-ion included,” says Sarah Montgomery, chief executive of Infyos, a UK-based supply chain intelligence platform for renewable manufacturers. 

Sodium’s abundance is highly attractive to Europe as it seeks to reduce its dependence on China-controlled supply chains and spur homegrown manufacturing. Europe aims to make locally“almost 90 percent” of the batteries it will need by 2030, but it currently holds “very little” of the global battery supply chain, according to the International Energy Agency (IEA). In comparison, China dominates every stage of the downstream battery supply chain and is home to nearly 85 percent of global cell production capacity, the IEA said.

Europe’s efforts to pursue the technology largely take place in the lab rather than on the factory floor, according to various sources interviewed for this article. But R&D is only a small step in the long journey towards mass-producing batteries, several of them warn.

“The hardest thing for any western company is to mimic is the 20 years of experience that Chinese companies now have,” Aaron Wade, an electrochemical engineer, tells EEI. Wade visited more than 20 battery factories in China during the past two years. “They are so far ahead,” he says.

But sodium-ion cells are facing an uncertain future due to the low prices of lithium driven by oversupply. This makes it hard for them to grab market and cut cost.    

Regardless of sodium-ion’s future, most sources spoken to by EEI agree that if Europe wants to have a home-grown battery industry of some sort, it must work with Chinese companies and learn from them.

Sodium’s uncertainty

The research of sodium-ion and lithium-ion batteries both began around 50 years ago. But lithium-ion cells’ huge commercial success in the 1990s – spearheaded by Japanese firms – caused the study of the sodium-ion technology to be largely abandoned until a few years ago. 

In the interim, only a few companies in the world worked in the field. One of them was Faradion, which was founded in the UK in 2010. Another was HiNa Battery Technology, a Chinese startup established in 2017. 

“It was essentially an academic topic,” Philipp Adelhelm, a professor of physical chemistry at The Humboldt University of Berlin, tells EEI. Adelhelm has researched sodium-ion batteries for more than 15 years. 

Sodium-ion cells have lower energy density than lithium-ion cells, meaning they can pack less energy into the same size. But their advantage is also clear: they can be much cheaper to produce at scale, perform better in sub-zero conditions, and charge rapidly. More importantly, sodium’s high accessibility can potentially reduce manufacturers’ reliance on heavy metals like cobalt and nickel that can be toxic to humans and free them from supply chain choking points. 

“Europe’s efforts to pursue the technology largely take place in the lab rather than on the factory floor”

Although safety has been described by many as an advantage of sodium-ion cells, Adelhelm says the claim that they are “intrinsically safer” than lithium-ion batteries is not true. 

“This is not only because there are different varieties of lithium-ion and sodium-ion batteries, but also because safety is a very complex topic that can be discussed on different levels.” But Adelhelm says there are “plenty of ways” to make batteries safer.

A defining moment for sodium-ion cells came in July 2021 when Chinese battery behemoth CATL launched its first battery made with the technology. The move kickstarted a new trend among battery makers, which had been looking for low-cost alternatives to lithium-ion cells due to the price hikes of raw materials, says Phate Zhang, founder of the Shanghai-based EV news outlet CnEVPost. The price of lithium jumped a staggering 400 percent in 2021 due to soaring demand for electric vehicles (EVs) and Covid-19 lockdowns. It continued to increase for much of the following year.

But sodium-ion’s fate quickly ran into uncertainty when lithium saw a price collapse from late 2022 to most of 2023. Mining and refining companies across the world had ramped up production, while demand for EV grew at a slower-than-expected rate. Sluggish prices have continued until today.

Some companies have had to close. US startup Bedrock Materials, which focused on developing sodium-ion cells, wound down its operation in June after two years. 

“Our modelling pointed to a clear outcome: in a world where lithium remains abundant, today’s sodium-ion batteries can’t compete on cost – even at commercial scale,” its co-founder Spencer Gore wrote on social media, explaining the decision.

The technology’s commercialisation has slowed down, too. In 2021, the industry expected that to happen in a year or two, says Wade, who leads business development at Gaussion, a London-based startup that has developed a rapid-charging battery technology. Now he thinks it could take another three to five years for sodium-ion cells to be used on a large scale. 

“The trend has swapped completely,” he points out. Battery makers and buyers are now focusing on lithium iron phosphate (LFP) cells due to their low prices, he adds. 

LFP is a type of lithium-ion battery that does not use cobalt or nickel. It is cheaper, safer and more sustainable than nickel manganese cobalt (NMC) cells, which are widely used in the west. LFP cells have been the dominant lithium-ion cells in China for the past few years.

Seeking niche markets

Nevertheless, there are firm believers in the technology’s future. 

“Sodium-ion batteries are a typical disruptive innovation,” Tang Kun, co-founder of China’s HiNa Battery Technology, tells EEI. “As technology continues to progress, their energy density can keep improving and their production costs can be lowered further, especially when manufacturing reaches a bigger scale.”

HiNa is betting big on the technology. It opened China’s first gigafactory for sodium-ion cells in late 2022 with its partners. A year later, it launched a sodium-powered car in partnership with automaker JAC Motors. 

Last year, HiNa started mass manufacturing two commercial products using its self-developed and self-produced chemistry: one for storing renewable energy for the grid and the other for powering two-wheelers. A third product is due to hit the market in October: a fast-charging battery to power heavy trucks.

“Sodium-ion is one of the few existing technological options that can potentially beat lithium-ion cells in cost-effectiveness,” Tang says.

Sodium-ion cells’ main market is energy storage because the size of a battery matters less when they are fixed in a location. But like HiNa, many Chinese companies are actively exploring niche markets. The strategy could provide a future for the technology, Lü Yanlin, an analyst at market intelligence website Shanghai Metals Market, tells EEI.

In the heavy truck sector, for example, drivers cannot afford long pit stops, so sodium-ion’s fast-charging feature could be valuable for them, according to HiNa. Their battery can fully charge in 20 minutes, the company says. And because trucks have more space than cars, they can just use more sodium-ion cells to make up for their lower energy density, Lü says. 

Lü thinks that sodium-ion cells will likely complement rather than displace lithium-ion cells in the future, and that they will have a bigger chance bagging market share from lead-acid batteries, which have even lower energy density and shorter lifespans.

The two and three-wheeler sector is a good example. Earlier this year, Yadea, a major Chinese two-wheeler manufacturer, put sodium-ion batteries into its Vespa-like scooters and developed a fast-charging ecosystem for them. The company hopes to use Asia’s vast market for small vehicles to drive sodium-ion’s commercialisation.

Another example is a vehicle’s starter battery, which provides a burst of electric current to start the engine. More than 20 Chinese battery manufacturers including CATL have announced plans to make sodium-ion starter batteries, according to Starting Point Sodium-ion, a Chinese think tank.  

“Both internal combustion engine and electric vehicles around the world need starter batteries. It will be a sizeable market for sodium-ion,” Lü says.

As for the much-prized EV market, luck is yet to come for sodium-ion. Chinese companies have launched three models, but only a couple of hundred of them were sold in total last year, according to Starting Point, a drop in the ocean in China’s massive EV market.

“In the short term, it will be difficult for sodium batteries to be used on a large scale in passenger cars,” says Zhang of CnEVPost, because lithium-ion cells are cheap and can promise longer range.

In the long run, different battery technologies are expected to serve different types of EVs. “For instance, high-end sports vehicles typically necessitate high power density, best met by high-nickel lithium-ion batteries. In contrast, for entry level vehicles, battery cost is crucial, making LFPs and potentially sodium-ion batteries attractive options,” Brigita Darminto, an analyst at Oslo-based research and intelligence company Rystad Energy, tells EEI.

Europe’s role

No European company is mass-producing sodium-ion cells right now. Nor are Japanese, Korean or US companies.

But some plans have been announced in Europe. For example, French startup Tiamat has partnered with Chinese manufacturer Wuxi Lead Intelligent Equipment to build a five gigawatt-hour (GWh) factory in northern France, scheduled to be completed by 2030. Its first phase, which has an annual production capacity of 0.7GWh, is expected to start operation in 2026 following a delay, according to Darminto and a report. 

Tiamat has been working with Chinese battery manufacturer Zenergy to produce sodium-ion cells in the latter’s 25GWh factory in east China since 2023, and has tapped into the electric power tool market as a potential outlet for its cells.

In Sweden, a company called Altris has been using abundant elements, such as salt, wood, iron and air, to create the material for a cell’s cathode, the electrode where electricity flows out. It has teamed up with Volvo Cars recently to develop battery energy storage systems.

California-based startup Lyten has acquired all remaining assets of Northvolt, once Europe’s homegrown battery hopeful that collapsed into bankruptcy last November. Northvolt was developing the sodium-ion technology before collapsing, but it remains unknown whether it will produce sodium-ion cells if it makes a comeback.

“No European company is mass-producing sodium-ion cells right now. Nor do Japanese, Korean or US companies.”

There are also a series of government-funded consortia working on the R&D front. One of them is EPISODE, which has received over €6.5 million from the European Commission to develop sodium-ion technologies at mass-manufacturing scale. ENTISE and SIB:DE FORSCHUNG are two ongoing programmes funded by the German Federal Ministry of Education and Research. They received around €7.5 million and €14 million, respectively, and aim to speed up the industrialisation of sodium-ion cells. 

“One of Europe's big strengths is that it can carry out really high-quality research and development, and innovation. I think there is a lot of that going on in Europe at the moment [for sodium-ion],” says Ben Nelmes, executive director of New AutoMotive, a UK-based independent transport research organisation.  

But some warn that R&D alone is not enough if Europe wants its own battery supply chain. “There is a very big difference between developing something in an R&D lab, and developing it on a pilot-production scale, and then developing it at large-scale production,” says Montgomery at Infyos. “In order to do that, you need the technical expertise and know-how.”

The lack of battery workforce is a challenge for Europe. “Let's say, a lab in Germany, the US or UK has this great innovation. Who's going to manufacture it? The answer is either a German or Chinese company. And the Chinese company is going to do it better at this point because they have the talent,” says Cory Combs, who researches critical minerals and supply chains at Beijing-based consultancy Trivium China. 

Many, including Wade, see collaboration with China as the way forward. Europe should “swallow its pride and understand that Chinese companies are the best…find ways to work with them to share their knowledge,” Wade says. What European companies really need is to start making cells and use their revenue to do R&D rather than “changing all the battery chemistry and shooting for the moon”, he adds.

China’s lead is unlikely to shrink anytime soon. By 2034, the global manufacturing capacity for sodium-ion cells is projected to exceed 500 GWh, and China would account for over 90% of that, according to Zheng Jiayue, an analyst at Wood Mackenzie. 

“China is expected to maintain a dominant position,” she tells EEI.