Why EV battery makers are in a race to develop cheaper cell materials

Shift to sodium-ion or lithium-sulphur could make batteries two-thirds cheaper and reduce China's industry dominance

Workers connect a battery pack to a Chevrolet Bolt. Reuters

American and European start-ups are racing to develop new batteries using two abundant, cheap materials — sodium and sulphur — that could reduce China's battery dominance, ease looming supply bottlenecks and lead to mass-market electric vehicles.

Today's EVs run on lithium-ion batteries — made with lithium, cobalt, manganese and high-grade nickel — the prices of which have soared. Western producers are struggling to catch up with their Asian rivals and car makers expect supply bottlenecks to hit production around the middle of the decade.

The EVs of the future — those arriving after 2025 — could shift to sodium-ion or lithium-sulphur battery cells that could be up to two-thirds cheaper than today's lithium-ion cells.

But their promise hinges on potential breakthroughs in electrochemistry by such start-ups as Berlin-based Theion and UK-based Faradion, as well as Lyten in the US.

Newer battery chemistry has problems to be overcome. Sodium-ion batteries don't yet store enough energy, while sulphur cells tend to corrode quickly and don't last long.

Still, more than a dozen start-ups have attracted millions of dollars in investment, as well as government grants, to develop new kinds of batteries.

For now, China dominates battery production, including the mining and refining of raw materials.

Benchmark Mineral Intelligence, a UK-based consultancy, estimates that China has 75 per cent of the world's cobalt refining capacity and 59 per cent of its lithium processing capacity.

"We're still dependent on a material supply chain from China," said James Quinn, chief executive of British sodium-ion battery start-up Faradion, which received more than $1 million in government grants from Innovate UK before it was bought by Indian conglomerate Reliance last year for $117 million.

"If you look at the global geopolitical implications of that, it's a challenge for energy security, economic security and national security."

Asian battery giants are also working on new chemistry. China's CATL has said it plans to begin producing sodium-ion cells in 2023. Korea's LG Energy Solution aims to start making lithium-sulphur cells by 2025.

The single most expensive element of an EV battery is the cathode, which accounts for up to a third of the cost of a battery cell.

Most EV batteries today use one of two types of cathodes: nickel cobalt manganese (NCM) or lithium iron phosphate (LFP). NCM cathodes are capable of storing more energy, but use costly materials (nickel and cobalt). LFP cathodes typically don't hold as much energy, but are safer and tend to be less expensive because they use materials that are more abundant.

The cost of key cathode materials such as nickel and cobalt has skyrocketed in the past two years. That's why so many companies are hoping to substitute cheaper, more abundant materials such as sodium and sulphur, if their technical limitations can be overcome.

"Sodium-ion definitely has a place, especially for stationary storage and low-end vehicles in cost-sensitive markets such as China, India, Africa and South America," says consultant Prabhakar Patil, a former LG Chem executive.

"The introduction cost for lithium-sulphur is likely to be higher — even though it has the potential to be the lowest cost — making consumer electronics the initial application."

Michigan-based Amandarry and British start-up AMTE Power are developing sodium-ion batteries using sodium chloride — basically table salt — as the main cathode ingredient. They do not need lithium, cobalt or nickel, the three most expensive battery ingredients.

Jeff Pratt, managing director of the UK Battery Industrialisation Centre — a state-funded £130 million ($153 million) factory that rents out production lines to start-ups to test battery chemistry — said he was trying to fit a sodium-ion start-up's cells into a packed production schedule because it was "strategically important" to Britain's hopes of being at the forefront of developing new, better batteries.

US firms Lyten and Conamix, Germany's Theion and Norway's Morrow are developing lithium-sulphur cathodes that still need lithium in smaller quantities, but neither nickel nor cobalt.

By using ubiquitous cathode materials — sulphur is widely used in fertiliser, so is cheap like salt — these start-ups claim battery costs could be slashed by up to two thirds, potentially making EVs affordable beyond the middle class.

Current EV battery packs typically cost between $10,000 and $12,000.

"If we can hit the targets we've identified with some of the world's largest car makers, then we're off to the races," Conamix chief executive Charlotte Hamilton said.

The battery start-ups say they are talking to major car makers, some of which are actively testing new batteries that could be on the road in mass-market EVs before the end of the decade. The car companies are keen to keep their options open.

"Over time, more [battery] chemistry will come out," said Linda Zhang, chief engineer on Ford's F150 Lightning electric pickup truck. "It would be silly not to take advantage."

At Tesla's 2020 Battery Day, chief executive Elon Musk said a "three-tiered approach" to lithium-ion batteries using different materials would be needed to build "truly affordable" EVs — mainly with iron-based LFP battery cells — as well as larger, more powerful and expensive EVs using nickel-based NCM or NCA cells with cobalt or aluminium cathode material.

Battery developers hope they can add sodium-ion and lithium-sulphur batteries to the range open to the car industry.

Duncan Williams, managing director of advisory Nomura Greentech, said recent discoveries were closing the gap on issues such as energy density and durability, "so we would expect to see both of these alternatives taking market share in the future".

Michigan-based Amandarry is already producing sodium-ion cells at its plant in Haining, China, so those cells won't qualify for incentives under the US Inflation Reduction Act.

The company says it will also build a plant in North America.

Partner Amy Chen says Amandarry's first transportation application will likely be electric two-wheelers.

Aside from a cost advantage, Chen says Amandarry's batteries can charge really fast — 80 per cent in 15 minutes.

AMTE Power chief executive Kevin Brundish said the company was initially launching with batteries for stationary energy storage systems, such as those used by grid operators, where energy density is less important.

The company's batteries were already competitive with LFP cells and it had formed a joint venture for energy storage with agribusiness giant ICM Australia, Mr Quinn said.

He said at relatively low scale Faradion's batteries should be a third less expensive than iron-based LFP batteries.

Sulphur is a "wicked hard chemistry" to make work in batteries, says Celina Mikolajczak, chief battery technical officer at California-based start-up Lyten, which has attracted $47.5 million from investors, according to investment website PitchBook.

But, she said, it was "the chemistry of the future, the chemistry that makes batteries mass market".

Ulrich Ehmes, chief executive of Theion — ancient Greek for sulphur — says the problem with sulphur is that it is so corrosive that it kills a battery after 30 charges.

But he said the Berlin-based company, which is backed by a handful of angel and private investors, has developed a way to treat and coat a lithium-sulphur electrode that should make it last an EV's lifetime.