The warnings are everywhere, too much sodium is bad for your health as we have been told by adverts and even doctors suggest that patients move to low-sodium salts. However, it is sodium that might turn out to be an environmental saviour in the green energy transition. Until now, a vast majority of batteries that have been used in electric vehicles are of various lithium-ion chemistries. Whilst lithium-based batteries take advantage of the light elemental weight of lithium, there are significant issues around thermal stability and more importantly, going forward major issues around resources, since lithium is not used alone in batteries but in conjunction with other metals and minerals that have their own resource problems.
The most popular battery chemistry used by the global automotive industry currently is known as Lithium-Nickel, Manganese and Cobalt (Li-NMC). The dramatic growth of demand for electric vehicles across the world has led to a shortage of lithium and prices per ton touching US$60,000 and more on the spot markets recently, quadrupling in under a year. Persistent concerns about the ethical sourcing of cobalt, primarily mined in the Democratic Republic of the Congo also are not going away. The recent war in Ukraine has led to prices of Nickel shooting skywards increasing 10 times in the space of a few days which even led to the London Metals Exchange stopping the trade in the metal, has led to a situation where prices for battery packs for electric vehicles which after years of decline have increased between 10-20 in the past few months.
The dramatic growth of demand for electric vehicles across the world has led to a shortage of lithium and prices per ton touching US$60,000 and more on the spot markets recently, quadrupling in under a year.
Lithium-NMC batteries which cost US$ 1,200 per kWh of capacity in 2010 had fallen to as low as US$ 132/kWh in 2021 (and on a per-cell basis for unfinished batteries, prices were as low as US$ 100/kWh) and have seen prices nearing US$ 200/kWh in global markets in 2022, but a shortage of lithium coupled with a global semiconductor shortage has meant that there will be a shortage of batteries by 2024-2025, followed by a lack of raw materials by 2027–2028.
This is despite a gradual shift towards Lithium-Ferro-Phosphate (LFP) chemistry batteries that albeit heavier than Li-NMC batteries as well as suffering from ‘battery memory’ issues are less resource-hungry than Li-NMC, with iron and phosphate being significantly cheaper and more environmentally friend to extract and refine than the metals in Li-NMC. Advances in electric vehicle battery management software (BMS), much of it written in Indian technology hubs such as Hyderabad and Bengaluru, have alleviated earlier problems with LFP cells. This is why India’s largest carmaker Maruti-Suzuki, in conjunction with Toyota Motor Corporation, Denso, Panasonic, and Toshiba is establishing a facility in Gujarat that will finish manufacturing battery packs using LFP cells although the cells will for now be imported from BYD in China.
This statement also hides an important fact to consider in the electric mobility transition, China’s domineering control over much of the resources required for the electric vehicle transition. The Communist Party leadership in China has made the transition to electric vehicles an important lever of state policy, deploying billions of dollars to developing charging infrastructure across the country, subsidising manufacturing by Chinese manufacturers from electric two-wheelers to large commercial vehicles and ensuring that acquiring the resources required for electric vehicles across the world is an important foreign policy aim. Whilst China has amongst the world’s largest proven reserves of Lithium, Chinese companies control mines in Australia and increasing in South America as well. China also controls much of the mined cobalt today in the Democratic Republic of the Congo and has a domineering control of rare-earth metals that are required for electronic components. As a result, China dominates Lithium-Cell manufacturing with companies like CATL, BYD, and Gangfeng Lithium accounting for over three-quarters of global cell production, although finished battery packs are often manufactured elsewhere. China also dominates the manufacturing of charging systems.
China also controls much of the mined cobalt today in the Democratic Republic of the Congo and has a domineering control of rare-earth metals that are required for electronic components.
China’s attitude towards electric mobility is best displayed through its treatment of Elon Musk’s Tesla Motors. There was a realisation at higher levels of the Chinese state apparatus that getting the latest technologies in electric vehicle manufacturing and software will require certain concessions to be made. Therefore, unlike many other automobile manufacturers who were required to form joint ventures with Chinese partners, Tesla was given special permission to set up a fully owned subsidiary in China. Tesla’s ‘Gigafactory’ in China produced 484,130 vehicles, half of the carmaker's annual production. Tesla also has a strong position in the Chinese market and has played a major role in popularising electric cars in China. However, now China’s own carmakers such as Shanghai Automobile Industrial Corporation (SAIC) which sells cars under the MG brand in India and BYD are becoming large global players in their own right and both companies are operating in India as well. BYD has a fully-integrated manufacturing chain making everything from the Lithium-Ion cell to the finished cars, trucks and buses. Whilst the Biden administration in the United States is taking measures to start mining for lithium and other important metals and minerals in the American southwest, progress has been slow due to environmental concerns. India has been very slow to either prospect for Lithium and other materials, especially from the perspective of national interest let alone the urge to move to zero tailpipe emissions, policy matters have not incentivised the demand-side adequately, especially in passenger cars, which for better or for worse remain the gold standard in transportation. A ham-handed pursuit of Elon Musk and Tesla to set up shop in India is evidence of this. That said, the FAME-1 and FAME-2 incentives have played their part and there are increasing numbers of electric vehicles in India, especially in public transit and two-wheelers.
State governments such as those in Delhi and Maharashtra have also given generous incentive packages, however, with subsidies capped at a certain level, they make little or no difference to sales of larger vehicles but have helped promote electric two-wheelers although some suspect that the recent spate of thermal runaway incidents was because several ‘new’ players in the two-wheeler space were nothing more than traders assembling sub-standard products. Unlike in China, and many other nations, electric vehicles do not have a lower rate of taxation at the point of sale than regular internal combustion engine vehicles. The Finance Ministry has been loathed to cut import duties on completely built-up electric vehicles leading to the Kia EV6 which costs US$54,000 in the United States (around INR 42 lakh at current exchange rates) starting at INR 60 lakhs in India. However, the Performance Linked Incentives (PLI) offered by the government to certain manufacturers including Maruti-Suzuki, Hyundai, Kia, Mahindra, Tata in passenger cars and Hero Motocorp, Bajaj, TVS, and Piaggio in two-wheelers to promote electric vehicles should encourage more manufacturing out of India.
India has been very slow to either prospect for Lithium and other materials, especially from the perspective of national interest let alone the urge to move to zero tailpipe emissions, policy matters have not incentivised the demand-side adequately, especially in passenger cars, which for better or for worse remain the gold standard in transportation.
However, therein lies an important issue. Whilst India will manufacture electric vehicles, it might be a significant amount of time before manufacturing of the cells takes place in India. Whilst Australia opens up their mineral resources for exploitation by Indian companies, especially in the Lithium-rich areas in Western Australia, India will be highly dependent on China for critical elements of the electric supply chain going forward. This will be no different than India’s reliance on countries in the Arabian Peninsula for oil and natural gas, but unlike deep civilisational ties between India and Arab nations, India and China are not friends. Despite a strong trade relationship, events in eastern Ladakh where a deadly border clash occurred in 2020 as well as India’s increasing pivot to the West, through partnerships such as the ‘Quad’ between Australia, Japan, India and the United States have made the relationship tougher.
Is there a solution for India over here?
There might be an interesting way out and that is the continued development of Sodium-Ion battery technology.
Whilst we are still in the early stages of Sodium-Ion (Na-Ion) battery chemistry development, it is important to note that progress has been substantial in this area over the past few years. On the last day of 2021, Reliance New Energy Solar announced a GBP 100-million buyout of British sodium-ion technology firm Faradion along with an investment of GBP 25-million for further development and commercial rollout with a particular focus on India’s fast-growing electric vehicle segment. That said, it is the largest manufacturer of Lithium-Ion cells in the world, Chinese firm CATL that is supercharging the development of Lithium-Ion technologies and has already commercially deployed the first generation of such batteries and is in the process of not just developing an industrial supply-chain for Na-ion cells by 2023 but also coming out with the second-generation of Na-ion technology within a few months if patent filings are to be believed.
It is not as if sodium-ion cells do not have disadvantages, by simple elemental weight, sodium is heavier than lithium, which makes Na-ion cells heavier. There is also the fact that Na-ion cells are less energy-dense than li-ion cells. The latest generation of Li-NMC cells can store 250Wh/kg as well as run at higher voltages that allow you faster charging and discharging (for performance). Even LFP cells can now store up to 220Wh/kg whereas the first generation of Na-Ion cells is at just 160Wh/kg currently and run at lower voltages.
The latest generation of Li-NMC cells can store 250Wh/kg as well as run at higher voltages that allow you faster charging and discharging (for performance).
That said, the single biggest advantage of Sodium batteries will be the easy availability of the resources required on such cells. Sodium is not just a key component of readily available salt which can be extracted easily, Soda Ash or washing soda as it is commonly called is easily mined on sedimentary rocks and available almost globally. Another key part of the Na-Ion, as described by CATL and other researchers is something called Prussian White which is derived from a common ferrocyanide pigment called ‘Prussian Blue’. Also, Sodium is much less corrosive than the types of Lithium used on cells currently which will allow the usage of cheaper materials like aluminium instead of copper both in the electrolyte as well as the battery frame. The usage of these cheaper and lighter materials will offset some of the weight disadvantages of Sodium over Lithium.
In addition by not using Cobalt, issues around ‘ethical mining’ are also taken care of. Indeed, Soda Ash extraction and refining is nowhere near as environmentally concerning even as Lithium. As mentioned above, Nickel prices have also skyrocketed thanks to the recent war and Na-Ion cells do not need significant amounts of this metal, although Nickel will continue to play a major role in the automotive industry because of its use in the high-strength steel frames of cars and motorcycles. And to top it all, Sodium cells are far more thermally stable than Li-Ion cells where widespread instances of thermal runaway have occurred even in India.
The pace of development is stunning and as mentioned above, the costs of Li-Ion battery packs have fallen dramatically in the past twelve years. There is significant research being conducted on Na-Ion cells across the world both at an electro-chemical level and also on the battery management software side of things that can manage the cells. Those in the automotive industry suspect that Sodium cells can easily replace Lithium-Ion cells in applications where speed through rapid power discharging is not critical, for example, heavy commercial vehicles both for passengers and freight, all sorts of low-speed vehicles such as local delivery two and three-wheelers and even small hatchbacks. The lower costs of Sodium-Ion could potentially mean electric cars made available in India at prices around Rs 6-8 lakh if one uses a 2022 price benchmark.
Those in the automotive industry suspect that Sodium cells can easily replace Lithium-Ion cells in applications where speed through rapid power discharging is not critical, for example, heavy commercial vehicles both for passengers and freight, all sorts of low-speed vehicles such as local delivery two and three-wheelers and even small hatchbacks.
That said, one should not get very excited. It took scientists decades to tame Lithium and use it as an energy storage medium and thermal runaway incidents still occur. We are not aware of the potential pitfalls of Sodium cells just yet, with issues like disposal and as well as how they age not yet being thought of. How many cycles can they be charged before degrading? Can they be fast-charged and what are the other electrochemical properties? Li-NMC and LFP cells are guaranteed for over eight years and as the earliest electric cars from the current generation hit the eight-year mark as well as high cycles of charging and discharging, the learnings have been interesting, to say the least from these real-life examples. Batteries have retained their state of charge better than predicted in some cases and others have had to be destroyed due to climatic conditions.
The industry, that is both automotive and cell manufacturers are still learning, but it is imperative to not put all her eggs in the lithium basket especially since she has no lithium resources. Investments have to be made by the Government and India’s private sector to fund the research and development of such alternate electrochemical technologies to protest India’s core energy interests going forward in the coming decades if India is to achieve her goal of net-zero emissions by 2070 as promised by Prime Minister Narendra Modi at Glasgow.
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