Sodium Ion Batteries for Vehicles // Analysis
Welcome back everyone! I’m Jordan Giesige and this is The Limiting Factor. In my first video on Sodium Ion batteries, I said that CATL’s upcoming Sodium Ion batteries were well-suited to grid storage. That led to some pushback in the comments that emphasized the viability of sodium ion batteries for vehicles. In my view, sodium Ion batteries are definitely viable for vehicles, but that’s dependent on the type of vehicle that you’re referring to, whether you’re talking next year or 5-7 years from now, and how other chemistries on the market will develop during that timeframe. So today, I’ll walk you through my thinking and give you a high level overview of how I expect the sodium ion battery market to develop for vehicles between now and 2030, how that might fit in with Tesla’s plans for a robotaxi or small car, and why all that doesn’t change the fact that sodium ion batteries are better suited the much larger energy storage market. Before we begin, a special thanks to my Patreon supporters and YouTube members. This is the support that gives me the freedom to avoid
chasing the algorithm and sponsors. As always, the links for support are in the description. What seems to have first triggered the discussion on Sodium Ion for vehicles is the fact that CATL has advertised that their first generation Sodium Ion cells are hitting 160 Wh/kg of energy density at the cell level and that in the next year or two they expect to get that up to 200 Wh/kg. This is roughly the same gravimetric energy density that CATL is getting out of their LFP battery cells.
However, there’s a reason why CATL is advertising the gravimetric energy density and not the volumetric energy density. Although there aren’t publicly available volumetric energy density specs for CATL’s sodium ion battery chemistry, based on similar chemistries, I figure their energy density is around 260-320 watt hours per liter at 160-200 Wh/kg, or 35% less than an LFP battery cell. This is the primary reason why I said that sodium ion is better suited for grid storage than electric vehicles. For most electric vehicles, volumetric energy density is the first or second priority because the more space a battery cell takes up for a given energy density, the fewer cells that you can squeeze under a vehicle, which limits range. For grid storage, the space that the battery packs take up doesn’t affect their commercial viability and the priority is cost per kwh per cycle. Commercial energy storage is all
about cost control and that’s where sodium will absolutely dominate other chemistries. If all those assumptions are true, then it should follow that the majority of sodium ion battery cells will be used for grid storage rather than vehicles, and that’s where things appear to be headed. ICCsino, a Chinese industrial consulting company, estimates that there will be 160 GWh of Sodium Ion production by 2026. Of that,
70% is forecast to go into energy storage, 11.3% into scooters, and only 18.3% into vehicles. That is, sodium ion can be used for vehicles, but it’s really more of a side show than the main event. With that said, things will get more interesting over time in the vehicle space. Let’s look at how the use cases for sodium ion in vehicles will evolve from now until 2030 for a variety of use cases. I’ll start with the Chinese market, then Western markets using the Model 3 as an example, and then Tesla’s upcoming compact vehicle. There’s two vehicles that have shown up in
reporting out of China. The first is a test vehicle created through a joint venture by Volkswagen and JAC, which uses a Hina Sodium Ion battery. That is, this vehicle isn’t in production yet. It has 252 kilometres of range, but that’s on a Chinese
test cycle. On an EPA test cycle, that would be more like 187 kilometres or 116 miles of range. Hina advised that the first vehicles to use sodium ion batteries will be A00 class EV’s like the VW/JAC test vehicle. A00 class EVs are ultra-compact vehicles that weigh less than 800 kilograms. They didn’t say why sodium ion is suited to cheap ultra-compact vehicles, but in my view, it’s for 3 reasons: First, small vehicles are more efficient and can squeeze more range out of the low energy density sodium ion battery packs. Second, LFP batteries for the time being will be considered a more premium battery option than the sodium ion batteries because they’ll offer more range. That means the LFP batteries will be used in vehicles that are larger, more expensive and have larger profit margins.
Third, when sodium ion batteries do hit scale, they’ll be cheaper and therefore better suited to budget vehicles. Let’s look at the next vehicle example: The BYD Seagull is rumoured to be the first vehicle in China that’ll offer a sodium ion battery. Although BYD denied the rumours and I don’t like operating off rumours, I think it still serves as a good example. The sodium ion version of the vehicle is expected to have 300 kilometres of range versus the 400 kilometres of range for the LFP version. That’s about 138 vs 184 miles of real world range, which is a 33% range hit for the sodium ion battery pack and exactly what we’d expect as a result of sodium ion’s lower volumetric energy density. So,
even if the rumour isn’t true, it’s at least technically feasible. The cost information from the rumour is also feasible. The rumour indicates that, currently, at low volume, sodium ion batteries are $96/kWh and that BYD hopes to get that price down to $74 per kilowatt hour when they hit high volume production. Those prices roughly
align with prices I’ve seen touted by other sodium ion companies. BYD doesn’t specify what high volume means, but I’m assuming they mean in the low tens of gigawatt hours. That is, at low volume, Sodium Battery cells will actually be slightly more expensive than LFP batteries cells, which have a production cost of between $75 to $85 per kilowatt hour. Then, at volume production, they’ll be roughly the same price. But, that’s just the beginning. After that, with each cumulative doubling of production, which should happen every 1-2 years, I expect the price should decrease by about 18%. I chose 18% because that’s the Wright’s Law learning curve for batteries. With that in mind, by the end of the decade, the production cost
of sodium ion battery cells using primarily iron and manganese will probably bottom out at around $40 per kilowatt hour, which would around $50 per kilowatt hour at the pack level. So yes, sodium ion can and will be used in vehicles, but I expect that the first vehicles to use sodium ion batteries will be budget Chinese commuter vehicles which need to be as cheap as possible and where range isn’t a big consideration. Then as the energy density of sodium ion increases, it’ll expand beyond cheaper Chinese commuter vehicles to Chinese Sedans and vehicles in western markets. On that note, let’s move on to markets like North America, Europe, and Australasia. What’s the best case scenario for sodium ion in a vehicle like the Model 3? Let’s take the 260-320 Wh/l figure I estimated for CATL’s sodium ion batteries and combine it with their current and upcoming battery pack technologies, which are referred to as cell to pack 2.0 and 3.0. Cell to pack 3.0 is also known as Qilin. These pack technologies have packing efficiencies of 55% and 72% respectively. Yes, CATL did say that the packing efficiency of
the Sodium Ion battery could be over 80% due to the fact that it’s such a safe chemistry, but I view that as a long term aspiration rather than something we’ll see in the first generation. After factoring the 260 to 320 Wh/l figures with cell to pack 2.0 and 3.0, the pack level energy density ends up between 143 to 230 wh/l. If we use the long range Tesla Model 3 as a benchmark,
that would provide about 214 to 345 miles of range. However, that comes with some big caveats. First, the estimates on screen don’t take into account the extra weight of the lower energy density packs, which would handicap the upper end of the range figures. Second, most of the estimates are based on marketing material or internal strategy documents, which I’ve come to find are highly aspirational for all battery companies, Tesla included. Let’s look at the figures extracted from CATLs marketing material and internal documents vs reality with two examples. First, the Standard Range Plus Model 3 using CATL LFP battery cells has 272 miles of range. That battery pack should be getting a bare minimum of 285 miles of range if the marketing material was correct. And as you can see in the video on screen
from Munro and Associates, except for the row of cells removed for analysis, with this architecture the pack appears to be at its cell capacity limit. Second, CATL advised that their Qilin battery pack would be capable of hitting 255 Wh/kg with a high nickel chemistry. The first implementation of the Qilin battery pack with a high nickel chemistry by Zeekr is said to be hitting 200 Wh/kg. That’s an excellent number and the best on the market as far as I’m aware, but it’s only about 10% better than a Tesla, despite CATL’s claims that they would be hitting 255 Wh/kg, which would mean besting Tesla by 30-40% With that in mind, I’d be surprised if the first generation of CATL’s Sodium Ion battery pack hits Tesla’s minimum requirement of 250 miles of range in a Tesla Model 3. In fact, if it hits 200 miles of real world range in any vehicle this year, I’d be very impressed. So, in my view, it’s likely we won’t see
a CATL Sodium Ion battery in a Tesla Model 3 until the 2nd or 3rd iteration of the pack, which may not happen until later this decade. For an entry level luxury vehicle like the Tesla Model 3, instead of using Sodium Ion, I see it as more likely that CATL builds an LFP battery pack that provides up to or even beyond 300 miles of range. LxFP is also a possibility, but it might initially increase the pack cost and could have eccentricities such as higher resistance and reduced cycle life compared to LFP. By LxFP I mean derivatives of LFP that are doped with elements such as manganese to increase voltage and therefore energy density.
However, many people are wondering about the viability of Sodium Ion for the upcoming small Tesla or Robotaxi that Tesla’s been teasing for 3 years. For the purposes of this video, I’ll call that car the Tesla mini. As this electric vehicle core efficiency chart shows, the smaller the vehicle the greater the efficiency. That’s because smaller vehicles weigh less and have less drag. If we extend the efficiency line for Tesla up and to the left for a Tesla mini, we’d easily be looking at over a 15% improvement to range. Then, if we take my low end figure of 214 miles of range for a sodium ion battery pack for a Model 3 and add 15%, that could mean a Tesla mini using sodium ion would hit 246 miles of range, which would be acceptable range for an urban commuter car. Given that Sodium Ion batteries are expected to go into GWh scale production this year when CATL forms a basic industrial supply chain for it, and given many people in the Tesla community are expecting a Tesla mini class vehicle in 2024, what are the odds that a Tesla Mini would use sodium ion batteries? I’d put the odds at less than 10%. Heres’ why:
Tesla’s said that they expect their next generation platform will be produced at higher volume than all of their vehicles combined, that they’re on a 2 for 1 target, and that they’re trying to get to a production cost 50% below the Model 3 and Y. In other words, the next generation vehicle will be small and produced at a volume of millions of units per year. Tesla’s Model Y lines currently produce about 250,000 vehicles per year. Those production lines will likely be able to produce 500,000 vehicles per year when fully staffed. If production effort is cut in half, we might expect Tesla’s next generation lines to produce 1 million vehicles per year. As for the size of the battery pack, I expect
it will be about 40 kWh, plus or minus 5 kWh. If the vehicle launches in 2024 and we assume 12-18 months to hit volume production at the first factory in Mexico, that means each Tesla Mini line could require 20 GWh of total battery cells by 2025. I say each line because if Tesla wants to continue growing at 50% per year, they may need to either concurrently or successively launch multiple lines in North America, Asia, and Europe. If that’s the case, the 20 GWh figure could be conservative and it might be more like 20 to 60 GWh of cells that are required. Whether it’s 20 or 60 GWh of cells in 2025, it seems doubtful that Tesla could secure all the sodium ion battery supply it would need for a ramp that aggressive. There’s several reasons for that. First, there are a number of players entering the sodium ion battery space and CATL won’t have a monopoly. That is, there may not be a single manufacturer that will be able to
supply the 20 to 60GWh of sodium ion batteries Tesla would need in 2025 for a Tesla mini. Second, if that’s the case, it’s doubtful Tesla would be willing to use multiple sodium ion battery packs from multiple manufacturers for the Tesla Mini when they could just use one LFP battery pack from one supplier. Third, even if I’m wrong and one supplier alone, such as CATL, could supply 20-60 GWh of cells in 2025, cell suppliers tend not to put all their eggs in one basket for reasons that range from stability to profit. Fourth, and finally, the next generation Tesla will be as important as the original Beetle to VW, or the Corolla to Toyota. Whether it’s one manufacturing line or several, it doesn’t make sense to me that Tesla would make the launch of arguably their most important vehicle ever dependent a sodium ion chemistry that’s never seen scale production before. To wrap things up on the Tesla mini, to me, the chemistry that makes the most sense for the first few years of production of the Tesla Mini is tried and trusted CATL LFP battery cells. LFP is CATL’s
flagship chemistry and they’re scaling like mad. 20 GWh or even 60 GWh would be a fraction of their annual growth in production capacity from 2024 to 2025. Then, later this decade when sodium ion does hit serious scale, Tesla could offer it as an even cheaper alternative to LFP. On that note, when sodium ion does hit the current energy density of LFP, will it eventually dominate the EV market in the late 2020s and into the early 2030s? In my view, no. To understand why, let’s zoom out to get a broad, long-term view of battery cell chemistries, demand, and use cases.
Tesla provided us with two slides on battery day about where they see the demand for battery cells. The first slide was for renewable energy, or grid storage. They expect that 10 TWhs of annual production capacity is required. So long as sodium ion lives up to its promise, there’s no reason why it can’t eventually be used for all these grid storage applications and dethrone LFP as the king of energy storage. As I said earlier, that’s because sodium ion will have the lowest cost per kWh per cycle of any commercialized battery chemistry. Based on a quick estimate, it would cost 80% less than an NMC chemistry and 33% less than an LFP chemistry. Moving on to the second battery demand slide,
Tesla showed that another 10 TWhs of battery cells are required to electrify transportation. Which of these vehicles can sodium ion be used for? The Semi needs an expensive high energy density Nickel chemistry to maximise its commercial viability. Luxury sedan, SUV, and long range truck owners will demand maximum range, so they’ll also use a nickel chemistry. That won’t always be the case, particularly in China, but for Europe, North America, and Australasia Nickel chemistries will be the go-to chemistry for mass sensitive and long range vehicles. The last 5 GWh’s for small to mid-sized vehicles is where things will be the most dynamic. For the next couple of years, I expect LFP to remain king for smaller classes while sodium ion goes through an early scaling and product verification phase in ultra-budget Chinese vehicles. Then,
from 2025 to 2030 sodium ion will work its way into most small vehicles in China and then into small vehicles in Western markets. However, what about mid-sized vehicles like the Model 3 and Y? As I suggested earlier, in the next 2-4 years, sodium ion doesn’t make sense for entry level luxury sedans and SUVs. This is because as battery chemistries improve, those customers will likely prefer improvements to range over a cheaper vehicle with less range. This will be especially true when Tesla starts making a cheaper vehicle like a Tesla mini to fill the commuter car niche. Beyond the next 2-4 years it’s difficult to say how the market will evolve for entry level luxury vehicles. But what I do know is this, there’ll be a variety of chemistries on offer and by 2030 sodium ion may be able to offer 300 miles or range or more in a mid-sized sedan. If that’s the case, I’ll take a wild stab in
the dark and say that by 2030 Tesla will offer a sodium ion option for the Model 3 or Y that gets more than 300 miles of range while costing around $35,000 in today’s dollars. In summary, the maximum market opportunity for Sodium Ion appears to be about 30% of the electric vehicle market, or 3 terawatt hours by 2030. As the technology scales and improves, between now and 2030, it’ll work its way from budget electric vehicles in China to budget vehicles in western markets and potentially into mid-sized sedans. That’s in contrast to energy storage, where the market opportunity is the entire market, or 10 terawatt hours. However, to saturate the total market opportunity for vehicles and energy storage, it will probably take until the end of the 2030s. I think in the last video some people viewed the
fact that I said that sodium ion will take time to scale as slight against CATL or sodium ion batteries. That certainly wasn’t the intent. I don’t think we can make a rapid transition to sustainable energy without sodium ion. Forecasts indicate that battery material constraints will begin to weigh on the industry in the next few years and due to those constraints, growth in lithium ion battery cell supply will start to wane. The materials required for sodium ion batteries are abundant rock forming elements, which would take pressure off the materials constraint problem. It’s just the nature of manufacturing and the scale involved here that means sodium ion won’t take over the market overnight. It’s going to
take millions of people, billions of tonnes of material, and well over a decade to create 13 terawatt hours of annual battery cell production. On that note, one of the things I’m most excited about this year in battery technology is to find out how much capacity CATL is installing for their first major sodium battery cell factory. When we know that, we can start staking out with greater accuracy what the S-curve for sodium ion will look like and I’ll be happy to adjust my bullish forecast if it turns out I’m wrong. But there’s a good chance that revision may be downward. If you enjoyed this video, please consider supporting me on Patreon with the link at the end of the video or as a YouTube member. You can find the details in the description, and I look forward to hearing from you. A special thanks to Tesla Boomer Mama for
your generous support of the channel, my YouTube members, and all the other patrons listed in the credits. I appreciate all your support, and thanks for tuning in.
2023-04-20 16:57
