Korean battery majors face pressure amid more supply of Chinese sodium batteries

China’s Contemporary Amperex Technology Co.’s sodium-ion batteries [Photo provided by CATL]

South Korean electric vehicle (EV) battery makers are set to face fierce competition against their Chinese peers that are all-out to solidify their leading position in the market for more cost-efficient sodium-ion batteries.

According to industry sources on Tuesday, China’s Contemporary Amperex Technology Co. (CATL), the world’s largest manufacturer of EV batteries, has recently decided to supply sodium-ion batteries to China’s Chery Automobile Co.

Sodium-ion batteries contain sodium instead of lithium, a material widely used in current lithium-ion batteries that are charged when lithium ions move from one side to the other side of anodes and cathodes in a cell.

Sodium-ion batteries have emerged as a substitute for lithium-ion ones. Sodium, found worldwide as part of salt, sells for 80 percent of the price of lithium. In addition, sodium reserves worldwide are 400 times richer than lithium.

Sodium-ion cells are similar to lithium cells in that both have four components - cathodes, anodes, electrolytes, and separators. However, the two types of batteries require different materials used for the cathodes and anodes.

Sodium batteries require aluminum foil while lithium batteries use copper foil, which industry sources believe makes sodium batteries 30 to 40 percent cheaper than lithium ones.

CATL said that the energy density of its sodium batteries is 40 percent higher than the highest energy density of the current lithium battery. The next-generation battery can charge up to 80 percent of power in 15 minutes at room temperature and still have more than 90 percent discharge retention at a low temperature of minus 20 degrees Celsius, according to the company.

The Chinese battery giant will aim to raise the energy density of sodium batteries up to 70 percent.

The wide use of sodium-ion batteries by CATL is expected to add pressure on Korean battery manufacturers.

“Chinese rivals have already dominated the global market with the cost-effective lithium iron phosphate (LFP) batteries,” said a battery industry insider.

[Courtesy of each company]

“Korean battery companies used to think of LFP batteries as substandard, but the rising demand for cost-effectiveness has forced them to join the race to develop LFP batteries.”

Korea is leader in ternary lithium batteries that contain lithium, nickel, cobalt, manganese, and aluminum. Korean battery makers have a strong advantage in the premium lineup with a higher nickel concentration of 80 to 90 percent.

However, they still lag behind their Chinese counterparts in cost-effectiveness as the cost of key materials for batteries such as nickel, lithium, and cobalt is high.

Another factor adding to the pressure is the rising price of lithium.

According to the Korea Mine Rehabilitation and Mineral Resources Corporation, the price of lithium carbonate began to rise from its lowest of 29,077 won ($21.92) per kilogram. The price went up to 33,000 per kilogram as of May 8.

Korea’s top three battery makers are expected to ramp up efforts to advance into the LEP market and strengthen the research on nickel, cobalt, and manganese (NCM) batteries.

Korea’s LG Energy Solution Ltd. (LGES) has been making efforts to develop a manganese rich battery, which contains a higher content of manganese.

SK on Co. and Samsung SDI Co. will aim to develop cobalt-free batteries by 2025 in a bid to gain a cost advantage over their rivals.