Sodium-Ion Batteries: The Next Frontier for Investors?
Key takeaways
- Sodium-ion batteries could be a cheaper alternative to lithium in powering EVs
- China currently has the lead in developing sodium batteries for commercial use
- A number of promising start-ups are entering the market
As the EV market rapidly expands, so does lithium, as it’s a key part of the batteries that power the vehicles. But a potential sleeper market is sodium-ion batteries, which could rival lithium stocks and be a potential avenue for investors to consider. Let’s get into the details.
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What’s the deal with sodium-ion batteries?
Lithium stocks have produced excellent returns over the last five years, but the raw material’s fortunes are largely tied to EV production. Should another, cheaper battery option arrive on the market, it could be the death knell for lithium. And it might just be here — in the form of sodium ion.
Sodium is more plentiful than lithium, making it cheaper to mine and potentially cheaper to produce EV batteries using the material. Sodium batteries are also safer, as they don’t run hot like lithium batteries run the risk of. The real drawback is they’re not as energy-dense as lithium batteries, so they need recharging more often.
We can easily imagine a dual-market situation happening where cheaper EVs use sodium batteries and more premium models have lithium batteries as standard. But as both markets are in their relative infancy, we’ll have to wait and see what happens.
The big players in the market
Sodium batteries have been around for a while, but the market is still pretty small. Chinese battery specialist CATL is making some big moves in the market, having recently announced it’s made a way to produce a battery with no lithium. CATL stock has gained almost 10% in 2023.
Chinese EV manufacturer BYD is looking to utilize the tech for its vehicles as soon as this year, which could be a good way to gain indirect exposure from the new EV battery technology. BYD stock has risen around 21.5% since this year.
There aren’t many other publicly traded options other than UK-based AMTE Power, but some promising start-ups are emerging. Swedish-based Altris has just secured €4.8 million in funding, while US-based Natron Energy has received backing from United Airlines and plans to accelerate sodium battery production at its Michigan plant.
The bottom line
Sodium-ion batteries are an exciting prospect for investors interested in the quickly developing renewables market. While it’s still small, there are promising signs that sodium battery start-ups are gaining traction — and with it comes potential trading opportunities.
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