How LMFP and Sodium Ion Batteries will Change the Battery Market // 2023, 2025, and 2030

How LMFP and Sodium Ion Batteries will Change the Battery Market // 2023, 2025, and 2030

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Welcome back everyone! I’m Jordan Giesige and this is The Limiting Factor. In the last few weeks, several slides have showed up on X that provide roadmaps for LMFP and Sodium Ion battery chemistries. If we combine those slides with the research that I’ve gathered in the last few years on LFP and High Nickel battery chemistries, we now have enough information to speculate about how the cost and specs for each major battery chemistry will evolve this decade.

So today, I’ll walk you through the slides that were shared on X, build roadmaps for 2023, 25’, and 30’ for what I expect to be the five dominant battery chemistries this decade, and then using those roadmaps, look at how the competitive landscape for batteries will evolve from now until 2030. That is, which chemistries will come to dominate product segments such as EV’s and grid storage. Before we begin, a special thanks to my Patreon supporters, YouTube Members, and Twitter subscribers as well as They specialize in helping investors manage concentrated positions. Rebellionaire can help with covered calls, risk management, and creating a money masterplan from your financial first principles.

Let’s start with this image from Electrios. Electrios brands itself as Asia’s only dedicated lithium ion and electric vehicle consulting firm, but they aren’t very active on X and the image was actually shared by Battery Bulletin. I’ve used several slides from Battery Bulletin in the past, so if you’re on X, I recommend following that account. The Electrios image shows three screen grabs from a BYD presentation on sodium ion batteries.

The top slide is information on their technology, the middle slide shows cycle life and energy density figures, and the bottom slide shows the bill of materials for sodium ion vs LFP batteries. With regards the top slide, for today’s discussion it’s not relevant. That’s because it’s mostly a bunch of technical jargon whereas today I’m focusing on specs and cost, which are shown in the middle and bottom slides. If we take a closer look at those slides, we can see that they provide specs for two separate variants of sodium ion batteries: Those with layered oxide and polyanion crystal structures. People often speak of sodium ion batteries as if there’s one sodium ion chemistry, but reality’s more complex. As I covered in my first video on sodium ion batteries, there are three general types.

Layered oxides, polyanions, and PBA or Prussian Blue Analogues. Generally, layered oxides have high energy density and lower cycle life. That’s in part because they devote more space in the crystal structure to sodium ions, which means more energy stored but less structural stability. That’s opposed to polyanions and PBAs which have low energy density and higher cycle life. That’s because they devote less space to storing sodium ions and more to structural stability.

Beyond energy density and cycle life, in past videos I also covered the potential price floor for sodium ion batteries based on the materials costs. However, in reality, battery technology often takes years of scaling and manufacturing improvements to approach the materials costs. That is, Sodium Ion batteries aren’t going to be hitting $40 per kilowatt hour price points when they’re first produced.

The question is, how long will it take sodium ion batteries to fulfil their potential in terms of energy density, cycle life, and cost, and what will that evolution look like. That’s where these two slides from BYD help out. For their layered oxide batteries, between now and 2025, BYD expects energy density to increase from 140 to 180 watt hours per kilogram, cycle life to increase from 3600 to 6000 cycles, and the bill of materials to drop to 83% of the cost of an LFP battery. For their polyanion batteries, between now and 2025, they expect energy density to increase from 110 to 150 watt hours per kilogram, cycle life to increase from 6000 to 10000 cycles, and the bill of materials to drop to 69% of the cost of LFP batteries.

Nice. How reliable are BYD’s numbers here? As far as I’m aware, although BYD is building factories to produce sodium ion batteries, there’s no evidence that BYD has actually started mass production. So in my view, the specs and cost on BYD’s slide are aspirational. With that said, the information is still useful. That’s because it tells us the specs and cost that BYD hopes to hit in order to be competitive, which gives is an idea of what we might expect from the broader sodium ion battery market.

Let’s take a quick look at each spec for due diligence. First, the energy density specs are a good approximation of what I’ve seen claimed by other manufacturers. Maybe a little bit high, but a good approximation for the purposes of this video.

As for the cycle life specs, they’re very aggressive compared to other claims I’ve seen, so when I transfer all this information to the summary table, I’ll nerf the cycle life specs. As for the bill of materials cost comparison of the two sodium ion chemistries vs LFP, overall it looks good, but I think a brief explanation of the cost differential between the two cathodes would be helpful. The reason why layered oxide sodium ion cathodes are projected to cost more is that they tend to use more metals like Nickel to increase voltage which capitalizes on their key strength, which is energy density. That’s as opposed to polyanion type sodium ion cathodes that tend to use elements like iron for their crystal structure to reduce the bill of materials, which maximizes their key strength, which is cost per kilowatt per cycle.

Finally, before we look at the summary table, it’s worth noting that BYD only provided specs and cost information to 2025, so I’ve had to take some educated guesses as to how the specs and cost would evolve over time. Let’s take a look at the table and I’ll explain my thinking. On screen is a summary of sodium ion batteries for 2023, 25, and 2030.

I’ve added two additional rows beyond what was covered in the BYD slides. First, a row for Volumetric energy density that was extrapolated from other sources. While sodium ion batteries tend to have reasonable gravimetric energy density, they have poor volumetric energy density. That matters in use cases like EVs where range can be limited by poor volumetric energy density but it’s less important for applications like grid storage. Second, I added a row for safety, which is a big selling point for sodium ion batteries. That’s because thermal runaway for sodium ion batteries happens at a higher temperature and even when it does happen, it’s less violent.

Moving along to gravimetric energy density, for 2023 and 2025 I used BYD’s specs, and for 2030 I had to fill in the blank. For layered oxides, I chose 200 Wh/kg, that number should be doable because some sodium ion battery manufacturers like Faradion are already getting close to hitting that energy density today. With that said, Faradion seems to be several years ahead of the rest of the sodium ion battery market. So in my view, 200 Wh/kg is a fair guess for what most sodium ion battery manufacturers could achieve with a layered oxide in 2030.

As for PBA and Polyanion sodium ion batteries for 2030, I’m assuming they’ll follow a similar trajectory as layered oxide cathodes, with most of the energy density gains occurring between 2023 and 2025 and lesser gains from 2025 to 2030. That raises the question: Why do I assume rapid energy density gains earlier in the decade and slower gains later in the decade? It’s because I expect sodium ion batteries will benefit from the knowledge that’s been accumulated from the development of lithium ion batteries, which means they’ll see more improvements more quickly, but also approach their theoretical limits more quickly. Regardless, energy density is a secondary concern for PBA and Polyanion batteries because they’ll be targeting high cycle life use cases like grid storage where energy density isn’t even in the top 3 priorities. Moving along to cycle life, as I said earlier, BYD’s cycle life estimates seemed aggressive, so in my table I knocked them back considerably. For example, BYD estimated 10,000 cycles for polyanion in 2025, whereas I’m showing 8,000 cycles. As for 2030, I assumed a similar improvement in cycle life from 2023 to 2025 as 2025 to 2030 which, like energy density, means decreasing annual improvements over time.

The end result is that my 2030 cycle life figures are roughly comparable to BYDs 2025 figures. Finally cost. For 2023 and 2025 I used BYD’s cost reduction estimates vs LFP and assumed a current cost of $75 per kilowatt hour at the pack level for LFP batteries. That resulted in over $160/kWh in 2023 and $52-62/kWh in 2025. As for 2030 I used cost advice from Faradion and CATL. Faradion expects their sodium ion battery cells, which use a layered oxide cathode, will eventually cost about 28% less than LFP battery cells.

Let’s assume that 28% cost reduction carries over to the pack level because sodium ion batteries may need less pack material to keep them safe. LFP battery packs currently cost about $75 per kilowatt to produce, so 28% less that means roughly $54 per kilowatt hour. However, I went a bit lower and entered $50 dollars per kilowatt hour for 2030. That’s because I expect companies like BYD and CATL to use less Nickel in their layered oxide formulations than Faradion. That may mean a sacrifice in energy density, but would also mean a slightly lower cost. As for PBA and Polyanion cathodes in 2030, CATL expects that their PBA based sodium ion batteries will eventually cost about $40 per kilowatt hour to produce.

Although CATL is using a PBA based cathode and BYD is using polyanion, if they’re using the same materials like Iron and Manganese, they’ll likely end up at a similar cost point. Now that we’ve covered sodium ion batteries, let’s move on to the Soochow Securities slides on LMFP batteries. I sourced these Soochow slides from Active Material, which is another account worth following on X if you’re in to batteries.

It appears that Active Materials used a translation app to convert the original document from Chinese characters to English, so you may notice some wording on the pages that doesn’t make sense. Despite those errors, the information here is likely well researched and sourced. The specs that I can check are fairly accurate and it comes from an analyst house that likely has contacts within the industry, as most analyst houses do. With that said, no one has a crystal ball, so it’s best to view the information as indicative rather than gospel truth. Luckily, despite some of the information suffering translation errors, the key specs appear to have translated well.

Let’s walk through each. In my M3P video I said that M3P and LMFP chemistries should reach a maximum energy density of about 230 Wh/kg, achieve about 2000 cycles, cost about 5% more than LFP battery cells, and have a good safety profile thanks to a high thermal runaway temperature. That roughly aligns with Soochow’s estimate of up to 240 Wh/kg, 2-2500 cycles, good safety that’s comparable to an LFP battery chemistry, and a 5.1% cost premium compared to LFP battery packs.

However, beyond current state, the Soochow slides also give a time progression on several of those specs from now to 2030. First, between now and 2027, it shows the progression of the specific capacity of the cathode from 145 to 155 mAh/g. That could be as a result of either improvements to the manufacturing process or the chemistry itself, but it is something we’d expect as part of the learning curve for the commercialization of LMFP.

That’s because the real world specific capacity of battery chemistries always move toward their theoretical specific capacity as the technology evolves. Second, from 2025 to 2029, it shows the progression of voltage from 3.9 volts to 4 volts. In my view, 3.9 to 4 volts seems high, but my guess is that they’re just using primary operating voltage rather than average voltage. Regardless, what matters is that the voltage slightly increases over time.

Once again, that’s something we’d expect, but this time because increasing the voltage by increasing the manganese content of the cathode is an obvious way to increase the energy density LMFP batteries. But, just because it’s obvious, doesn’t mean it’s easy. As I showed in my M3P video, using manganese generates degradation issues. And more manganese would mean more degradation.

But it's certainly a challenge that could be solved throughout the course of the decade by battery manufacturers. Overall, after taking into account the improvements to both specific capacity and voltage, Soochow shows that the energy density advantage of LMFP increases from 8% greater than LFP in 2023 to 18% greater in 2030. That in turn would be responsible for most of the cost improvements we see at the bottom of the table.

Soochow expects LMFP batteries to cost 5.1% more than LFP in 2023, roughly break even in 2025, and then 8.7% cheaper in 2030. I’m assuming they’re referring to pack level battery cost here because LFP battery packs currently cost about $75 to produce, which aligns with the .56 yuan per watt hour

we see here. Can we trust Soochow’s estimates for energy density and cost? In my view, there are three factors to consider here. First, the 10% energy density improvement they’re expecting seems reasonable, but I’d caution that battery chemistry can present unpredictable challenges that make predicting future increases in energy density inherently fraught. Overall, I’m happy with Soochow’s assumptions here for energy density, but keep in mind that if the energy density increases didn’t pan out, it would have a knock on impact on cost.

That’s because increasing the energy density of a battery tends to reduce cost through more efficient material use. So if the 10% energy density increase turned out to be lower, the cost reduction estimates could be overestimated. Second, however, on the flipside, they expect the price of lithium to drop by 60% throughout the decade whereas I expect it to remain relatively flat or increase.

The decreasing lithium price that Soochow is forecasting actually works to the disadvantage of LMFP battery cost in relation to LFP battery cost. That’s because, as I explained in the M3P video, LMFP batteries have higher voltage than LFP batteries, which means each lithium ion packs more of a punch and therefore less lithium is required per kWh of batteries. So when lithium prices are higher, LMFP batteries will get cheaper in relation to LFP batteries, which need about 15% more lithium per kWh due to their lower voltage. The third note on cost is that due to economies of scale and learning, increases in production capacity naturally lead to reductions in cost. The faster the scale of a product grows, the faster the cost reductions. I expect the growth rate of LMFP batteries, that is the percentage growth rather than absolute volume, to exceed the growth rate of LFP batteries.

So it’s reasonable to assume that if they start at a similar price point, LMFP batteries will see greater cost reductions by 2030. That is, on balance, taking into account energy density improvements, the effect of lithium prices, and relative scaling effects, Soochow’s cost estimates for LMFP battery packs seem reasonable. With that in mind, as with sodium ion batteries, I’ve made this table to summarize the evolution of LMFP batteries for 2023, 25, and 2030.

Once again, bear in mind that I’ve had to fill in some blanks here, and due to that, some of the information is educated guesses. Let’s walk through the table and I’ll explain my thinking. For energy density Soochow didn’t give exact numbers, so I had to extrapolate from their percentages using 195 Wh/kg as the LFP benchmark and added 8, 13, and 18% for 2023, 25, and 2030. That provided 210, 220, and 230 Wh/kg.

For volumetric energy density, I used a leaked roadmap from CATL which suggested LMFP should be capable of 450 to 500 wh/l, so that’s the range I used for 2023, 25, and 2030. For cost I used Soochow’s figures, which appeared to be a pack level estimate. They were listed in Yuan per Wh so I’ve converted them to US dollars per kilowatt hour for my table. As for safety, LMFP should have a similar safety profile to LFP, which is better than high nickel or high cobalt batteries but worse than sodium ion batteries, so I’ve given it a rating of great in the final table as opposed to the excellent I gave sodium ion.

Finally, I’ve kept cycle life steady for the rest of the decade because I expect LMFP battery manufacturers to focus on energy density at the cost of cycle life. That’s because I don’t think LMFP will be able to compete with LFP or Sodium ion in cycle life. So it would make more sense for manufacturers to increase the energy density LMFP to take market share from costlier, high energy density, nickel based batteries.

With the LMFP table complete, the next step is to review the tables I’ve created for LFP batteries and High Nickel batteries. After that, we can combine the information from all 5 chemistries to get a comprehensive view of how the competitive landscape for batteries will evolve in 2023, 2025, and 2030. Along the way, I’ll give my view on which chemistries will come to dominate product segments such as EV’s and grid storage as the decade progresses. On screen is the table for LFP batteries. For the energy density figures, I’ve used the CATL roadmap as a guide but made some adjustments based on my own assumptions. For gravimetric energy density, I’ve entered 195 Wh/kg, which is generous for the average LFP battery cell in 2023.

The primary reason I used this number was to create consistency across the video. 195 Wh/kg was the baseline I used for LMFP battery cells. That in turn was necessary because it appears to me that most sources are comparing LMFP battery cells to the best LFP battery cells rather than an average LFP battery cell. As for 2025 and 2030 I’ve entered 200 and 205 Wh/kg, which I view as more realistic estimates for the average LFP battery cell in those years. Why so little improvement to energy density? It’s because 200 Wh/kg is approaching the limits of what LFP battery cells are capable of with a graphite anode. Furthermore, from here forward I expect that LMFP batteries will carry the torch on energy density for lower cost batteries.

For cost, I’ve once again used Soochow’s pack level cost estimates and converted them to dollars per kilowatt hour. Although many people are going to say that Soochow’s cost estimates for LFP batteries appear conservative, and that they should be more like $50 per kilowatt hour or less in 2030, I don’t necessarily agree and there are a few reasons why. Let’s take a look.

First, I assuming average costs for a tier one battery pack that a company like Tesla would use. I’m sure some companies will outperform and get into the low $50 range, but others will struggle to hit the average $63 per kilowatt hour cost for a high quality battery pack. Second, the introduction of LMFP and Sodium Ion batteries may shift scaling resources from older technologies like LFP and high nickel batteries.

That could result in accelerated improvements to economies of scale for the newer chemistries and slower improvements to economies of scale for the older chemistries like LFP. Third, battery material prices may remain elevated or increase later in the decade due to potential supply shortages. That’s one of the primary reasons why inflation adjusted battery prices have remained flat for the past 4 years.

Fourth, on that note, I’m assuming there’s going to be at least some general inflation in the next 7 years that eats into the cost decreases achieved by scale and manufacturing improvements. Fifth, Wright’s Law says that for every doubling of battery production, battery prices and costs are expected to drop by 18%. In the past, most people assumed that it would be lithium ion batteries that delivered the cost decreases throughout the 2020s. However, in my view, chemistries like LMFP and sodium ion will play a larger role in those 18% decreases than was expected in the pas As we saw earlier, Sodium ion batteries will cost around $40 to $50 per kilowatt hour by the end of the decade.

And as I’ve said in past videos, there’s a chance they’ll hit terawatt scale by the end of the decade. If that’s the case, sodium ion batteries will have a big impact on average global battery cost. That is, regardless of whether $63 per kWh for LFP batteries in 2030 turns out to be accurate, I’m not saying that Wright’s Law is stalling out. Over the past 30 years it’s been a series of battery chemistries that have driven price decreases. Each has its moment in the sun and then is superseded.

As a side note, the image on screen shows that the market share of LFP batteries continues to grow into the late 2020s, but it doesn’t appear take into account the possibility of LMFP batteries. If LMFP batteries prove to be commercially viable, I think they’ll take a slice of the market that’s at least as large as Sodium Ion Batteries. If that’s the case, LFP batteries may be losing market share by the end of the decade even if total LFP battery output is still increasing. So yes, Soochow’s cost reduction estimates for LFP batteries MAY be conservative, but they are feasible if we consider all the factors at play. Next, cycle life. Although some LFP battery manufacturers are claiming that their cells can already hit 12,000 cycles, that’s not most LFP batteries.

5000 cycles is more realistic for the average cycle life of LFP batteries today and I expect it’ll increase dramatically by 2030 as LFP batteries are increasingly designed for energy storage use cases. Finally, as with LMFP batteries, I’ve rated LFP as having a great safety profile. Let’s move on the table for high nickel batteries. Thanks to this graph by About:Energy we can see that the average high-end nickel battery cell for EVs is currently around 260 Wh/kg. I expect that to increase to 280 wh/kg in 2025 and 310 wh/kg in 2030. Yes, there are Nickel based battery cells today using lithium metal anodes, silicon anodes, and solid state electrolytes that can far exceed that.

But, they’re expensive and there aren’t yet plans to scale those chemistries to the point where it would fundamentally change the average energy density of nickel based battery cells produced globally. Beyond that, even if 310 Wh/kg in 2030 is conservative for the average high nickel battery cell and reality ends up being higher, it wouldn’t affect the conclusions of today’s video. That’s because no other mass produced battery chemistry comes close to the energy density of Nickel battery cells, and there’s no realistic competitors on the horizon.

That means cost and cycle life are gonna be the primary determining factors for whether high nickel battery cells are used in a product. As for volumetric energy density, those figures are harder to come by. So what I’ve done is used Tesla’s 2170 battery cell as a benchmark, which is around 270 Wh/kg and 730 Wh/l, and extrapolated from there using the gravimetric energy density figures I estimated above. That resulted in 700 wh/l for the average high nickel cell in 2023, 750 wh/l in 2025, and 830 Wh/l by 2030. As for cost, I’ve assumed a cost decrease of about 10% from 2023 to 2025 and then again from 2025 to 2030.

The cost reduction estimates are again conservative for the same reasons as LFP batteries. The only thing I’d add here is that besides selecting cost estimates that made sense for each specific battery chemistry, I also had to make sure that the cost estimates made sense in relation to each other. For example, the bill of materials estimates show that iron based sodium ion chemistries at scale should cost about half that of a nickel-cobalt based chemistries. That means if Sodium ion batteries hit $40 per kilowatt-hour in 2030 at the pack level, then it would stand to reason that a nickel based chemistry should cost about $77 dollar per kilowatt-hour. As for cycle life, currently, the average EV grade high nickel battery cell is good for about 1200 cycles and I expect that to improve gradually to 1400 cycles by 2025.

However, as the production of single crystal cathodes increases throughout the decade and electrolyte designs improve, I wouldn’t be surprised if the average cycle of high nickel batteries at least doubles to 3000 cycles by 2030. For example, Tesla’s research partner, the Jeff Dahn Research Group, has a battery cell that’s hitting about 20,000 cycles and it’s still going. If that’s the case, why isn’t my estimate more aggressive and more like 10-20,000 cycles? First, because it’ll take time for the technology in a cell like that to go into mass production and raise the average cycle life across the industry.

Second, because many products just don’t need that much cycle life. At 1 cycle per day, 10,000 cycles is over 25 years and the battery would outlast most products that it would be used in. So with that in mind, although there will be high nickel cells on the market in 2030 than can hit many thousands of cycles, 3000 cycles seems like a reasonable guess.

Finally, I’ve given high nickel batteries a safety rating of good. Although they can erupt violently when they go into thermal runaway, battery pack technology keeps their volatile nature in check long enough for the driver and passengers to exit the vehicle. There are of course risks with parked vehicles and home energy storage, but that’s a topic for another day. For now, a good rating will work for the purposes of this video.

That’s because the point is to show relative safety, which can influence which battery a company will use in a product. Now that we’ve covered all the major chemistries, let’s run through comparison tables for 2023, 2025, and 2030. Given that we’ve already walked through each spec on each table, rather than compare each chemistry to every other chemistry, which you can do yourself, I’m going to give my view on what each comparison table means for the broader battery market. By that I mean the chemistries that’ll be best suited to either EVs or Grid Storage, which are the largest battery markets, and why. 2023 is of course current state and LMFP and sodium ion batteries are just beginning to scale.

This year, Sodium ion batteries are expected to take only .3% of the global battery market and I expect the figure for LMFP batteries will be even lower. That means LFP and High Nickel batteries are the only real options for grid storage and EVs. LFP is currently the best option for grid storage because it’s cheap and offers high cycle life, and cost per kWh per cycle is the name of the game for grid storage.

LFP is also the best option for short to mid-range EVs because has decent energy density and it’s cheap. That leaves high nickel batteries with their higher energy density and cost as the best option for long range and luxury EVs. Let’s move on to the table for 2025. For EV applications, sodium ion batteries will become a good option for ultra-compact budget vehicles in China. That’s because they’ll be cheaper than LFP and LMFP batteries but will offer considerably less range. However, in 2025, at most there’ll only about 10 GWhs of sodium ion cells headed for the vehicle market, which is enough for maybe a few hundred thousand vehicles per year.

That means LFP batteries will still be the go to for most short to mid-range vehicles because they’ll be available in much higher volumes. Furthermore, with their unique mix of high cycle life, good energy density, and reasonable cost, they’ll be especially well suited to robotaxis. As for LMFP batteries, I expect that some manufacturers will start swapping out Nickel battery packs for LMFP battery packs to save thousands of dollars per vehicle while also increasing safety and improving cycle life. LMFP could also of course be used for shorter range vehicles for the same cost per kWh, but replacing Nickel battery cells would offer a better opportunity to increase profit margins. Moving on to grid storage, in 2025, PBA and Polyanion sodium ion batteries will offer similar cycle life to LFP batteries but will cost considerably less. That means, where possible, I expect grid storage operators will increasingly begin exploring sodium ion batteries as an option.

ICC Sino expects about 50 GWh of sodium ion batteries for grid storage in 2025. I consider that bullish, but if it does pan out, that could be around 20% of the grid storage market in 2025, which Rystad expects to be around 230 GWh. That is, in 2025, both LMFP and Sodium Ion batteries’ll start taking market share from LFP and high Nickel batteries. However, with the rate that I expect each of those chemistries to scale, the trickle of sodium ion and LMFP batteries will turn into a flood later in the decade. That brings us to the comparison table for 2030.

For budget EV’s, layered oxide sodium ion batteries will be in a position to take the place in the market that LFP batteries take today. Despite their low volumetric energy density at the cell level, their high safety means they won’t need as much material around the cells, meaning good volumetric energy density at the pack level. Couple that with their low cost and they’ll be the best option for a small vehicle with up to and possibly exceeding 250 miles of range. 11a, 11b, 11c, 11d LFP batteries, for their part, will still likely be used for robotaxis because they’ll still offer a better combination of energy density, cycle life, and cost compared to a sodium ion batteries.

As for LMFP batteries, they’ll have the best combination of energy density and cost to displace High Nickel batteries in 3-400 mile range vehicles, and unlike 2025, they’ll likely have scaled to the point where they’re widely available. That’ll leave the high end and mass sensitive segments of the battery market to high nickel batteries, which includes semis, long range pick-up trucks, luxury vehicles, Electric aircraft, and race cars. Moving on grid storage, PBA and Polyanion sodium ion batteries look to be well-positioned to dominate the market. That’s because their cycle life and cost advantages will continue to grow versus LFP batteries, and because they may achieve the scale necessary to take more than 50% of the market for battery energy storage.

Let’s take a look at the assumptions necessary to make that happen. If 70% of Sodium Ion batteries continue to be used for grid storage, and if my bullish 1 TWh forecast for sodium ion in 2030 actually eventuates, then that would be 700 GWh of sodium ion batteries for grid storage in 2030. Rystad estimates that grid storage will be consuming about 1200 GWh in 2030.

If all those assumptions end up being in the right ballpark, Sodium Ion could take almost 60% of the grid storage market and its market share would continue to increase from there. On screen is a summary of the best chemistry by use case in 2030. Note that although there is a best option for each use case, that there are secondary and tertiary options as well, which’ll come into play depending on availability. Let’s tie up a few loose ends before closing out the video. First, note that all the information related to LMFP and sodium ion batteries assumes there are no major production issues or hidden drawbacks for those chemistries. Second, as I said earlier, my cost estimates were based on an average cost, which means that some manufacturers will outperform the rest.

The path forward there is to reduce material costs through vertical integration and reduce non-material costs through manufacturing improvements. For example, on the material side Tesla’s currently constructing a lithium refinery to reduce material costs. And, on the manufacturing side, according to their last earnings call, they seem to be making good progress with their 4680 production line which should increase line speed by about 7 times compared to a typical battery line. At Battery Day, Tesla said those projects would contribute to a 56% cost decrease. Although I expect that 56% cost decrease to be achieved in the next few years, we also have to bear in mind that was 3 years ago. The rest of the industry isn’t standing still and by the time Tesla hits the 56% cost decrease, companies like CATL and BYD will have also made manufacturing improvements.

That makes it difficult to determine what Tesla’s cell costs will be in 2030, but it’s safe to say the cost of Tesla’s in house cells will be quite a bit cheaper than the industry average. The third and final loose end is: What about Tesla’s plans for alternative chemistries? We know from Battery Day that Tesla had plans for a chemistry that was roughly 2/3rd Nickel and 1/3rd Manganese, but I wouldn’t be surprised if they instead shifted to an LMFP chemistry. Although LMFP would have lower energy density than a Nickel + Manganese cathode, it would be cheaper, safer, and likely have longer cycle life. As for sodium ion batteries, Jeff Dahn’s lab is working on that. The Dahn Research Group is testing layered oxide sodium ion battery cells. They’re also working on improving the manufacturing process for sodium based cathode materials by adding calcium to limit moisture issues.

That is, it’s clear Tesla isn’t standing still and as more information comes out, I’ll be sure to cover it. If you enjoyed this video, please consider supporting the channel by using the links in the description. Also consider following me on X. I often use X as a testbed for sharing ideas and X subscribers, like my Patreon supporters, generally get access to my videos a week early. A special thanks to my YouTube members, x subscribers, and all the patrons listed in the credits. I appreciate all of your support, and thanks for tuning in.

2023-10-03 12:15

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