Chinese battery manufacturer CATL introduced its innovative Sodium-ion Battery, commonly referred to as the ‘salt battery,’ during its Tech Day event in Shanghai on April 21. This new technology, which eliminates the need for expensive lithium and is safer than traditional alternatives, is poised to stir global competition in the EV battery market.
Why Sodium-Ion Batteries are Creating Buzz
CATL claims that sodium-ion batteries offer significant advantages. These include improved cost efficiency by replacing lithium with sodium, enhanced safety with a reduced risk of fire, and superior performance in cold temperatures compared to lithium iron phosphate (LFP) batteries. The energy density of this battery is rated at 175 watt-hours per kilogram, closely aligned with LFP batteries, which range from 165 to 180 Wh/kg.
How CATL‘s Salt Battery Impacts Korean Manufacturers
Korean battery giants LG Energy Solution, Samsung SDI, and SK On have chiefly focused on nickel-cobalt-manganese (NCM) technology, lauded for its high performance and energy density. These companies aim to mass-produce LFP batteries starting this year to compete with low-cost alternatives dominated by China. CATL’s rapid introduction of sodium-ion batteries, backed by government support, has heightened concerns among Korean manufacturers.
Industry experts suggest that the budget-friendly sodium-ion technology might primarily affect the lower-end LFP market. Korean companies remain well-positioned in higher-tier markets, especially in regions like the United States, which prioritize energy density and performance.
The U.S. Market’s Preference
The United States favors NCM batteries due to its vast geography and consumer demand for SUVs and pickup trucks requiring longer ranges. High-nickel NCM batteries, with an energy density of around 300 Wh/kg, dominate the market. According to data from SNE Research, NCM batteries made up 93.3% of the U.S. EV battery market in 2023, whereas LFP batteries accounted for just 5.3%.
In addition to technical superiority, global trade dynamics play a role in U.S. preferences. The Inflation Reduction Act (IRA) incentivizes sourcing materials from within the United States, which poses challenges for LFP batteries reliant on Chinese components. This legislation strengthens NCM’s appeal in this region.
Korean Manufacturers Adapt to the Challenge
In response, leading Korean companies are advancing high-voltage mid-nickel NCM batteries. This solution optimizes voltage to reduce nickel content (to 50-70%) while maintaining high energy density, allowing them to maintain cost-effectiveness and competitive performance.
LG Energy Solution plans to start mass production of these batteries in 2025, offering automakers an attractive alternative. Market projections by LMC Automotive suggest that NCM batteries will regain market share, rising from 46.7% globally in 2024 to a predicted 60.9% by 2030.
Jang Jung-hoon, an analyst at Samsung Securities, emphasized the need for Korean firms to focus on maintaining their technological edge. “CATL’s diversification into sodium-ion and LFP technologies poses a strategic challenge. But Korean manufacturers have a unique opportunity to capitalize on advanced NCM battery technology.”
Sodium-ion technology might not immediately disrupt the premium EV battery sector. Nevertheless, the growing portfolio of Chinese battery makers underscores the importance of innovation and adaptability in the global battery race.
For Korea, maintaining dominance in the high-performance EV segment remains critical to navigating this competitive landscape.
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