US sodium-ion battery firm Natron Energy has ceased trading, putting an end to its two domestic gigafactories. The news points to the challenges for battery chemistries hoping to compete with LFP, analysts told Energy-Storage.news.
The company had operational manufacturing facilities in Michigan and California and an ambitious US$1.4 billion plan for its largest facility yet in North Carolina, targeting 28GWh of annual production capacity. It was primarily targeting the battery energy storage system (ESS) market.
However, local reports say that in late August it informed Michigan officials it would permanently close its Michigan and California facilities. It then proceeded to lay off employees and ultimately kickstart the closure of the company, with its website currently stating it has ‘ceased operations’. It appears to be a voluntary winding down of the company, with no attempt to save or continue it via bankruptcy proceedings.
Ultimately, the company came up against the challenges of competing with lithium-ion technology, said Evan Hartley, research manager for battery materials intelligence firm Benchmark Mineral Intelligence, and Aaron Wade, former upstream battery analyst and program director at not-for-profit association Volta Foundation.
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‘A general trend of new entrants struggling’
“It’s a general trend across the market of those market entrants struggling,” said Hartley, pointing out that similar things had not only happened in the West but also in China.
“They were targeting sodium-ion, which meant they had a much lower pool of demand to target. We
are expecting no more than 3-4GWh of demand for sodium-ion in North America by the end of the
decade. That could change, but it depends on price.”
Its big challenge is that lithium iron phosphate (LFP) battery technology has continuously fallen in price, bar a temporary spike in 2022, and improved its metrics like energy density and cycle life over the past few years.
“Domestic LFP plans have picked up so that sodium-ion demand could evaporate, if the price,
quality, and scale of LFP manufacturing proves far better suited for storage,” Hartley added.
Natron Energy had been seeking out capital from new and existing investors, but ultimately failed to do so. Delays in getting UL certification for its product prevented it from fulfilling orders, the local reports added.
‘Limited value in high cycle life if other metrics are worse’
“The news is significant because they raised so much money. It was small compared to others like Northvolt but still loads,” said Wade, now at battery performance tech startup Gaussion but formerly head of battery costs at Benchmark’s peer CRU Group.
Wade said that Natron may have struggled to keep up with the pace of innovation in LFP batteries and thus fallen behind on price and performance metrics. The company claimed a cycle life of 50,000 for its sodium-ion batteries, far higher than LFP’s 10,000+.
Wade: “They were doing stuff that was a bit different to other sodium-ion companies, but there is limited value in the 50k cycles area if other metrics are worse. Even if you are the best at one thing, if you don’t have all the other areas, it doesn’t matter if your density is low, price is high, you still will struggle against lithium-ion.”
“This is why I bang on about China and Chinese tech because the pace of innovation that is being done is so fast, if you don’t keep on top, your tech becomes outdated so quickly. It’s so hard to move at their speed, if you are benchmarking against 2-3 year old stuff, you are so far behind.”
“Batteries are so new, innovation is so high, if you are trying to do alternative chemistries, the bar keeps going up and up.”
The price and performance of LFP are improving so fast that it is now being used for things people never would have previously suggested, like long-duration energy storage (LDES).
Energy density could be key
Energy density is one metric that is being constantly improved by LFP, with huge implications for the industry. This is because it not only improves footprint efficiency but increasingly reduces overall costs thanks to a reduction in the ratio of battery cells to balance of plant (BOP) equipment. And it is one area where sodium-ion is far behind LFP.
“All of it is coming down to how important energy density is for energy storage,” Wade said. “Three years ago, everyone and I were saying density doesn’t matter, but it’s becoming more and more important, for cost, land and ease of integration. Where sodium-ion will sit is now less obvious, LFP has that advantage.”
Competing with established OEMs
Technology aside, the company’s failure to scale may simply be a case of struggling to compete with larger, established battery OEMs. Many lithium-ion startups have failed to get US domestic gigafactories off the ground, including Kore Power and Freyr Battery, though others have progressed, including Our Next Energy (ONE).
Benchmark Mineral Intelligence’s data shows that Tier 3 companies’ share of forecasted 2030 US battery manufacturing capacity has fallen significantly in the past three years (Tier 3 means companies with no qualified cell production or qualified for portable applications only, so effectively new entrants).
In September 2022, Benchmark forecasted that they would account for 6.8%, or 61GWh, of the 895.6GWh online by 2030. By today, that has fallen in both absolute and proportional terms, to 44.5GWh, or 3.8% of the forecasted 1,182.1GWh online by 2030.
Sodium-ion: some hopeful, but a long way to go
Sodium-ion BESS startups like Moonwatt in Europe and Peak Energy, also US-based, will point to a significant scale-up of the technology’s manufacturing in China and its absolute lower theoretical cost than lithium-ion, because of cheaper raw materials. But Natron’s demise shows it clearly has some way to go.
