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Northvolt has made a breakthrough in a new battery technology used for energy storage that the Swedish industrial startup says could minimize dependence on China for the green transition.
The Swedish group, backed by Volkswagen, BlackRock and Goldman Sachs, has developed a sodium-ion battery that does not contain lithium, cobalt or nickel, critical metals that manufacturers have rushed to obtain, causing price volatility.
Peter Carlsson, CEO and co-founder of Northvolt, told the Financial Times that the new technology could be worth tens of billions of dollars as it opens up regions such as the Middle East, Africa and India to battery-powered energy storage for the Swedish Group. .
He estimated that within 10 years the energy storage order pipeline could be “as large or potentially larger than the current pipeline” of electric vehicle batteries, for which Northvolt has received orders worth $55 billion.
“We are not as dependent on several of these strategic supply chains that China has created very efficiently,” he added.
Northvolt is currently Europe’s best hope to compete against major Chinese, Korean and Japanese battery manufacturers. It has started making lithium-ion batteries for cars and trucks at a factory just below the Arctic Circle in Sweden, and has plans for three more plants in Canada, Germany and Sweden.
Sodium ion batteries are considered a cheaper and safer alternative to the lithium batteries widely used for energy storage, as they perform better at both very high and low temperatures. But the amount of power they can produce relative to their size has long lagged behind lithium batteries, making sodium cells currently impractical for most electric vehicles where space is at a premium.
Northvolt said Tuesday that it had validated a sodium-ion battery at the critical level of 160 watt hours per kilogram, an energy density close to that of the type of lithium batteries typically used in energy storage. Lithium batteries used in electric cars have an energy density of up to 250-300 Wh per kg.
Outside experts said Northvolt had gone further than many Chinese competitors such as CATL, the world’s largest battery maker, which used oxides containing metals such as nickel, cobalt or manganese in its sodium-ion batteries. Using metals makes them more expensive and less safe as they could catch fire at lower temperatures.
Instead, Northvolt’s sodium-ion batteries use Prussian blue, a pigment first used in the 18th century to make blue paint and whose potential for batteries was first discovered by Nobel laureate chemist John Goodenough.
It hopes to provide the first samples to customers next year and reach full-scale production by the end of the decade. It would need new factories in addition to the four currently planned to produce lithium-ion batteries for vehicles.
“It’s very important to be the first ex-China player to have a sodium ion product validated for energy storage,” said Iola Hughes, research manager at battery consultancy Rho Motion.
But he said the potential success of sodium-ion batteries would depend on the price of lithium batteries, which have fallen in recent months, and how quickly manufacturers like Northvolt could scale the new technology.
“Investors are less enthusiastic than last year and some of the future development of the sodium-ion supply chain may be delayed or even cancelled,” he said of Chinese groups producing sodium-ion batteries. “The low price of lithium has made the cost-effectiveness of the sodium ion less evident,” he added.
The Swedish group considers that the price of lithium is not a reliable reference point due to constant price fluctuations.
Carlsson said he thought sodium-ion batteries would be about a quarter cheaper than the lithium batteries typically used for energy storage, which themselves are cheaper than those used in electric cars. He added that replacing graphite with hard carbon would also reduce the carbon footprint of the new sodium-ion battery, while it could withstand up to three times the heat exposure of lithium batteries.
“The combination of thermal capacity, cost and sustainability makes us very optimistic about the possibility of the technology. . . “This is a really big opportunity for areas like the Middle East, Africa and India,” the Northvolt CEO said.
While Northvolt has invited bankers to apply for positions in a stock market listing that could value it at about $20 billion starting next year.
Carlsson said Northvolt was making sure it was prepared to become a public company, but also that it had enough financing in case market conditions did not improve.
“We are making sure that we are not dependent on whether an IPO window opens or not,” he added. People familiar with Northvolt’s fundraising have said it is preparing more than $5 billion in debt financing for its existing Swedish factory.
