Northvolt, the Swedish industrial start-up that enjoys the backing of Volkswagen (ETR:VOWG_p), BlackRock (NYSE:BLK) and Goldman Sachs (NYSE:GS), has developed what it thinks could be a breakthrough in battery technology that could achieve the twin aims of propelling the world towards zero carbon emissions while reducing exposure to China.
The company has developed a sodium-ion battery that does not rely on critical metals such as lithium, cobalt, or nickel, which have been subject to supply chain volatility and price fluctuations.
Opening up new green markets
Northvolt CEO and co-founder Peter Carlsson said that this breakthrough technology could be worth tens of billions of dollars and open up new regions like the Middle East, Africa and India for battery-powered energy storage.
He envisions that within a decade, the demand for energy storage could rival or surpass that of batteries for electric vehicles, for which Northvolt has already secured orders worth US$55 billion.
Carlsson emphasised the importance of reducing dependence on China's strategic supply chains, making Northvolt a key player in Europe's efforts to compete with dominant battery manufacturers from China, Korea and Japan.
Northvolt has already begun manufacturing lithium-ion batteries in Sweden and plans to establish additional plants in Canada, Germany and Sweden.
Sodium-ion batteries offer a more cost-effective and safer alternative to lithium-based batteries for energy storage, performing well in extreme temperatures.
Northvolt has achieved an energy density of 160 watt-hours per kilogram (Wh/kg), approaching the levels of typical lithium batteries used for energy storage, which range from 250 to 300 Wh/kg.
Unlike some Chinese competitors that use metals like nickel, cobalt or manganese in their sodium-ion batteries, Northvolt's innovation relies on Prussian blue, a pigment dating back to the 18th century.
First non-Chinese player
The company intends to provide customer samples next year and scale up production by the end of the decade, potentially becoming the first non-Chinese player to validate sodium-ion batteries for energy storage.
Commentators caution that the success of sodium-ion batteries will depend on factors such as lithium battery prices and the rapid adoption of the new technology.
Nevertheless, Northvolt remains confident that sodium-ion batteries could be up to 25% cheaper than traditional lithium batteries for energy storage. Additionally, this technology promises enhanced thermal capabilities and sustainability, making it an attractive option for regions like the Middle East, Africa and India.
Northvolt is also exploring the possibility of going public, with a potential valuation of $20 billion US dollars as early as next year. This move aligns with the company’s commitment to securing adequate financing and reducing dependence on market conditions.
In the evolving landscape of energy storage, Northvolt's breakthrough in sodium-ion battery technology represents a significant step towards reducing reliance on critical metals and enhancing the sustainability of energy solutions.