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Are investors betting on bad EV batteries?

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With all the battery technologies springing up like mushrooms, it’s not easy to pick the winners. However, the latest bold bet on the next new powerpack seems to have gone awry.

The world’s largest battery maker, Contemporary Amperex Technology Co., or CATL, unveiled the sodium-ion power pack last year to much fanfare. He had cleared a key hurdle for this strain and said he was building a supply chain and was in talks with automakers.

The battery kept its promises. At the time, CATL’s deputy director of research said that while the energy density of its new sodium-ion power supplies was lower than that of current lithium-ion, they had other advantages. , such as maintaining their performance in cold weather and fast charging. Late last month, the company said it plans to start mass-producing them next year.

On paper, the material cost for these batteries is about 30% lower than the lithium-ion variety. There is also no risk of fire. They charge quickly and have longer life cycles. After CATL made the big announcement, other companies followed with their releases as well as big-name investors.

Turns out the reality is a bit different. Sodium-ion power packs, which have gained popularity as a cheaper alternative, are not as effective for electric vehicles as previously believed, according to recent research. They have all the attributes of a good EV battery, but are best used only for backup power or two-wheelers in most cases. In some formulations, for example, they can provide high power for short periods, ranging from one minute to 10 minutes. That’s barely enough for a car.

Moreover, if this battery were to be adapted for electric vehicles, the energy density of its cells would have to increase by at least eight times to approach what electric vehicles need. To do this, metals such as nickel would have to be added. The sodium-ion type also needs more components and workmanship to deliver the same power, as one battery startup founder told me. A CATL executive also acknowledged that while raw materials like sodium are cheap to start with, the end product doesn’t cost less than lithium-ion. This brings us back to the same problem: expensive powerpacks.

Some manufacturers are also starting to report shortcomings. Recently, Guangzhou Tinci Materials Technology Co., the world’s largest maker of electrolytes – the part that allows ions to flow – called these batteries “worthless”. He highlighted CATL and how the company has not yet been able to use them for electric vehicles or large-scale energy storage systems. This is just one example of a promising and trending battery technology that doesn’t deliver what the companies originally promised. Sodium-ion batteries may well improve in the long term and be ready for use in green cars to replace lithium-ion, but they are not there yet.

With all the incentives and funding floating around now, it’s hard to imagine companies and startups refraining from saying too much, too soon to please investors. It is therefore increasingly important for companies and funders to read between the lines and get to grips with the science, before making big bets and making promises, no matter how complex the chemistry. This is the only way for them to determine what is going to have a substantial impact, what is incremental and what is too far removed from reality to be truly commercially viable.

Without that hard work, we’re not going to see cheaper batteries or electric vehicles, but lots of great ideas and lots of wasted money.

More from Bloomberg Opinion:

• If we want lithium, let China fund it: Liam Denning

• Stanford scientists create a billionaire factory: Chris Bryant

• The fantasy of battery technology does not correspond to reality: Anjani Trivedi

This column does not necessarily reflect the opinion of the Editorial Board or of Bloomberg LP and its owners.

Anjani Trivedi is a Bloomberg Opinion columnist covering industrial companies in Asia. Previously, she was a reporter for the Wall Street Journal.

More stories like this are available at bloomberg.com/opinion

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