Alternative Battery Technologies

Lithium-ion batteries-particularly lithium-nickel-cobalt-manganese (NCM) variants-have emerged as the gold standard in the global transition to cleaner energy and electrified transportation. Known for their high energy density, long life cycles, and efficient performance, NCM batteries power everything from electric vehicles (EVs) to large-scale energy storage systems. However, a looming shortage of key raw materials will bottleneck battery production growth. As supply constraints intensify, manufacturers turn to alternative technologies that rely less on scarce or geopolitically sensitive resources.

Lithium Batteries: A Foundation Built on Fragile Supply Chains

Lithium-NMC batteries are dominant for their performance benefits-nickel increases energy density, cobalt enhances stability, and manganese contributes to battery safety and longevity. The intricate supply chain for these batteries depends heavily on a few countries for raw materials. Lithium, a cornerstone of lithium-ion batteries, is primarily sourced from Australia, Chile, and China. As of the early 2020s, global lithium supply stood at just under 500 kilotonnes (kt) of lithium carbonate equivalent (LCE), with Australia contributing nearly 45% of the total. However, lithium demand is expected to skyrocket in the coming years, driven by the rapid adoption of electric vehicles and large-scale energy storage systems. By 2030, global demand is expected to reach around 3,200 kt of LCE-more than six times the 2021 supply levels.

Despite efforts to scale-up production, current expansion plans are projected to deliver only around 1,500 kt by 2030, covering less than half of the anticipated demand. Without new mining and refining projects, this shortfall could severely disrupt EV manufacturing and delay the global transition to electrified transport, hindering progress toward reducing urban emissions goals.

Nickel, another key material, is facing a similar trajectory. Countries such as Indonesia and the Philippines are expanding their production capacities, with Indonesia expected to supply over 50% of the world’s nickel by 2030. However, a projected 10% shortfall in nickel supply by the end of the decade, along with environmental and regulatory challenges could further complicate the supply outlook.

Cobalt’s Ethical Conundrum and Manganese’s Understated Risk

Cobalt though used in smaller quantities, presents the most controversial supply issue. The Democratic Republic of Congo (DRC) supplies roughly three-quarters of global cobalt, raising concerns over labor practices, political instability, and environmental degradation. Despite efforts by automakers such as BMW and Tesla to source cobalt more responsibly or reduce its usage, the DRC’s dominance remains a significant challenge.

Meanwhile, manganese is often overlooked in these discussions. While it improves battery safety and stability, manganese supplies are primarily sourced from South Africa, Gabon, and Australia. Though projections show a smaller mismatch between supply and demand compared to lithium or nickel, the market could still face pressure if new production doesn’t come online soon. A shortfall of even under 10% could lead to increased costs and delays in battery manufacturing.

Stakeholders Focus on Diversifying Battery Technologies

In response to raw material constraints, major companies are swiftly pivoting to alternative battery technologies:

• CATL: The world’s largest battery manufacturer, based in China, has launched its first-generation sodium-ion battery. Sodium, unlike lithium, is widely available and evenly distributed across the globe. CATL plans large-scale production by the mid-2020s, with integration into EVs and energy storage systems.
• Alsym Energy: A U.S.-based startup is developing low-cost, cobalt-free battery chemistries for emerging markets and stationary applications, aiming to address environmental and ethical concerns associated with traditional lithium-ion batteries.
• Northvolt: This Swedish company is building the world’s greenest battery and focus on recycling and sustainable alternatives, and reducing dependence on virgin materials. They have secured multiple contracts with major automakers such as Volkswagen and BMW.
• Indian Government and Companies: India has launched the Production Linked Incentive (PLI) scheme to support Advanced Chemistry Cell (ACC) battery storage. Indian firms such as Reliance Industries and Ola Electric are exploring sodium-ion and solid-state batteries for future growth.

Alternatives on the Rise: Sodium, Zinc, Solid-State, and Silicon-Carbon Anode Batteries

Sodium-ion batteries are gaining attention as an alternative to lithium-ion technologies. While they currently lag in terms of energy density, their advantages in cost-effectiveness, safety, and abundant raw material availability make them ideal for grid-scale storage and short-range EVs. Sodium’s global availability, unlike the geopolitically concentrated lithium and cobalt, makes it highly scalable for applications where energy density can be traded off for affordability and reliability.

Zinc-based batteries, particularly zinc-air and zinc-ion chemistries are emerging as powerful choices for long-duration energy storage. Companies such as Zinc8 Energy Solutions are piloting zinc-air battery systems to replace diesel generators and provide backup for renewable energy sources. Although not yet ideal for EVs due to lower energy density and heavier systems, zinc technologies promise for stationary energy storage, especially in remote and developing regions.

Solid-state batteries, which replace liquid electrolytes with solid materials, promise higher energy densities, faster charging, and improved safety. Toyota is investing heavily in this technology, with plans to debut vehicles powered by solid-state batteries within the next few years. Despite challenges such as high production costs and manufacturing complexities, ongoing advancements are moving solid-state batteries closer to commercial viability.

Silicon-carbon anode batteries offers exciting developments. By replacing traditional graphite with silicon-based composites, these batteries offer much higher energy density. Pure silicon anodes face challenges with expansion during charge cycles, but silicon-carbon blends address this issue, improving performance and cycle life. Companies such as Sila Nanotechnologies are already working with consumer electronics brands and automakers to integrate silicon-anode batteries into next-gen EVs, promising longer driving ranges, faster charging, and reduced weight.

Toward a Decentralized and Resilient Battery Future

As the global supply risks intensify, countries and industries are rethinking their battery strategies. In the U.S., the Inflation Reduction Act has spurred investments in domestic battery production and lithium processing. Europe’s European Battery Alliance aims to localize the battery value chain and support innovation in alternative chemistries to reduce reliance on imports. Even China, the global leader in battery manufacturing, is diversifying into sodium-ion and cobalt-free technologies.

Though lithium-ion NCM batteries will continue to dominate high-performance EVs in the short term, resource constraints and ethical concerns are pushing the industry toward diversification. Battery makers and governments are embracing a mix of chemistries-from sodium and zinc to solid-state and silicon-carbon anodes. The future of energy storage is becoming more decentralized, with no single technology monopolizing the market. A diverse mix of solutions will drive a more sustainable, secure, and adaptable global energy infrastructure.