Lithium batteries vs Sodium-ion batteries

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Question asked 27/01/2024

Lithium batteries vs Sodium-ion batteries

Hi James and M&M, there is an article in https://smallcaps.com.au/sodium-ion-batteries-rise-shift-away-lithium-gathers-pace/ stating that Sodium-ion batteries are on the rise. Sweden’s Northvolt has harnessed sodium brines to produce a battery that contains neither lithium nor cobalt nor graphite nor nickel. The article further states, sodium-ion batteries are seen as far more cost-effective than lithium ones due to a combination of the abundance of the raw material and lower production costs. Does M&M think this will affect the share price of Lithium mines in the short or long term considering the recent purchase of PLS?

Answer

Hi Tony,

For the last few years MM has said there would be plenty of twists in the road for the Electric Vehicles (EV) & battery revolution which will lead to tremendous volatility – this has already been very evident post COVID and the journey has arguably only just begun:

Pilbara (PLS) has both fallen over 40% on three occasions and more than doubled twice i.e. in less than 3-years!
The demand for EVs has fallen short of bullish predictions which has weighed heavily on the lithium price and related stocks.

Lithium batteries are currently the choice for EVs while nickel-iron / iron-air batteries as an alternative have received plenty of airtime in 2023. Sodium-ion batteries are undoubtedly another alternative to lithium but at the moment they have ~20% lower energy density than the current incumbent.

We wouldn’t be surprised if the battery of choice in a decades time isn’t even mentioned above but for now, we will focus on the stock/news as we see it and MM believes PLS offers excellent risk/reward ~$3.50 but we do regard this as a short term “active position”.

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Pilbara Minerals Ltd (PLS)

LAST UPDATED 26/01/2024 21:42

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