Analysis Renewable Energy Startup touts alternative EV batteries for Saudi industry By Andrew Hammond November 1, 2023 AdrianN/Unsplash Manufactures are seeking alternatives to lithium batteries and Ford is soon to offer an LFP battery option Founder says non-lithium battery better for Gulf Alternatives can be produced more cheaply Flammability risk for lithium-powered vehicles A startup developing non-lithium batteries for electric vehicles (EVs) says they are better suited to Gulf climates where flammability is a risk. But industry experts say it will be difficult to penetrate the car industry where lithium options are baked into budgets. Mukesh Chatter, founder of Alsym Energy, argued his case to regional political and business leaders at the Future Investment Initiative (FII) forum in Saudi Arabia last week, where renewable energy and industry were major topics of discussion. Rare metals such as lithium have become the subject of geopolitical competition as major firms including EV manufacturer Tesla and mobile phone maker Apple seek to ensure access from the leading producers Australia, Chile, China and Argentina. “Lithium batteries give the best performance to date but there is a flammability and toxicity risk – plus they are expensive,” Chatter said at the forum. He argued for manganese oxide-based alternatives that can be produced at lower cost. Saudi hunts for critical minerals in energy transition Saudi company invests in US battery maker Pure Lithium Work to begin in 2024 on Hyundai’s $500m Saudi car plant Saudi Arabia has leaned towards lithium options so far in its drive to become a major green industry manufacturer as part of its plan to diversify away from oil. The government intends to buy up to 100,000 EVs over 10 years from a Saudi-based factory for the US firm Lucid in which Saudi Arabia’s Public Investment Fund is the major shareholder. Saudi mining giant Ma’aden and US-based Ivanhoe Electric said this year they will start exploring for lithium and other rare metals inside the kingdom. And Saudi investment company Energy Capital Group said in September it was backing a US tech startup called Pure Lithium to develop batteries using lithium extracted from oilfield brines. Flammability is insurance issue However, flammability has become an insurance issue, not just for EV drivers but for shipping and other industries that use lithium-based batteries, creating an opening for alternative makers to promote their technology in hot countries. During 2022, 209 ship fires were reported, the highest number in a decade, according to insurer Allianz Global Corporate & Specialty. Of that total, 13 occurred on car carriers, though it was not clear how many involved EVs. EV and hybrid sales accounted for just over 14 percent of global light vehicle sales in the first half of 2023, up from 11 percent the year before, led by sales in Europe, North America and China, according to EV-Volumes.com. Lithium ferro-phosphate, or LFP, batteries have emerged as an alternative favoured by some car manufacturers after statements of interest from Tesla, Toyota and Hyundai. Competition is rising, with most LFP materials and components coming from China. The Far East country’s Zhejiang Huayou Cobalt and South Korea’s LG Chem said in September that they will build LFP factories in Morocco and Indonesia. Ford has said it will make them in the US. Market ‘ripe for disruption’ Andy Leyland, managing director of Supply Chain Insights, said international investment in lithium batteries is too large to displace them in EVs, but energy storage was “ripe for disruption”. “For now lithium-ion batteries are outspending rival technologies by many, many, multiples. They are ingrained in every major auto-maker’s plans for the next decade, and over a trillion dollars has already been committed,” he said. But Chatter’s message to Gulf business leaders is that cheaper rivals could be attractive to emerging economies such as Saudi Arabia where choices are still not fixed and climate makes flammability an issue. “Expensive, fire-prone battery technologies are serious impediments to ambitious plans for rapid growth,” he said, adding that Alsym is finalising a deal with a global utilities firm which he did not name. “Instead of giving all incentives to help diversify industry here, if you have a low-cost option industry will come by themselves,” he said.