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U.S. manufacturers are racing to get into the game while they still can.
In the weird, wide world of energy storage, lithium-ion batteries may appear to be an unshakeably dominant technology. Costs have declined about 97% over the past three decades, grid-scale battery storage is forecast to grow faster than wind or solar in the U.S. in the coming decade, and the global lithium-ion supply chain is far outpacing demand, according to BloombergNEF.
That supply chain, however, is dominated by Chinese manufacturing. According to the International Energy Agency, China controls well over half the world’s lithium processing, nearly 85% of global battery cell production capacity, and the lion’s share of actual lithium-ion battery production. Any country creating products using lithium-ion batteries, including the U.S., is at this point dependent on Chinese imports.
This has, understandably, sent U.S. manufactures searching for alternatives, and lately they have struck on one that has the industry all excited: sodium-ion batteries. As global interest ramps up, domestic manufacturers have at least a prayer of building out their own sodium-ion supply chains before China completely takes over. Research and consulting firm Benchmark Mineral Intelligence expects to see a 350% jump in announced sodium-ion battery manufacturing capacity this year alone. And while the supply of these batteries is only in the tens of gigawatts today, Benchmark forecasts that it will be in the hundreds of gigawatts by 2030.
Sodium-ion technology itself isn’t particularly disruptive — it’s not new, nor does it serve a new market, exactly. It performs roughly the same as lithium-ion in energy storage systems, providing around four hours of power for either grid-scale or residential applications. But sodium-ion chemistries have a handful of key advantages — perhaps most critically that sodium is significantly more abundant in the U.S. than lithium, and is thus far cheaper. China has unsurprisingly taken an early lead in the sodium-ion market anyway, reportedly opening its first sodium-ion battery storage station in May. But because the industry is still so nascent, domestic manufacturers say there’s still time for them to get in the game.
“We’re focused on catching up to China in lithium-ion batteries, where in our view, we should be leapfrogging to what’s next,” Cam Dales, co-founder and chief commercial officer at Peak Energy, a Bay Area-based sodium-ion battery storage startup, told me. “There’s no CATL of the United States. That’s ultimately our ambition, is to become that.”
As political tensions between China and the U.S. mount, relying on a Chinese-dominated battery supply chain is geopolitically risky. Last month, the Biden administration announced a steep increase in tariffs on a wide array of Chinese imports, including a 25% tariff on lithium-ion non-electric vehicle batteries starting in 2026, and another 25% tariff on battery parts and certain critical minerals starting this year.
Because sodium is so plentiful and cheap, companies in the space estimate that sodium-ion storage systems could eventually be around 40% less expensive than lithium-ion systems, once manufacturing scales. This lower price point could eventually make sodium-ion economically viable for storage applications “up to eight, 10, maybe even 12 hours,” Dales told me.
Sodium-ion also has a leg up on lithium-ion when it comes to safety. While this is an ongoing area of research, so far sodium-ion batteries appear less likely to catch fire, at least in part because of their lower energy density and the fact that their electrolytes generally have a higher flashpoint, the temperature at which the liquid is capable of igniting. This could make them safer to install indoors or pack close together. It’s also possible to discharge sodium-ion batteries down to zero volts, completely eliminating the possibility of battery fires during transit, whereas lithium-ion can’t be completely discharged without ruining the battery. Finally, sodium-ion performs better in the cold than lithium-ion batteries, which notoriously struggle to charge and discharge as efficiently at low temperatures.
“When we saw announcements coming out of China about very large investments in large capacity sodium projects, that was really an eye opener for us,” Dales told me. He and co-founder Landon Mossburg launched Peak Energy last year with $10 million in funding. The company is currently importing sodium-ion cells and assembling battery packs domestically, but by 2027, Dales said he hopes to produce both cells and packs in the U.S., with an eye toward opening a gigafactory and onshoring the entirety of the supply chain.
He’s not alone in this ambition. Natron Energy, another Silicon Valley-based sodium-ion company, has been at this for more than a decade. The startup, founded in 2012, recently opened the first commercial-scale sodium-ion battery manufacturing facility in the U.S. When fully ramped, the plant will have the capacity to produce 600 megawatts of batteries annually, paving the way for future gigawatt-scale facilities.
It cost Natron over $40 million to upgrade the Michigan-based plant, which formerly produced lithium-ion batteries, into a sodium-ion facility, and while the first shipments were expected to begin in June, none have yet been announced. The company’s backers include Khosla Ventures as well as strategic investors such as Chevron, which is interested in using this tech at EV charging stations; United Airlines, which hopes to use it for charging motorized ground equipment; and Nabor Industries, one of the world’s largest oil and gas drilling companies, which is interested in using sodium-ion batteries to power drilling rigs. It also received nearly $20 million from ARPA-E to fund the conversion of the Michigan facility.
Beyond the U.S. and China, France-based sodium-ion cell developer Tiamat is planning to build out a massive 5-gigawatt facility, while Sweden-based Northvolt and UK-based Faradion are also hoping to bring sodium-ion battery manufacturing to the European market.
Sodium-ion isn’t a magic bullet technology, though, and it certainly won’t make sense for all applications. The main reason there hasn’t been much interest up until now is because these batteries are about 30% less energy-dense than their lithium-ion counterparts. That likely doesn’t matter too much for grid-scale or even residential storage systems, where there’s usually enough open land, garage, or exterior wall space to install a sufficiently-sized system. But it is the reason why sodium-ion wasn’t commercialized sooner, as lithium-ion’s space efficiency is better suited to the portable electronics and electric vehicle markets.
“It’s only in the last two years probably, that the stationary storage market has gotten big enough where it alone can drive specific chemistries and the investment required to scale them,” Dales told me.
Catherine Peake, an analyst at Benchmark Mineral Intelligence, also told me that lithium iron phosphate batteries — the specific flavor of lithium-ion that’s generally favored for energy storage systems — usually have a longer cycle life than sodium-ion batteries, meaning they can charge and discharge more times before performance degrades. “That cycle life is actually a pretty key metric for [energy storage system] applications,” she said, though she acknowledged that Natron is an outlier in this regard, as the company claims to have a longer cycle life than standard lithium-ion batteries.
Lithium is also a volatile market. Though prices have bottomed out recently, less than two years ago the world was facing the opposite scenario, as China saw the price for battery-grade lithium carbonate hit an all-time high, Kevin Shang, a senior research analyst at the energy consultancy WoodMackenzie, told me. “So this catalyzed a soaring interest in sodium-ion batteries,” he said.
Although Shang and Peake agree that the U.S. could seize this moment to build a domestic sodium-ion supply chain, both also said that scaling production up to the level of China or other battery giants like South Korea or Japan is a longshot. “After all, they have been doing this battery-related business for over 10 years. They have more experience in scaling up these materials, in scaling up these technologies,” Shang told me.
These countries are home to the world’s largest battery manufacturers, with CATL and BYD in China and LG Energy in South Korea. But Natron and Peak Energy are both startups, lacking the billions that would allow for massive scale-up, at least in the short term.
“It shouldn't be underestimated how hard it is to make anything in large volume,” Matt Stock, a product director at Benchmark, told me.Largely due to the maturity of lithium-ion battery supply chains, the research firm doesn’t see sodium-ion becoming the dominant energy storage tech anytime soon. Rather, by 2030, Benchmark forecasts that sodium-ion batteries will comprise 5% of the battery energy storage market, increasing to over 10% by 2040. BloombergNEF is somewhat more optimistic, predicting sodium-ion will make up 12% of the stationary energy storage market by 2030.
And while storage may be the most obvious near-term use case for sodium-ion batteries, it’s certainly not the only industry that stands to benefit. China is experimenting with using these batteries in two- and three-wheeled vehicles such as electric scooters, bikes, and motorcycles. And as the tech improves, Stock said it’s possible that sodium-ion batteries could become a viable option for longer-range EVs as well.
Ultimately, Dales thinks these batteries will follow a similar technological trajectory to lithium iron phosphate, a chemistry that many in the west thought would never be suitable for use in electric vehicle batteries. “Over time, our view is that sodium-ion will continue to increase its energy density just like [lithium iron phosphate] did,” Dales told me. Now, lithium iron phosphate is the dominant battery chemistry for Chinese-made EVs. “But what actually happened was it was so cheap and they made it better and better and better than now it’s taking over the world. We see this playing out again with sodium-ion.”
Benchmark, on the other hand, is more circumspect regarding sodium-ion’s world dominating potential. Stock said he sees the technology more as a supplement to lithium-ion, which can swoop in when lithium prices boom or critical minerals shortages hit. “When that happens, something like sodium-ion can fill the space. And that’s really where it’s a complementary technology rather than a replacement,” he told me. “If there were other technologies as mature as sodium-ion, we’d also see those being scaled alongside it, but sodium-ion is kind of next in line.”
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SpaceX has also now been dragged into the fight.
The value of Tesla shares went into freefall Thursday as its chief executive Elon Musk and traded insults with President Donald Trump. The war of tweets (and Truths) began with Musk’s criticism of the budget reconciliation bill passed by the House of Representatives and has escalated to Musk accusing Trump of being “in the Epstein files,” a reference to the well-connected financier Jeffrey Epstein, who died in federal detention in 2019 while awaiting trial on sex trafficking charges.
The conflict had been escalating steadily in the week since Musk formally departed the Trump administration with what was essentially a goodbye party in the Oval Office, during which Musk was given a “key” to the White House.
Musk has since criticized the reconciliation bill for not cutting spending enough, and for slashing credits for electric vehicles and renewable energy while not touching subsidies for oil and gas. “Keep the EV/solar incentive cuts in the bill, even though no oil & gas subsidies are touched (very unfair!!), but ditch the MOUNTAIN of DISGUSTING PORK in the bill,” Musk wrote on X Thursday afternoon. He later posted a poll asking “Is it time to create a new political party in America that actually represents the 80% in the middle?”
Tesla shares were down around 5% early in the day but recovered somewhat by noon, only to nosedive again when Trump criticized Musk during a media availability. The shares had fallen a total of 14% from the previous day’s close by the end of trading on Thursday, evaporating some $150 billion worth of Tesla’s market capitalization.
As Musk has criticized Trump’s bill, Trump and his allies have accused him of being sore over the removal of tax credits for the purchase of electric vehicles. On Tuesday, Speaker of the House Mike Johnson described Musk’s criticism of the bill as “very disappointing,” and said the electric vehicle policies were “very important to him.”
“I know that has an effect on his business, and I lament that,” Johnson said.
Trump echoed that criticism Thursday afternoon on Truth Social, writing, “Elon was ‘wearing thin,’ I asked him to leave, I took away his EV Mandate that forced everyone to buy Electric Cars that nobody else wanted (that he knew for months I was going to do!), and he just went CRAZY!” He added, “The easiest way to save money in our Budget, Billions and Billions of Dollars, is to terminate Elon’s Governmental Subsidies and Contracts. I was always surprised that Biden didn’t do it!”
“In light of the President’s statement about cancellation of my government contracts, @SpaceX will begin decommissioning its Dragon spacecraft immediately,” Musk replied, referring to the vehicles NASA uses to ferry personnel and supplies to and from the International Space Station.
“You can’t just divest from the eco-right after the election,” contends Johannes Ackva of Founder Pledge.
Johannes Ackva likes a contrarian bet. Back in 2020, when he launched the climate program at Founders Pledge, a nonprofit that connects entrepreneurs to philanthropic causes, he sought out “surgical interventions” to support technologies that didn’t already enjoy the widespread popularity of wind turbines and solar panels, such as advanced nuclear reactors and direct air carbon capture.
By late 2023, however, the Biden administration’s legislative sweep was directing billions to the very range of technologies Ackva previously saw as neglected. So he turned his attention to shoring up those political wins.
The modern climate movement came into its own demanding that the world stop shrinking from inconvenient truths. But as polls increasingly showed the 2024 election trending toward Republicans, Ackva saw few funders propping up advocates with any influence over the GOP. Founders Pledge pumped millions into Deploy/US, a climate group where former Republican Representative Carlos Curbelo of Florida served as the top adviser, which then distributed the money to upward of 30 right-leaning climate groups, including the American Conservation Coalition and the Evangelical Environmental Network.
The bipartisan gamble paid off. In April 2024, Founders Pledge received an anonymous $40 million donation to bolster its efforts. Now an anonymous donor has granted Founders Pledge’s climate fund another $50 million, Heatmap has learned.
Founders Pledge declined to say whether the money came from the same unnamed source or separate donors. But the influx of funding has “radically transformed our ability to make large grants,” Ackva told me, noting that the budget before 2024 came out to about $10 million per year.
“The word exponential is overused,” he said. “But that’s roughly the trajectory.”
Amid the so-called green freeze that followed the Trump administration’s rollback of climate funding, Founders Pledge has joined other climate philanthropies in stepping in to back projects that have lost money. When Breakthrough Energy shuttered its climate program in March, Founders Pledge gave $3.5 million to serve as the primary funding for the launch of the Innovation Initiative, started by former staff from the Bill Gates-backed nonprofit.
Ackva said his organization is looking to invest in climate efforts across the political spectrum. But Founders Pledge’s focus on right-of-center groups wasn’t an election-year gimmick.
“You can’t just divest from the eco-right after the election,” he said. “That’s not an authentic way to build a civil society ecosystem.”
As Republicans in Congress proceed with their gutting of green funding, including through Trump’s One Big, Beautiful Bill Act, Ackva said it’s too soon to say whether the political strategy is paying off.
“If you think of grantmaking as making bets, some bets exceed others sooner, but that doesn’t make them bad bets,” Ackva told me. “Ultimately, philanthropy cannot define how a given policy goes. You can adjust the probabilities, maybe level the bets. But obviously it’s larger forces at play that shape how the One Big, Beautiful Bill gets made.”
The Senate may save or even expand parts of the IRA that support baseload power, e.g. nuclear and geothermal. But regardless, Ackva said, climate advocates are making a mistake training their focus so intently on the fate of this one law.
“It’s kind of the only thing that’s being discussed,” he said.
Meanwhile the Infrastructure Investment and Jobs Act, better known as the Bipartisan Infrastructure Law, is set for reauthorization next fall. The Energy Act of 2020 is slated for renewal this year. And funding for the Department of Energy is up for debate as the White House now pushes to expand the Loan Programs Office’s lending authority for nuclear projects by $750 million.
“Those are things we would see as at least as important as the Inflation Reduction Act,” Ackva said.
Given those deadlines, Ackva said he expected other donors to press advocates for plans last year on how to sway Republicans toward more ambitious bills this Congress. But after former Vice President Kamala Harris took over the Democratic ticket last year, he said he’d heard from his grantees “that they were asked what they were going to do with a Harris trifecta.”
“Everyone was betting on Harris to win,” he said. “There’s a very strong ideological lean among climate funders to a degree that was frankly a little bit shocking.”
The partisan divide over climate wasn’t always so pronounced. In 2008, the Republican presidential nominee, John McCain, ran on a more ambitious decarbonization platform than what President Barack Obama proposed in the White House.
There are dueling — though not mutually exclusive — narratives about how the American climate movement over-indexed on one side of the political spectrum. Both stories start in 2010.
The version liberals and leftists will find familiar is one that blames fossil fuel megadonors such as Charles and David Koch for aggressively promoting climate denial among Republican lawmakers.
The version told by Ted Nordhaus, the founder of the Breakthrough Institute think tank where Ackva got his start years before joining Founders Pledge, starts with the failure of the Obama-era cap-and-trade bill to pass through Congress.
When the legislation “went up in flames in 2010,” Nordhaus told me, a bunch of environmental philanthropies hired Harvard professor Theda Skocpol to author a 145-page report on what triggered the blaze.
“The report concluded that the problem is we were too focused on the technocratic, inside-the-Beltway stuff,” Nordhaus summarized. “We needed to build political power so the next time there’s an opportunity to do big climate policy, we would have the political power to put a price on carbon.”
Out of that finding came what Nordhaus called the “two-pronged, boots-on-the-ground” era of the movement, which backed college campus campaigns to divest from fossil fuels and also efforts to prevent new fossil fuel infrastructure such as the Keystone XL pipeline.
Reasonable people could debate the fiduciary merits of scrapping investments in natural gas companies or the value of blocking oil infrastructure whose cancellation spurred more shipments of crude on rail lines that face higher risk of a spill or explosion than pipelines. But once supporting fossil fuel divestment or opposing pipelines became the key litmus tests activists used to determine if a Democrat running for office took climate change seriously, the issue became more ideological.
“That made it impossible for any Democrat to become a moderate on climate, and made it impossible for any Republican to be a moderate on climate,” Nordhaus said. “The Republican Party has its own craziness and radicalism, but a bunch of that is negative polarization.”
To fund an effective “climate right,” Nordhaus said, Founders Pledge should seek out groups that don’t explicitly focus on the climate or environment at all.
“I’d be looking at which groups are all-in on U.S. natural gas, which has been the biggest driver of decarbonization in the U.S. over the last 15 years; which groups are all in and really doing work on nuclear; and which groups are doing work on permitting reform,” Nordhaus said. “That’s how you’re going to make progress with Republicans.”
I asked Ackva where the line would be for funding an eco right. Would Founders Pledge back groups that — like some green-leaning elements of Italian Prime Minister Giorgia Meloni’s party or allies of France’s Marine Le Pen — support draconian restrictions on immigration in the name of reducing national emissions from the increased population?
“That would not be appropriate,” Ackva told me. “When we say we’re funding the eco right, like when we’re funding groups on the left or in the center, the things they are proposing don’t need to be exactly the things we will be prioritizing, but they need to be plausible, high-impact solutions.”
To Emmet Penney, a senior fellow focused on energy at the right-leaning Foundation for American Innovation, it’s an obvious play. The green left that has long dominated climate policy debates “is premised on aggressive permitting and environmental law that makes it impossible to actually build anything useful toward addressing the things they’re most afraid of.”
“It’s become clear to anyone who wants to build anything that what the environmental left has to offer simply doesn't work,” he told me. “Naturally, more centrist organizations who might not even otherwise be slated as right-wing now look that way and are becoming increasingly attractive to people who are interested in building.”
On Senate committees, a public lands selloff, and energy investment
Current conditions: Southern New England will experience its hottest day of the year so far today, with temperatures around 90 degrees Fahrenheit • Record levels of Sargassum seaweed are overwhelming Caribbean resorts • Saharan dust has spread across most of Florida and will continue over the coastal Southeast through this weekend.
1. The Senate’s first pass at IRA repeal cuts huge climate programs ...
On Wednesday evening, Republicans on the Senate’s Environment and Public Works Committee released their section of President Trump’s “One Big, Beautiful” budget reconciliation bill. “At least so far, it’s hardly deviating from the stark cuts to the Inflation Reduction Act that have already passed the House,” my colleague Emily Pontecorvo wrote in her analysis of the contents — although there is one Environmental Protection Agency grant program, for reducing pollution at ports, that had been targeted in by the House bill and is absent from the Environment and Public Works Committee’s text. As in the House bill, the latest text eliminates the $27 billion Greenhouse Gas Reduction Fund, which the Trump administration has sought to kill with accusations of fraud, though it has yet to produce any evidence of impropriety.
Elsewhere in the Senate, however, some Republicans appear more friendly toward preserving at least some IRA tax credits. “I would be in the camp that doesn’t think we need [to do] a full repeal and instead can live with a circumscribed, narrower version of the existing IRA credits,” Senator Todd Young of Indiana, a member of the Finance Committee, said, as reported by Axios. Senator John Curtis of Utah published an op-ed in Deseret News on Wednesday in which he argued that “the right policy solution must navigate tax credits and regulatory reform in what I believe is central to America’s economic future, the planet and our national security: energy.”
2. … and a public lands sell-off is back on the table
Senate Republicans are reviving a plan to sell off public lands to fund President Trump’s tax cuts after their colleagues in the House thwarted a similar proposal, Senator Mike Lee of Utah told reporters on Wednesday. According to the senator, a new version of the plan will be included in the Committee on Energy and Natural Resources’s pass at the bill, which will likely be made public on Monday, Bloomberg reports.
Representative Ryan Zinke of Montana helped lead the charge to kill the earlier version of the proposal in the House, although Lee added that his version would exempt Montana. Still — as I’ve reported — the plan would jeopardize as much as 500,000 acres of public land across Utah and Nevada alone. “These are the places people recreate with their families, they are places to hunt and fish, and they are held in trust for the American people to enjoy for generations to come,” Travis Hammill, the D.C. director for the Southern Utah Wilderness Alliance, said in a statement.
3. 2025 will be a banner year for energy investment, despite economic turbulence: IEA
Despite tariffs, trade wars, and economic uncertainty, the International Energy Agency anticipates a record $3.3 trillion investment in global energy in 2025, per a new report released Thursday. That represents a 2% rise from 2024. “The fast-evolving economic and trade picture means that some investors are adopting a wait-and-see approach to new energy project approvals, but in most areas we have yet to see significant implications for existing projects,” IEA Executive Director Fatih Birol said in a statement about the findings.
Around $2.2 trillion of the total global investment is “going collectively to renewables, nuclear, grids, storage, low-emissions fuels, efficiency, and electrification, twice as much as the $1.1 trillion going to oil, natural gas, and coal,” the report says. Solar specifically is booming, with a forecast of $450 billion in investment by 2025. The overall picture represents an enormous reversal from a decade ago, when fossil fuel investments were 30% higher than electricity generation, grids, and storage. That said, the research also found that investment in grids — at around $400 billion per year — is “failing to keep pace with spending on generation and electrification,” mainly because of “lengthy permitting procedures and tight supply chains for transformers and cables.” Read the full report here.
4. UK solar is having a record year due to unusually sunny spring
Carbon BriefSolar farms in the United Kingdom generated more electricity than ever before in the first five months of the year, according to a newly released accounting by Carbon Brief. The surge in solar energy was 42% higher than over the same period last year, growing from 5.4 terawatt-hours of electricity generated to a record 7.6 terawatt-hours. Carbon Brief credited the record output to the nation’s sunniest spring on record, although the publication notes it was also “aided by rising capacity, which reached 20.2GW in 2024, up by 2.3GW from 17.9GW a year earlier.” You can read the full report here.
5. ‘Atmospheric thirst’ is making droughts more severe: study
While extreme heat almost always has a climate change signal, the same cannot be said for droughts, which have different causes and feedback mechanisms that researchers are still working to understand. A new study published Wednesday in Nature has found that atmospheric evaporative demand — that is, the complex process of water evaporation into the atmosphere, also called “atmospheric thirst” — has increased drought severity by an average of 40%. Over the five years from 2018 to 2022, areas in drought have expanded 74% on average compared to the 1981 to 2017 period, with atmospheric evaporative demand “contributing to 58% of this increase,” the report further found. “We were very much shocked when we saw the results,” Solomon Gebrechorkos, a hydroclimatologist at the University of Oxford and lead author of the study, told The New York Times.
“A large majority of new residential houses and buildings in Germany feature a heat pump as their main heating system,” according to government numbers reported by Clean Energy Wire. “The climate-friendly heating technology was installed in more than two-thirds (69.4%) of the 76,100 homes finished in 2024, a 5% increase compared to 2023.”