Natron’s liquidation shows why the US isn’t ready to make its own batteries

The liquidation of US sodium-ion battery startup Natron, following other Western failures, exemplifies the significant hurdles the United States faces in establishing a domestic battery manufacturing industry, highlighting issues with capital, regulatory certifications, and intense global market competition. This event underscores the need for sustained, long-term industrial policies to foster a resilient battery supply chain outside of Asia.

QUICK TAKEAWAYS

• Natron, a sodium-ion battery startup with a planned $1.4 billion factory, ceased operations due to a cash crunch and inability to secure UL certification in a timely manner.
• Its failure illustrates the profound challenges in establishing large-scale battery manufacturing in the U.S. and Europe, despite substantial investment.
• A 90% drop in lithium prices over 2.5 years undercut the economic viability of alternative sodium-ion technologies.
• Other major Western battery manufacturers, like Powin (U.S.) and Northvolt (Sweden), have also recently faced bankruptcy.
• Sustained government support over a decade or more is crucial for domestic battery manufacturing to compete with Asia's established supply chains.

KEY POINTS

• Natron’s 12-year quest ended in liquidation after investors withdrew funds due to delays in obtaining essential UL certification for its Michigan factory, despite $25 million in existing orders.
• The company had previously announced plans for a $1.4 billion sodium-ion battery factory in North Carolina, projected to create 1,000 jobs and produce gigawatt-hours of cells annually.
• The dramatic 90% decline in lithium carbonate prices has made lithium-ion batteries significantly more competitive, diminishing the cost advantage of sodium-ion alternatives.
• The U.S. and Europe face considerable difficulty in building domestic battery manufacturing capabilities, struggling against Asia's mature supply chains and specialized expertise.
• Successful domestic battery initiatives likely require consistent, long-term industrial policies, potentially involving joint ventures with established Asian companies like Panasonic, LG Energy Solution, and SK Innovation.

PRACTICAL INSIGHTS

• Startups in critical manufacturing sectors must account for lengthy regulatory approval processes (e.g., UL certification), which can significantly impact funding and operational timelines.
• Volatility in global commodity markets (like lithium) demands agile business models or diversified technology strategies for battery manufacturers.
• Developing new industrial capabilities, such as battery gigafactories, requires patient capital and a strategic horizon extending beyond typical investor cycles, often over a decade.
• Government intervention with consistent, long-term policy and financial support is a critical enabler for overcoming initial hurdles and achieving scale in complex manufacturing.

PRACTICAL APPLICATION

This information highlights the strategic importance of robust industrial policy and diversified investment approaches for any nation aiming to secure critical manufacturing capabilities. For investors, it underscores the inherent risks and long timelines associated with deep-tech manufacturing, emphasizing due diligence on regulatory pathways and market competition. For policymakers, it demonstrates the necessity of sustained, multi-decade government support and strategic partnerships to foster domestic industries and reduce reliance on foreign supply chains in critical sectors like battery technology.