Has sodium-ion reached the “lithium iron phosphate moment”?

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Author | Zhou Zhiyu

Four years ago, lithium carbonate prices soared, and “the first year of sodium-ion batteries” was a rallying cry throughout the industry. Afterwards, lithium prices fell and the heat faded. Now, with lithium carbonate returning to high levels, sodium-ion batteries are back again—but this time, the story is different.

Wallstreet News recently learned from industry insiders that the cost gap between large sodium-ion battery cells and lithium iron phosphate has narrowed to about 0.1 yuan/Wh, and is expected to be matched by the end of the year; as for cathode material costs, they can already be benchmarked against the lithium iron phosphate level when lithium carbonate was 150,000 yuan/ton, and it’s expected to go lower next year.

Moreover, unlike four years ago, the industry chain is no longer tangled in concepts or roadmaps—the focus is on laying out mass production timelines. CATL personnel revealed that the first batch of sodium-ion energy storage systems will be delivered this year, with GWh-level shipments for the whole year.

One industry insider used an analogy: sodium-ion batteries are experiencing their own “lithium iron phosphate moment.” The current situation for sodium-ion batteries is somewhat similar to the eve when lithium iron phosphate turned the tables back then.

But behind that “somewhat similar,” the story may not be the same. Lithium iron phosphate won back then by grabbing an existing market from ternary batteries, but the situation in front of sodium-ion batteries is much more complicated.

From Hedging to Betting

The so-called “lithium iron phosphate moment” refers to the current industrial node that sodium-ion batteries are at, which has certain similarities to the rise of lithium iron phosphate in 2020.

Before 2020, lithium iron phosphate was suppressed by ternary batteries; its energy density wasn’t high enough, and its range wasn’t long enough, so it wasn’t mainstream. But starting in 2020, lithium iron phosphate’s safety narrative was reshaped, CTP integration raised system energy density, Tesla’s full switch to lithium iron phosphate gave a demand signal, and rising lithium carbonate prices magnified the cost advantages.

Within less than two years, the market share of lithium iron phosphate installs jumped from under 40% to over 60%. The turning point was the result of converging multiple conditions.

Sodium-ion batteries are experiencing a similar convergence.

The slogan “first year of sodium-ion batteries” has been said in the industry for many years, most recently in 2022. That year, lithium carbonate surged to 600,000 yuan/ton, and everyone thought the window for sodium-ion batteries had arrived. But the approach at the time was uniform: simply modify lithium battery production lines, make sodium-ion batteries first and talk later. That choice was rational then: small investment, quick switch, and if sodium-ion batteries didn’t work out, exit at any time with limited loss. Essentially, the sodium-ion battery craze of 2022 was a hedge.

Now, the situation is completely different.

At the “Sodium-ion Battery Energy Storage Industry Technology and Application Research Exchange Activity” hosted by the MIIT News Propaganda Center recently, CATL Domestic Energy Storage Solutions CTO Lin Jiubiao told Wallstreet News that sodium-ion batteries have entered a fully productized era.

CATL has built a dedicated sodium-ion battery mass production line in Fuding, Fujian, with the first batch of energy storage systems to be delivered to customers in September, targeting annual GWh-level shipments.

Ronbay Technology takes the route of validating first, then scaling. The general manager of Ronbay Technology’s sodium-ion battery division, Wang Zunzhi, bluntly said: “Lithium iron phosphate lines can be used, but there are huge problems—production efficiency is very low, and processing costs can’t be brought down.” Ronbay’s 6,000-ton pilot line in Xiantao, Hubei, was built to solve this problem—specifically to verify what equipment is needed. After validation, a 300,000-ton dedicated line is expected to be completed in 2027.

Wanhua Chemical also made a decision to directly abandon the coconut shell hard carbon route. Globally available coconut shell material is only enough to support 50–60 GWh of sodium-ion battery demand—not enough for scaling up—so Wanhua switched to coal-based and resin-based engineered hard carbon.

Four years ago, everyone tried with modified lines, losses were controllable, and they could exit at any time. The current actions show these companies think sodium-ion batteries are not a cyclical opportunity but a structural direction.

Moreover, this bet pays off. Wang Zunzhi revealed that the processing cost of specialized integrated sodium-ion battery production lines can be 30%–50% lower than current lithium iron phosphate lines.

In other words, after the dedicated lines are built, manufacturing costs will be even lower than lithium iron phosphate.

Cost data is being verified on multiple levels. Wang Zunzhi revealed that the current mass-produced cathode material costs are already benchmarked to lithium iron phosphate when lithium carbonate is at 150,000 yuan/ton, and next year will go down to the level of lithium carbonate below 60,000.

Anode cost reduction is even sharper: hard carbon price is dropping from 60,000–70,000 yuan/ton in 2024 to an estimated 35,000–40,000 yuan/ton this year, with a long-term goal below 25,000. At the cell level, according to Zhou Bo, Director of China Chemical and Physical Power Industry Association Power Battery Application Branch Research Center, the cost difference of large sodium-ion battery cells compared to lithium iron phosphate is only about 0.1 yuan/Wh, with the hope to match by year-end, and long-term to drop to 0.3 yuan/Wh; system costs have fallen from last year’s 1.15 yuan/Wh to around 1 yuan/Wh this year. From materials to cells to systems, costs are leveling up with lithium batteries.

The maturity of battery cells is also at the threshold for mass production and delivery. Lin Jiubiao said, the current generation of sodium-ion batteries have a cycle life of 15,000 cycles, and wide temperature performance has already exceeded the applicable boundaries of lithium-ion batteries.

Additionally, the first national standard for power energy storage sodium-ion batteries was implemented in March this year, and sodium-ion batteries have been included in the “15th Five-Year Plan” for diversified new energy storage technology routes. In April 2026, CATL and Haibosichuang signed a 3-year, 60 GWh sodium-ion battery cooperation agreement—the biggest sodium-ion battery order globally so far.

Costs approaching parity, dedicated lines launching, standards implemented, anchor orders signed. This is why industry insiders believe sodium-ion batteries are having their “lithium iron phosphate moment”—a series of drivers.

More than One Battlefield

Another key difference from four years ago is that discussions about sodium-ion batteries’ future used to center on how they could “replace” lithium-ion batteries. But from current trends, sodium-ion batteries don’t need to grab market from lithium-ion batteries—they have their own demand map.

Zhou Bo told Wallstreet News that oilfields, mining sites and other industrial venues with self-built power grids are directly deploying sodium-ion commercial and industrial energy storage; these places have extreme climates and weak grid coverage, so lithium-ion batteries can hardly meet requirements. Energy storage in high-altitude and cold areas is also opening up. In the start-stop power supply field, some companies realized 200 MWh of sodium-ion battery applications last year, and the trend to replace lead-acid is accelerating. Two-wheelers are also an emerging lead-acid replacement market.

The main target for sodium-ion batteries is replacing lead-acid and other routes, or filling gaps where lithium-ion batteries cannot perform—not slicing off lithium-ion battery share, but unlocking new demand entry points.

Within the energy storage field, scenarios are also diversifying. Lin Jiubiao, discussing long-duration energy storage, said sodium-ion batteries’ low heat generation and wide temperature range features, combined with 4–8 hour low-C-rate scenes, could eliminate liquid cooling systems for ultra-simple integration. Liquid cooling is a complete sub-system, with its own supply chain, maintenance and failure modes, and is currently one of the highest failure rate links in energy storage systems. Removing liquid cooling isn’t just about a single cost item—it reshapes the entire value chain of energy storage systems.

Wang Lei, General Manager of Haibosichuang Experimental Testing Center, gave evidence: sodium-ion batteries release 90% capacity at minus 40°C, and with 15,000 cycles, at a daily average of two charge/discharge cycles, could operate for 20 years; system conversion efficiency is 97%. These aren’t advantages over lithium iron phosphate in price, but things lithium iron phosphate simply cannot do.

As industrial capabilities approach those of lithium-ion batteries, and application scenarios diversify, sodium-ion batteries face not a zero-sum game but an expanding incremental map. Coupled with China’s 60% dependence on imported lithium ore and sodium resources accounting for 22% worldwide, the industry logic of sodium-ion batteries is not just about economics, but also about strategic supply chain security.

Plans are already underway. Ronbay Technology has a 28,000-ton capacity guaranteed for this year; a 300,000-ton dedicated line will be running in 2027; by 2030, the domestic capacity target is 1.2 million tons, and global mid-to-long term plans reach 3.5 million tons. According to Wang Zunzhi, it’s “like producing cement to produce cathode materials.” He set two prerequisites for overseas plants: overseas energy storage markets truly boom, and sodium-ion process becomes simplified enough for local production anywhere.

Haibosichuang is starting a parallel lithium-sodium line this year, with the first batch of lithium-sodium fusion energy storage station demonstration projects landing within the year. Wang Lei stated that sodium-ion battery energy storage system hardware platforms are already lithium-sodium compatible, and BMS/PCS software can be quickly deployed without major reconstruction. This means downstream integrators face much lower switching costs than expected.

Liu Yafang, adjunct professor at Zhejiang University, special chief expert of China Energy Research Society, former Deputy Director of the Energy Conservation and Technology Equipment Department of the National Energy Administration, says that looking to the “15th Five-Year Plan,” the sodium-ion battery storage industry should take advantage of policy tailwinds to accelerate R&D and industrialization, pay attention to demonstration project quality, continuously improve technical and economic performance, and actively expand applications like big bases and energy-computing synergy.

Lithium iron phosphate won by grabbing share in the same battlefield; sodium-ion batteries’ opportunity is elsewhere—in temperature zones lithium-ions can’t reach, lead-acid replacement scenarios, and places where energy storage systems need to be redesigned.

The industry chain has already scheduled to 2028. By then, it’s not just about whether the sodium-ion route works, but whether China’s new energy industry can establish another pillar beyond lithium-ion batteries.

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