[SMM Analysis] Sodium-Ion Batteries Targeted for "Coordinated Development" as Industrialization Advances

On 28 September, the Ministry of Industry and Information Technology and six other departments jointly issued the "15th Five-Year Plan for the Development of the New-type Battery Industry". This is China's first national-level special plan for the battery sector and the first time sodium-ion batteries have been written into a top-level national design for the battery industry. SMM believes the plan's most critical characterisation of sodium-ion batteries comes in a single sentence: "Build a new-type battery product supply system with lithium batteries as the mainstay and sodium-ion batteries, flow batteries and others developing in coordination." This both affirms the dominant role of lithium batteries and formally gives sodium-ion batteries an industrial position as "a role within the system" rather than a "backup". Combined with the tax burden differential that took effect on 1 September, under which lithium batteries are subject to consumption tax while sodium-ion batteries are exempt until the end of 2028, the policy dividend window and the technology ramp-up period for sodium-ion batteries overlap for the first time. The industry will shift comprehensively from the debate over "whether to do it" to the delivery phase.

I. Sodium-ion batteries in the plan: substantive provisions across five dimensions

The plan contains 19 key tasks across five areas and five special columns. Sodium-ion battery-related content is distributed across five dimensions, all of which are substantive provisions rather than decorative additions. In terms of status, sodium-ion batteries are listed alongside lithium batteries and flow batteries as one of the three representative systems of new-type batteries. The positioning of "lithium as the mainstay with coordinated development" confirms a long-term pattern of lithium and sodium developing in parallel rather than sodium replacing lithium. The market space for sodium-ion batteries should be measured based on the logic of functional complementarity and scenario segmentation, rather than simple substitution of existing lithium battery capacity. In terms of products, Special Column 3 contains a dedicated entry for sodium-ion batteries, explicitly calling for leveraging "cost, safety and resource security advantages" to develop high-power start-stop batteries, high-safety low-temperature-resistant power batteries and long-cycle energy storage batteries. These correspond exactly to the three commercialisation-validated tracks for sodium-ion batteries: start-stop integrated systems for heavy trucks replacing lead-acid batteries, power battery installation in high-altitude cold regions, and energy storage represented by the three-year 60 GWh orders from CATL and HyperStrong. The plan effectively serves as official recognition of existing technology routes. In terms of materials, Special Column 2 lists polyanion and layered oxide cathodes together with hard carbon, anthracite and sodium metal anodes alongside lithium battery materials. "Anthracite" appears in a national-level plan text for the first time, pointing to policy endorsement for the coal-based hard carbon route. In terms of institutions, Task 14 specifically calls for advancing the development of sodium-ion battery standards, while Task 16 requires the layout of core patents for high-specific-energy sodium-ion batteries. Standards and performance grading are precisely the most scarce infrastructure for sodium-ion batteries at present. In terms of scenarios, the plan explicitly calls for expanding applications in "desert-Gobi-wasteland" and high-altitude cold regions, and for developing customised temperature control solutions for sodium-ion batteries, forming a central-local policy echo with local support policies in Inner Mongolia, Xinjiang, Shanxi and other regions.

II. Policy Package: Fiscal Tools, Top-Level Planning, and Local Pilots

Assessing the impact of the plan must be placed within the policy sequence since 2026. The first layer is the consumption tax differential already in effect: lithium batteries have been subject to a 2% tax since September 1 (rising to 4% next September), while sodium-ion batteries are exempt until the end of 2028. According to SMM calculations, at current battery cell price levels, the 2% to 4% tax differential corresponds to a cost gap of roughly 8 to 16 yuan per kWh, and the 28-month tax exemption window precisely covers the critical phase of sodium-ion batteries moving from mass production ramp-up to scale-up. The second layer is the five-year certainty provided by the plan: the planning period extends to 2030, aligning with the tax exemption window and industry cost parity expectations, giving enterprises a central government policy anchor for the first time in calculating payback periods for capacity investment. The third layer is local pilots taking the lead: Hebei's list of standalone ESS projects with diversified technology routes includes 45 lithium-sodium hybrid projects totaling 6.2 GW, accounting for 44.82% of the total list capacity, with 26 projects retained after the cleanup and rectification; Inner Mongolia led the country with 26.14 billion yuan in sodium-ion battery investment in H1; Yunnan has made clear that no new lithium battery shared energy storage projects will be built in principle. Globally, the EU has incorporated sodium-ion batteries into its core industrial strategy, South Korea has formed the K-Battery Alliance, and California in the US has begun construction of a 4 GWh sodium-ion battery plant—the release of the plan enables China to be the first to secure a national-level industrial policy position in the global sodium-ion battery race, with the first-mover advantage expected to be realized simultaneously in both standard exports and capacity going global.

III. SMM View: Projections on the Impact on Sodium-Ion Battery Industry Development

First, in terms of the time window, 2026 to 2028 represents a golden introduction period combining tax exemption benefits, planning certainty, and high lithium prices. According to SMM forecasts, global sodium-ion battery shipments will exceed 6 GWh in 2026 and reach a scale of over 15 GWh in 2027, with energy storage applications accounting for the majority.

Second, in terms of cost pace, the Renqiu project in Hebei has provided the first publicly comparable price anchor in China: the winning bid price for the sodium-ion ESS was 1.035 Yuan/Wh, approximately twice the 0.518 Yuan/Wh for the lithium iron phosphate section of the same project during the same period. SMM believes that the essence of this premium is unamortized scale rather than a technological gap. According to SMM surveys, the current manufacturing cost of sodium-ion battery cells is approximately 0.5 Yuan/Wh, and the mass production target for top-tier players is to reduce it to 0.3 to 0.4 Yuan/Wh. SMM also notes that hard carbon is the true constraint on the sodium-ion battery cost curve: 1 GWh of sodium-ion batteries requires approximately 1,500 mt of hard carbon, and the price of high-quality hard carbon suitable for long-cycle energy storage remains above 30,000 yuan. The plan's inclusion of the anthracite route essentially opens a pathway for coal-based hard carbon.

Third, in terms of demand structure, SMM believes that by the end of the 15th Five-Year Plan period, the sodium-ion battery industry will grow into a 100 GWh-scale sector with energy storage as its largest application. However, compared with the annual shipments of lithium batteries in the hundreds of GWh, sodium-ion batteries will complement rather than disrupt lithium batteries—this is precisely the market basis for the plan's positioning of "lithium as the primary technology with coordinated development." The pace of volume ramp-up will follow an application-layered approach: start-stop systems replacing lead-acid batteries will come first (the replacement market is valued in the tens of billions of yuan), followed by energy storage (provincial-level market validation is underway), and passenger vehicle power batteries last (A00-class models and extremely cold regions prioritized).

Fourth, in terms of competitive landscape, according to SMM statistics, as of July, 34 enterprises nationwide have laid out 45 sodium-ion battery cell capacity bases across 20 provinces, autonomous regions, and municipalities. After the plan is implemented, standard development and high-value patent deployment will be led by industry leaders, accelerating concentration among top-tier players. Currently, some battery cell manufacturers still need to take on lithium battery orders to sustain operations, and the capacity race will eliminate second-tier players lacking material self-sufficiency and application scenario integration, while opening a window for mergers and restructuring.

Fifth, shortcomings remain. SMM survey shows that the typical driving range of sodium-ion battery passenger vehicles is still relatively low, with a visible gap compared with mainstream lithium battery car models. The recycling system is nearly nonexistent, and the recycling value of sodium-ion battery cells after electrolyte filling diverges significantly, while the plan's recycling tasks do not include separate detailed rules for sodium-ion batteries. More critically, the plan also sets a target for long-life lithium batteries to achieve a cycle life of 15,000 cycles by 2030. The continuous improvement in lithium battery performance is constantly raising the substitution threshold for sodium-ion batteries—the cost advantages of sodium-ion batteries must outpace the performance gains of lithium batteries, which is the most fundamental competition of the 15th Five-Year Plan period.

Conclusion

SMM believes that the core impact of the plan on the sodium-ion battery industry lies in upgrading a cyclical alternative driven by lithium price fluctuations into an institutional industrial track with fiscal and tax tools, standardized pathways, and application scenario lists. Three observation points can verify this judgment: the actual grid connection data of hard-deadline lithium-sodium hybrid projects such as Hengshui Jizhou, the delivery pace of large sodium-ion battery orders by industry leaders, and the release speed of the national sodium-ion battery standard list. If all three materialize around 2027, the sodium-ion battery industry will enter a second growth curve driven by cost parity in the middle and late stages of the 15th Five-Year Plan period.