Revolutionizing Energy: China's Sodium-Ion Batteries Set to Outpace Lithium by 2025, Sparking a $14 Billion Market Transformation

SNE Research, a South Korean market research firm, has released a report predicting that Chinese sodium-ion batteries will enter mass production by 2025, primarily for use in two-wheelers, small electric vehicles, and energy storage domains. By 2035, the price of sodium-ion batteries is expected to be 11% to 24% lower than that of lithium iron phosphate (LFP) batteries, with the market size reaching $14.2 billion annually.

Sodium-ion batteries, primarily made from sodium, are characterized by lower energy density, high electrochemical stability, and better low-temperature performance. Based on these characteristics, the industry generally believes that sodium batteries have the potential to find a place in new energy passenger vehicles, energy storage, and low-speed two-wheelers, complementing lithium batteries and continuously serving the new energy industry.

Re-emerging and Continuing to Breakthrough

Sodium-ion batteries are recognized as the next generation of battery technology that can effectively supplement lithium batteries. However, both were discovered almost simultaneously.

In 1976, M. Stanley Whittingham, the father of lithium batteries, discovered that TiS2 could intercalate and deintercalate lithium ions (Li+), creating a Li/TiS2 battery. The reversible intercalation/deintercalation mechanism of sodium ions (Na+) in TiS2 was also discovered.

In 1980, French scientist Professor Armand introduced the concept of the "Rocking Chair Battery." Like a rocking chair with the battery's two poles at its ends, lithium ions move back and forth. Sodium-ion batteries operate on the same principle as lithium-ion batteries and are also known as rocking chair batteries.

Despite their simultaneous discovery, commercialization trends led to different fates. Lithium batteries, first solving the anode material issue with graphite, gradually became the "king of batteries," while sodium-ion batteries, struggling to find suitable anode materials, gradually faded from the public eye.

In 2021, Chinese battery company CATL announced the development and production of a new generation of sodium-ion batteries, reigniting interest in their research and development. Following this, in 2022, the price of lithium carbonate, a key raw material for lithium-ion batteries, soared to 600,000 yuan per ton, giving the cost-effective sodium-ion batteries a resurgence.

In 2023, China's sodium-ion battery industry saw rapid development. According to incomplete statistics from the Battery Network, several sodium battery projects commenced in large volumes, with investments often reaching billions or tens of billions, making sodium batteries a significant investment route in the battery industry.

As of 2023, many sodium battery projects are still in pilot lines and testing stages. With more sodium battery projects gradually being established, the application of sodium battery products will accelerate. Although sodium batteries still face some performance bottlenecks, lithium battery industry chains, including startups, have already begun to enter this field, and sodium batteries will also empower the new energy industry alongside lithium batteries.

Moreover, investment and financing in the sodium battery field are heating up. According to incomplete statistics from the Battery Network, as of December 31, 2023, 25 companies in the sodium battery industry chain have undergone 82 financing rounds.

Notably, with lithium prices experiencing a roller-coaster drop in 2023, concerns have arisen about the future development space for sodium batteries. Multi-dimensional previously stated in response to investor questions that "even if the price of lithium carbonate falls to 100,000 yuan/ton, sodium batteries will still be competitive."

Li Xin, chairman of Huzhou Guosheng New Energy Technology Co., Ltd., also analyzed in a recent exchange with the Battery Network that as domestic battery material companies enter the mass production stage in 2024, the cost of materials will decrease, further reducing the prices of cathode materials, anode materials, and electrolytes for sodium batteries. Coupled with the gradual maturation of sodium battery production processes, the cost advantage of sodium batteries over lithium batteries will become apparent. When sodium battery capacity reaches gigawatt levels, the BOM cost will drop to within 0.35 yuan/Wh.

SNE pointed out that China has already started introducing two-wheelers and electric vehicles using sodium-ion batteries. Leading Chinese electric motorcycle company Yadea and Huayu Energy's newly established company launched the electric motorcycle model "JiNa S9" at the end of 2023; in January 2024, Chinese electric vehicle brand JAC Motors began selling the Fairy electric vehicle, which uses Zhongke Haina 32140 cylindrical sodium-ion batteries. SNE predicts that by 2035, the annual production capacity of sodium-ion batteries planned by Chinese companies is expected to reach 464 GWh.

Dynamics continue to accelerate implementation

Entering 2024, China's sodium-ion battery industry dynamics continue to be released intensively:

- On January 2, Cabot and Qingdao Mingheda Graphite New Materials Co., Ltd., Huzhou Avocado Investment Partnership (limited partnership

), and other investors signed an equity investment agreement, successfully securing 37.6 million yuan in strategic investment. This financing will help the company accelerate the mass production of tens of thousands of tons of sodium battery anode materials.

- On the morning of January 4, BYD (Xuzhou) sodium-ion battery project commenced, with a total investment of 10 billion yuan, mainly producing sodium-ion battery cells and related PACK products, with a planned annual capacity of 30 GWh.

- On January 12, Tongxing Environmental Protection announced that the joint venture company it participated in had recently completed the relevant industrial and commercial registration procedures and obtained a business license. The joint venture company will mainly engage in the technical development, industrial implementation, and commercial promotion of sodium-ion battery cathode materials. In addition, the transformation and application of other key materials for sodium-ion batteries, such as anodes and electrolytes, will be developed as needed by the company.

- On January 15, QingNa Technology and Limar Group signed a strategic cooperation agreement. Limar Group will purchase sodium-ion batteries produced by QingNa Technology for its two-wheelers, three-wheelers, and other complete vehicle production, with an annual target purchase volume of 0.5 GWh. Notably, at the end of 2023, QingNa Technology just received an order for 5,000 sets of sodium-ion battery packs from Jinpeng Group's forklift business division. QingNa Technology stated that the company's current strategic cooperation agreements have exceeded 24 GWh.

- On January 22, Nake Energy and Pangu New Energy recently signed a strategic cooperation agreement. The two parties will rely on their respective advantages, market-oriented, to carry out in-depth strategic cooperation in the development and industrialization of sodium-ion batteries and key materials, and provide a clear target guide for a supply and sales plan of no less than 3,000 tons for the next three years.

- On January 24, Zhongxin Fluorine Materials released a private placement plan, intending to raise no more than 636 million yuan for three major projects and to supplement working capital. Among them, the Zhongxin Gaobao New Electrolyte Material Construction Project aims to enrich the product line of its subsidiary Gaobao Technology, optimize product structure, and add an annual production of 6,000 tons of sodium fluoride and 10,000 tons of hexafluorophosphate.

- On January 24, Kaiyuan Education, a listed company in vocational education, and its wholly-owned subsidiary Luyuan Energy Materials signed a cooperation agreement with the People's Government of Huimin County, Binzhou City, Shandong Province, for the construction of a GW-level large-scale energy storage project and sodium-ion battery cell construction. The two parties will cooperate mutually to build a sodium-ion battery cell project within the jurisdiction of Huimin County; the scale is a 1GW/2GWh large-scale energy storage power station project.

- On January 28, the first batch of large-capacity, high-energy-density nanosolid-state sodium-ion battery pilot products from the Nikola Technology Industrial Research Institute in Chongqing Tongnan High-tech Zone was launched. The battery, based on high-performance cathode and anode materials independently developed by the Nikola Technology Industrial Research Institute, combined with anode surface nanomodification, low-temperature electrolyte formulation, and in-situ solidification of the electrolyte, achieves an energy density of 160-180Wh/kg, equivalent to lithium iron phosphate batteries.

- At the signing ceremony and press conference held on the afternoon of January 28, the Nikola Technology Industrial Research Institute signed project cooperation agreements with Gaole New Energy Technology (Zhejiang) Co., Ltd. and Yanshan University to jointly develop nanosolid-state sodium-ion batteries and promote the transformation of scientific and technological achievements.

- On the afternoon of January 28, Huzhou ChaoNa New Energy Technology Co., Ltd. signed a contract with Mianzhu, Sichuan, for the industrialization project of key materials for large-scale energy storage sodium-ion batteries. The project, with a total investment of 3 billion yuan, will build a production base for 80,000 tons of sodium-ion battery cathode materials in Mianzhu.

In addition to the above-mentioned Chinese company dynamics, on January 12, Stellantis, the world's fourth-largest automaker, announced that it would invest in French sodium-ion battery startup Tiamat to diversify its product portfolio and mass-produce electric vehicles, reducing dependence on scarce resources. Tiamat will use the funds from this round of financing, including from Stellantis, to start construction of a sodium-ion battery factory in France. Not only French companies, but enterprises from the United States, the United Kingdom, Sweden, and other countries have also successively announced plans for mass production of sodium-ion batteries.

If you have any questions regarding the industry data, or the news (e.g. how this can affect your business). Please feel free to reach out to me:

Robin He

SMM Li-ion Battery Materials Department

E: robinhe@smm.cn | T: +86-21-51595884