【SMM Analysis】When the Sodium-Ion Battery Opportunity Emerges in 2026: An Analysis of the Industry's Current Status and Market Challenges

Lithium carbonate, as a core raw material in the lithium battery industry chain, has seen recent price fluctuations driving up lithium battery production costs, while also significantly boosting market attention for the sodium-ion battery (hereinafter referred to as "sodium-ion battery") industry, which was previously in a preparatory phase. Sodium-ion battery enterprises generally report a notable increase in customer inquiries and collaborations recently, with many traditional top-tier lithium battery enterprises proactively engaging in the upstream material supply chain for sodium-ion batteries. The market activity for sodium-ion batteries has experienced a phased recovery. However, beneath this enthusiasm, the sodium-ion battery industry still faces multiple challenges, including capacity bottlenecks, technological breakthroughs yet to be achieved, and obstacles in cost reduction. The industrialization process still needs to overcome several hurdles.

I. Rising Lithium Carbonate Prices Act as a Catalyst, Sustained Heating Up of Sodium-Ion Battery Market Demand

The lithium battery industry has developed for many years with an extremely high reliance on lithium carbonate, and the volatile price trends of lithium carbonate have always been a key factor constraining the cost stability of lithium batteries. Since H2 2025, factors such as equipment maintenance and production restrictions or halts for maintenance at upstream lithium chemical enterprises have led to a contraction in lithium carbonate supply. Coupled with structurally robust demand from downstream energy storage systems (ESS) and power batteries, this has driven a rapid rebound in lithium carbonate prices by the end of the year.

Against this backdrop, sodium-ion batteries, as an important complementary technological pathway to lithium batteries, have once again highlighted their advantages: abundant sodium resources in the Earth's crust and low cost. This has made them an important choice for enterprises to hedge against lithium battery cost pressures.

The heating up of market demand is directly reflected in the increased activity of customer inquiries and collaboration engagements. Sodium-ion battery material enterprises reveal that recently, not only have inquiries from small and medium-sized ESS enterprises and low-speed EV manufacturers increased, but several traditional large lithium battery manufacturers have also proactively sought collaborations.

The core objective is to secure stable supplies of key materials such as sodium-ion battery cathodes and anodes. This trend is particularly evident in the strategies of top-tier enterprises, whose entry not only validates the market value of sodium-ion batteries but is also expected to accelerate the industry's scaling process.

II. Industry Status: Amid Boosted Demand, Capacity and Technological Bottlenecks in Multiple Segments Become Prominent

Despite continuously increasing market attention, the sodium-ion battery industry is currently still in the early stages of industrialization. Core segments including cathodes, anodes, and battery cells face significant capacity bottlenecks and technological challenges, and have not yet developed supply capabilities that match the growth in demand.

(I) Cathode Materials: Clear Mainstream Pathways but Limited Capacity, Expansion Wave Is Expected to Begin

Currently, sodium-ion battery cathode materials have formed three main technical pathways: polyanion (represented by NFPP), layered oxide, and Prussian blue (white). Among these, NFPP has established a dominant position due to its balanced performance and cost potential, achieving a transition from small- to medium-scale trial production to 10kt-level mass production lines. However, in terms of capacity scale, the actual utilizable capacity of domestic sodium-ion battery cathode materials remains relatively limited, with the overall capacity not exceeding 100,000 mt, making it difficult to meet potential large-scale demand.

Faced with rising market demand, cathode material enterprises have planned capacity expansions. The industry generally believes that large-scale capacity is key to securing stable, high-volume battery orders, making 2026 a concentrated period for sodium-ion battery cathode capacity expansion. Notably, the current mass production price of NFPP remains higher than industry expectations, with bulk transaction prices concentrated in the range of 20,000-25,000 yuan/mt, still some distance from the target of achieving costs below 20,000 yuan/mt. Recent price increases in the iron phosphate market have further intensified cost reduction pressure on NFPP—driven by rising prices of raw materials such as industrial-grade MAP, phosphoric acid, and ferrous sulphate, iron phosphate prices have increased by approximately 10% recently.

However, sodium-ion battery cathode enterprises have significantly lower procurement volumes compared to LFP enterprises, resulting in weak bargaining power within the industry chain and difficulty in passing on raw material cost increases, adding another obstacle to NFPP's cost reduction progress.

(II) Hard Carbon Anode: Significant Capacity Gap, Technical Routes Need Optimization

Hard carbon material is currently the only anode option for commercial sodium-ion battery applications, but its capacity bottleneck is more pronounced than that of the cathode.

Although hard carbon production is expected to achieve over 90% MoM growth in 2025, high-grade, stably producible capacity remains tight, struggling to keep pace with cathode material growth. Currently, the actual utilizable hard carbon anode capacity in China also does not exceed 100,000 mt, and due to factors such as unstable raw material costs and complex production processes, capacity release is slow.

On the technical front, the process route for hard carbon anodes is not yet fully established. The mainstream coconut shell route faces sustainability pressure regarding raw materials, while alternative routes such as coal-based, bamboo, and biomass still require further improvement in product performance.

The uncertainty in technical routes not only affects the efficiency of capacity release but also poses challenges for downstream battery cell manufacturers in product matching, becoming a key shortcoming constraining the development of the sodium-ion battery industry.

(III) Battery Cell Segment: Low Capacity Scale, Enterprises Rely on Lithium Battery Business to Balance Operations

The battery cell is the core carrier for sodium-ion battery industrialisation, but its capacity scale remains relatively low. Currently, actual sodium-ion battery cell capacity in China is less than 10 GWh, far below the capacity scale of lithium batteries, which often reaches hundreds of GWh.Due to factors such as limited sodium-ion battery order sizes and insufficient profitability, some sodium-ion battery cell manufacturers, while ensuring the delivery of sodium-ion battery orders, have to take on lithium battery orders to maintain normal company operations. From the market application perspective, the current shipment focus of sodium-ion battery cells is concentrated in niche segments such as electric two-wheelers and start-stop power supplies, while commercialization progress in mainstream areas like ESS and NEVs has fallen short of expectations.

This is partly due to the fact that performance metrics such as energy density and cycle life of sodium-ion batteries still require improvement, and it is also related to the lack of absolute competitiveness in sodium-ion battery cell prices—taking the 280Ah prismatic ESS battery cell as an example, sodium-ion battery cell prices remain significantly higher than lithium battery cells, making it difficult to establish a substitution advantage in the large-scale ESS market.

III. Summary and Outlook: Opportunities and Challenges Coexist, 2026 Becomes a Critical Period for Commercialization

Overall, the recent fluctuations in lithium carbonate prices have presented a rare market opportunity for the sodium-ion battery industry. The entry of traditional lithium battery giants has further heightened industry attention, accelerating the transition of sodium-ion batteries from "technical verification" to "market verification." However, from the current industry perspective, the sodium-ion battery sector still faces multiple challenges: a significant capacity gap in core materials, immature technical routes for hard carbon anodes; cost reduction obstacles for NFPP cathodes, insufficient price competitiveness of battery cells; application scenarios remain concentrated in niche areas, with slow penetration into mainstream markets.

Looking ahead to 2026, with the expansion of cathode material production and continuous optimization of hard carbon anode technology, the scale effect of the sodium-ion battery industry chain is expected to gradually emerge, and costs across various segments may see phased declines. The core logic of industry development will shift from "capacity construction" to "cost competition" and "market verification." The launch of ESS projects, exploration of overseas low-temperature markets, and application of lithium-sodium synergistic technologies may become key directions for breakthroughs in sodium-ion battery commercialization. It is important to note that sodium-ion batteries are not substitutes for lithium batteries but important supplements. The healthy development of the industry will still rely on technological innovation to break through performance bottlenecks, reduce costs through scaled production, and ultimately build core competitiveness in differentiated scenarios.