Key Takeaways:
CATL, the world's largest battery maker, will begin mass-producing sodium-ion batteries this year and shift its long-term research focus to lithium-air technology, signaling a two-front strategy to cut costs and push beyond the limits of lithium-ion chemistry.
"The raw materials for sodium-ion batteries are abundant and the cost is lower compared to lithium-ion," Wu Kai, chief scientist at CATL and an academician at the Chinese Academy of Engineering, said at the 2026 Equipping Powerful Nations Forum. He added that lithium-air batteries, which use lithium as the anode and oxygen from the air as the cathode reactant, offer ultra-high theoretical energy density and will be a key battleground for next-generation battery competition.
Sodium-ion cells have drawn intense interest from automakers and grid operators because sodium is widely available and far cheaper to source than lithium. A recent teardown analysis of commercial sodium-ion cells from Chinese manufacturer Hina Battery showed the technology uses a tabless double-aluminum current collector architecture — a design choice enabled by sodium's chemical compatibility with aluminum, which eliminates the need for copper foil on the anode side. That structural difference alone could lower materials costs while simplifying production, according to researchers who tested 120 Hina cells and found strong batch uniformity across power output and impedance.
The technology still faces hurdles. Low-temperature charging remains a weakness, requiring careful thermal management for operation below 0 degrees Celsius, and energy density trails the best lithium-ion packs, limiting sodium-ion's role in long-range electric vehicles. But for shorter-range EVs, grid storage, and commercial vehicles — where lithium's energy density premium may not justify its cost — sodium-ion presents a viable alternative.
CATL's push into sodium-ion comes as the company deepens its capacity expansion. The battery giant has five core projects under construction requiring a total investment of 149 billion yuan ($20.6 billion) by the end of 2025, with nearly 100 billion yuan still to be deployed, according to bond issuance documents filed in May. Its Shandong manufacturing base in Jining, with a planned capacity of 160 GWh, began Phase I production in May 2025 and completed Phase II in April 2026, bringing 60 GWh online to serve automaker clusters in northern and eastern China.
Lithium-air batteries represent a longer-term bet. The chemistry's theoretical energy density far exceeds lithium-ion, potentially enabling EVs with driving ranges comparable to gasoline vehicles. But the technology has historically struggled with cycle life, electrolyte stability, and air management — challenges that have kept it in the lab for more than a decade. CATL's decision to publicly flag lithium-air as a priority suggests the company believes those barriers are surmountable within a commercially relevant timeframe.
For investors, the dual-track strategy creates divergent implications. Sodium-ion mass production could pressure lithium carbonate prices by reducing demand growth for lithium in the battery sector, while benefiting suppliers of Prussian blue analogs and layered oxide cathode materials. Lithium-air R&D, if successful, would represent a paradigm shift in energy storage — though commercial deployment remains years away. CATL, which reported net profit of 76.8 billion yuan in 2025 on revenue of 423.7 billion yuan, has the financial firepower to pursue both tracks simultaneously.
This article is for informational purposes only and does not constitute investment advice.
