# Lithium and Sodium-ion batteries Sodium-ion cells do the same job as lithium-ion cells with sodium, which is about 1,000 times more abundant, so they cap how far lithium prices can rise before buyers switch. Their progress follows the lithium price: investment slowed when lithium fell in 2023, and lithium prices in early 2026 at more than twice their level a year earlier have strengthened their case. Source page: https://www.materialinsights.org/links/lithium-and-sodium-ion-batteries/ [Lithium](https://www.materialinsights.org/commodities/lithium/) (commodity) and [Sodium-ion batteries](https://www.materialinsights.org/energy/e_sodium_ion/) (energy): 3 relationships. ## How they are linked ### 1. Substitute for lithium-ion *Substitution · Weak · Sodium-ion can replace lithium-ion cells* Sodium ions shuttle between electrodes much as lithium ions do, so a sodium-ion cell can replace an LFP cell where weight matters less, such as grid storage, two-wheelers and small cars. - **120 to 200 Wh/kg** typical sodium-ion energy density range - **up to 175 Wh/kg** latest sodium-ion cells, such as CATL Naxtra, close to mainstream LFP - **just over 1%** sodium-ion cell capacity as share of lithium-ion capacity The best sodium-ion cells now reach about 175 Wh/kg and retain over 90% of capacity at -40°C, which suits cold climates. CATL and Changan expect the first mass-produced sodium-ion passenger car to reach the market by mid-2026. Capacity is still tiny next to lithium-ion, so substitution is a constraint on lithium at the margin, not yet a large volume. Sources: [IEA](https://iea.org/reports/global-ev-outlook-2026/electric-vehicle-batteries); [CnEVPost](https://cnevpost.com/2026/02/05/catl-sodium-batteries-begin-deployment-in-production-passenger-vehicles/); [ESS News](https://www.ess-news.com/?p=8007); [Electric & Hybrid Vehicle Technology International](https://www.electrichybridvehicletechnology.com/news/changan-and-catl-unveil-first-mass-production-sodium-ion-battery-passenger-ev.html) ### 2. Lithium price trigger *Cost and price · Asymmetric · High lithium prices pull in sodium-ion* Sodium-ion's main advantage is cheap, stable raw materials, so it becomes attractive when lithium is expensive and loses appeal when lithium is cheap. - **USD 6,000 to 83,000/t** range of lithium carbonate prices, 2020 to 2024 - **USD 100 to 500/t** range of sodium carbonate prices over the same period - **10 GWh** China's sodium-ion cell capacity by June 2023, slower than expected as lithium fell Investment in sodium-ion cooled in 2023 as lithium prices fell; by early 2026 lithium prices were more than twice their level a year earlier, and CATL was moving sodium-ion into passenger cars. IRENA notes that lithium shortages or higher lithium costs favour sodium-ion. The link is one-sided: sodium-ion limits lithium price spikes but does little when lithium is cheap. Sources: [IEA](https://iea.org/reports/global-ev-outlook-2026/electric-vehicle-batteries); [ESS News](https://www.ess-news.com/2025/11/28/sodium-ion-battery-cell-cost-could-drop-to-40-kwh-says-irena/); [CnEVPost](https://cnevpost.com/2026/02/05/catl-sodium-batteries-begin-deployment-in-production-passenger-vehicles/); [S&P Global Market Intelligence](https://www.spglobal.com/market-intelligence/en/news-insights/articles/2023/10/falling-lithium-prices-cool-investment-in-sodium-ion-batteries-77978947) ### 3. Cap on lithium demand growth *Transition · Rising · Sodium-ion takes share from lithium in batteries* Batteries dominate lithium use, so every GWh of storage or vehicles that moves to sodium-ion removes lithium demand directly. - **88%** battery share of world lithium end use, 2025 estimate - **USD 40/kWh** sodium-ion cell cost some makers expect at scale - **up to 70 GWh** sodium-ion production capacity expected in 2025, mostly in China If makers reach USD 40 per kWh at cell level, sodium-ion would compete strongly in stationary storage, where its lower energy density matters least. Researchers expect full parity with LFP in cost and performance only by the mid-2030s, so the displacement of lithium is likely to be gradual. Sources: [ESS News](https://www.ess-news.com/2025/11/28/sodium-ion-battery-cell-cost-could-drop-to-40-kwh-says-irena/); [ESS News](https://www.ess-news.com/?p=8007); [USGS](https://pubs.usgs.gov/periodicals/mcs2026/mcs2026-lithium.pdf) ## For investors ### Key learnings 1. Sodium-ion acts as a ceiling on lithium prices: when lithium carbonate is expensive, cell makers add sodium-ion capacity. 2. The threat to lithium demand is real but slow, with sodium-ion capacity at just over 1% of lithium-ion's. 3. Lithium producers face the most risk in stationary storage, where sodium-ion's lower energy density matters least. ### What to track - **Lithium carbonate spot price in China**: Sustained high prices speed sodium-ion adoption; low prices slow it (Daily · price reporting agencies; Guangzhou Futures Exchange) - **Sodium-ion cell capacity and output**: Rising output shows substitution moving from pilot to volume (Quarterly · IEA, industry trackers) - **Sodium-ion use in passenger cars**: Wider vehicle use would extend substitution beyond storage (As announced · CATL, BYD and carmaker launches) ## For policymakers ### Key learnings 1. Sodium-ion reduces dependence on lithium, a mineral most importing countries lack, so it is a supply security option. 2. Battery incentives that are neutral on chemistry allow sodium-ion to compete where it suits, such as grid storage and cold regions. 3. Sodium-ion manufacturing is concentrated in China, so building domestic cell capacity matters as much as the choice of chemistry. ### What to track - **Share of storage tenders won by sodium-ion**: Shows whether the technology is competitive without subsidy (As awarded · national energy agencies) - **Lithium import bill**: Indicates the value of substituting part of battery demand (Annual · trade statistics) ## Sources 1. [Global EV Outlook 2026: electric vehicle batteries](https://iea.org/reports/global-ev-outlook-2026/electric-vehicle-batteries), IEA (2026) 2. [Sodium-ion battery cell cost could drop to $40/kWh, says IRENA](https://www.ess-news.com/2025/11/28/sodium-ion-battery-cell-cost-could-drop-to-40-kwh-says-irena/), ESS News (2025) 3. [CATL's sodium-ion batteries begin deployment in production-ready passenger vehicles](https://cnevpost.com/2026/02/05/catl-sodium-batteries-begin-deployment-in-production-passenger-vehicles/), CnEVPost (2026) 4. [Falling lithium prices cool investment in sodium-ion batteries](https://www.spglobal.com/market-intelligence/en/news-insights/articles/2023/10/falling-lithium-prices-cool-investment-in-sodium-ion-batteries-77978947), S&P Global Market Intelligence (2023) 5. [Sodium-ion batteries now competitive in niche markets](https://www.ess-news.com/?p=8007), ESS News (2026) 6. [Mineral Commodity Summaries 2026: Lithium](https://pubs.usgs.gov/periodicals/mcs2026/mcs2026-lithium.pdf), USGS (2026) 7. [Changan and CATL unveil first mass-production sodium-ion battery passenger EV](https://www.electrichybridvehicletechnology.com/news/changan-and-catl-unveil-first-mass-production-sodium-ion-battery-passenger-ev.html), Electric & Hybrid Vehicle Technology International (2026)