Material Insights · Understanding the Material World

Lithium iron phosphate batteries and Sodium-ion batteries

Sodium-ion cells aim at the same low-cost uses as LFP, storage and small EVs, without needing lithium. Whether they win depends on the lithium price: at the low prices of 2024 and 2025 LFP was very hard to undercut, and the sharp rise in lithium prices in 2026 has improved sodium's case.

Lithium iron phosphate batteries (energy) and Sodium-ion batteries (energy): 3 relationships.

How they are linked

1. Low-cost rivals

Substitution · Weak · Sodium-ion competes with LFP

Sodium-ion targets the same buyers as LFP, who value low cost, safety and long life more than energy density.

  • up to 175 Wh/kg latest sodium-ion cells, against up to 205 for LFP
  • just over 1% sodium-ion cell manufacturing capacity as a share of lithium-ion (IEA, 2026)

Sodium-ion is still tiny next to LFP, whose cells Benchmark put at around USD 60 per kWh in late 2024. Sodium cells perform well in heat and cold, which suits some storage sites, but LFP still has higher energy density.

Sources: IEA; Benchmark Mineral Intelligence

2. Lithium price decides

Cost and price · Asymmetric · Lithium prices to sodium-ion's case

Sodium-ion's main cost edge is swapping lithium for cheap sodium, so its advantage grows when lithium is expensive and shrinks when lithium is cheap.

  • about USD 9,600 per tonne battery-grade lithium carbonate, July 2025
  • about USD 600 per tonne battery-grade sodium carbonate, July 2025
  • about CNY 200,500 per tonne lithium carbonate in China, a two-year high, May 2026

Lithium carbonate in China rose from about CNY 78,500 per tonne in October 2025 to about CNY 200,500 in May 2026, roughly two and a half times as much, which strengthens sodium-ion's case. A Stanford study of over 6,000 scenarios had cautioned in early 2025 against expecting a sodium-ion price advantage before 2030 if lithium stayed near historic lows, and Benchmark expected lithium prices to rise towards the end of the decade.

Sources: Benchmark Mineral Intelligence; ESS News (on a Stanford study in Nature Energy); The Korea Herald; Trading Economics; Trading Economics

3. Same makers and lines

Geography and ownership · Rising · LFP makers also build sodium-ion

Sodium-ion cells can be made on lines similar to lithium-ion ones, so the largest LFP makers, led by CATL, are also the first to mass-produce sodium cells.

  • up to 20% possible cost saving of sodium-ion at scale against incumbents (IEA, 2024)

CATL's Naxtra sodium-ion cell, rated at up to 175 Wh/kg, went into what CATL calls the first mass-produced sodium-ion passenger car, unveiled with Changan in February 2026 for a mid-2026 launch. An unnamed senior researcher at a Korean battery maker suggested sodium cells could eventually cost about half as much as LFP. Because the same firms make both, sodium-ion is more likely to add to Chinese capacity than to break China's lead.

Sources: The Korea Herald; Battery Technology; CnEVPost

For investors

Key learnings

  1. Sodium-ion is a hedge on lithium prices: LFP was hard to beat with lithium carbonate near USD 9,600 per tonne in mid-2025, but the rise to a two-year high of about CNY 200,500 per tonne in China in May 2026 strengthens the sodium case.
  2. Sodium cell capacity is just over 1% of lithium-ion, so it is a niche in storage and small vehicles for now.
  3. The leading LFP maker, CATL, also leads sodium-ion and supplies the first mass-produced sodium-ion car, so a shift may change materials suppliers more than cell makers.

What to track

  • Lithium carbonate price: A sustained rise improves sodium-ion's cost case against LFP (Daily · Shanghai Metals Market; Fastmarkets)
  • Sodium-ion cell capacity and orders: Rising orders show the chemistry moving beyond pilots (Quarterly · company reports; IEA)

For policymakers

Key learnings

  1. Sodium-ion uses no lithium, so it could cut exposure to lithium supply for countries that do not produce lithium, such as India.
  2. Near-term cost parity with LFP is uncertain, so policy should support sodium-ion through research and early storage use rather than assume it will replace LFP.
  3. Because Chinese LFP makers also lead sodium-ion, switching chemistry alone does not diversify where cells come from.

What to track

  • Sodium-ion projects in grid storage tenders: Shows whether the chemistry is bankable for storage (As awarded · SECI and state tenders)
  • Domestic sodium-ion research and pilot lines: Indicates whether India can build its own capability (Yearly · Ministry of Heavy Industries; DST)

India

Bidders under India's cell incentive scheme mostly chose NMC or LFP and showed little interest in sodium-ion, though Reliance New Energy lists a tie-up with Faradion for sodium-ion; IEEFA has recommended industry and research partnerships to develop it.

Sources

  1. Global EV Outlook 2026: Electric vehicle batteries, IEA (2026)
  2. How do sodium ion batteries compare to LFP?, Benchmark Mineral Intelligence (2024)
  3. Sodium-ion batteries face uphill struggle to beat lithium-ion on cost, ESS News (on a Stanford study in Nature Energy) (2025)
  4. Chinese battery giant challenges EV norms with low-cost sodium-ion cells, but experts question energy limits, The Korea Herald (2025)
  5. IEA Report: EV Battery Prices Drop, LFP Surges, Sodium-ion on Horizon (on Global EV Outlook 2024), Battery Technology (2024)
  6. Assessing India's ACC PLI scheme, IEEFA and JMK Research (2026)
  7. Lithium extends drop from 2-year high, Trading Economics (2026)
  8. Lithium rises to near 2-month high, Trading Economics (2025)
  9. CATL sodium batteries begin deployment in production passenger vehicles, CnEVPost (2026)