Why the Biggest Battery Company is Betting Against Lithium

Author: Matt Ferrell

Sodium-ion battery technology isn’t exactly new, but something interesting is happening. CATL, the world’s biggest lithium battery manufacturer, says that up to half the market could switch to sodium. That’s right—the biggest name in lithium batteries is betting against lithium. Looks like lithium might need to recharge its reputation.

After all, sodium-ion batteries are nearly as good lithium, and salt is much cheaper and easier to access than lithium. So maybe its not surprising that CATL and some other companies are getting ready to manufacture huge numbers of them in preparation for what could be a massive market shift.

But is sodium really the future of energy storage, or is it just another battery technology destined to live in lithium-ion’s shadow?

CATL Tease

As I mentioned, CATL is the world’s largest battery manufacturer. For perspective, in 2023, CATL’s batteries made up around 40% of the global market.¹ That’s massive—and a good reason to take the company’s views on battery tech seriously. So, it’s pretty interesting that in a November 2024 interview with Reuters, CATL co-founder Robin Zeng pushed back on the idea that solid-state batteries are the next big thing.² Instead, he argued that sodium-ion batteries are the better bet—one with the potential to replace up to half of the market CATL currently dominates.³

And this isn’t just talk. CATL already offers a sodium battery as part of its Freevoy battery pack, a hybrid system combining lithium and sodium batteries for long-range EVs.⁴ That’s surprising, considering sodium’s biggest drawback—its lower energy density—usually means bulkier, heavier batteries. And in EVs, every ounce and inch matters.

But CATL isn’t stopping there. The company is set to launch a second-generation sodium battery later this year,⁵ claiming an energy density of over 200 Wh/kg. That’s still below today’s best lithium-ion batteries at 300 Wh/kg,⁵ but it’s a big leap from its predecessor’s 160 Wh/kg and a sign of serious progress.⁶

CATL isn’t alone in this push—companies worldwide are ramping up sodium-ion battery production, preparing for what could be a massive market shift. But are sodium batteries truly the next big thing? And if so, what potential does Robin Zeng—and the rest of the industry—see in them?

Sodium-Ion Pros

The concept behind sodium-ion batteries is pretty straightforward. Sodium behaves a lot like lithium, so SIBs share essentially the same structure as their lithium-ion cousins.⁷ They also have a comparable round-trip efficiency (RTE), meaning you get back nearly the same amount of energy you put in.⁸ But there’s a tradeoff—SIBs are less energy-dense than lithium-ion batteries, which has historically limited their applications.⁸

So why is the battery industry so excited about SIBs if they’re almost as good as lithium but still lacking in key areas? Well, salt is a lot more accommodating. It’s vastly more abundant—there’s an entire ocean full of it. It’s also easier to extract and doesn’t require the destructive mining practices needed for lithium and other precious metals.⁹ All this makes SIBs cheaper, more sustainable, and less vulnerable to supply-chain disruptions and geopolitical tensions.

Beyond cost and sustainability, SIBs have other advantages. Their chemistry gives them excellent resistance to extreme temperatures.⁹ They’re less prone to thermal runaway and actually perform better in cold conditions than lithium-ion batteries.⁸⁶

Now, to be fair, thermal runaway is pretty rare in lithium-ion batteries—you won’t have an issue unless you take a sledgehammer to your laptop. But in large-scale energy storage, where hundreds of batteries are packed together, safety matters. If you’re setting up a solar farm in a hot, dry, wildfire-prone region—say, the U.S. Southwest or much of Australia—SIBs might be the smarter, safer choice.

That cold resistance is also why some in the EV industry are paying attention, despite SIBs’ energy-density shortcomings.⁶ In freezing temperatures, lithium ions can “get lost” on their way into the anode, plating onto the outside instead, which lowers efficiency or even causes a short.¹⁰ Sodium batteries are more resistant to this problem. Most lithium batteries start struggling at -20°C (-4°F),⁸ while CATL claims its second-gen sodium batteries can handle as low as -40°C (-40°F)—one reason the company is eyeing them for EVs.⁵

And if the world’s largest battery maker getting serious about SIBs isn’t enough to grab your attention, just wait until you hear what the second-largest is up to.

BYD and China

That would be BYD—CATL’s longtime rival. And BYD is going big on sodium. The company broke ground on a new gigafactory last year, and once it’s fully operational in 2027, it’s expected to crank out 30 gigawatt-hours of sodium-ion batteries per year.¹¹ Looks like BYD is really seasoning the competition.

This is part of BYD’s push to diversify its energy storage portfolio and drive down the cost of sodium batteries. The company says its SIBs are already on track to match the price of standard lithium iron phosphate (LFP) batteries by 2025—and eventually, as the technology matures, they could be up to 70% cheaper.¹²

BYD is also rolling out its first utility-scale sodium battery energy storage system (BESS), the MC Cube SIB Energy Storage System. (What a coincidence—MC Cube was my DJ name.) The system boasts a power output of 1,155 kW and a storage capacity of 2.3 MWh. That’s solid, but still lower than the average lithium-ion BESS, which typically holds around 5 MWh.¹² So the big questions are: Will sodium’s unique advantages help it compete with existing lithium systems? And will BYD’s predicted price drop actually happen? If either answer is yes, expect to see a lot more SIBs in the near future. But for now, we wait.¹³

And BYD isn’t the only one making moves in China. Zhejiang Hu Na Energy recently announced the registration and coding of its own sodium-ion production line. The company can now produce 4 GWh of sodium-ion battery cells and modules. And this is just phase one. The company claims it will scale up to 20 GWh of sodium-ion production capacity.¹⁴

Of course, they haven’t set a firm deadline for that (so, take it with a few grains of sodium), but it’s another signal that the industry is shifting. And given that the planet isn’t running out of salt anytime soon…uh, yeah, I sure hope it does.

Natron

Of course, China isn’t the only player pushing ahead with sodium-ion tech. In the U.S., California-based Natron Energy has developed SIBs that allegedly charge and discharge 10 times faster than standard lithium-ion batteries. With an estimated lifespan of 50,000 cycles, they sound promising. But there’s a catch—Natron hasn’t released weight-based energy density figures, which is typically a weak spot for SIBs. A 2022 Chemical & Engineering News article put their energy density at just 70 Wh/kg—on the very low end of the sodium-ion spectrum.¹⁵ While that’s fine for stationary storage applications like data centers and telecoms, it doesn’t exactly inspire confidence in their EV ambitions.¹⁶

What really makes Natron worth discussing, though, is its push for full-scale commercial production. The company is building its own sodium-ion gigafactory in Edgecombe County, North Carolina, with a planned production capacity of 24 GWh.¹⁴

And this isn’t Natron’s first rodeo. Last year, it opened a smaller sodium battery factory in Holland, Michigan—currently the only one of its kind in the U.S., at least until the larger facility comes online.¹⁷ At full capacity, the Holland plant is expected to produce 600 megawatts of sodium-ion batteries annually. It’s unclear how much it’s producing right now, but Natron says battery shipments will begin this June.¹⁶

Dincă Group

Though SIBs are finally coming into their own, researchers haven’t stopped pushing the envelope. Over in the U.S., scientists from the Dincă Lab at Princeton University and MIT have developed a sodium-ion battery using a new organic cathode made from deep breath bis-tetraaminobenzoquinone, or TAQ. I’m just going to call it TAQ—because I’d rather not short-circuit my brain trying to pronounce that.

So, what’s an organic cathode, and what does it do for a battery? Here, “organic” just means that this cathode is made from readily available, non-metallic elements — stuff like carbon, hydrogen, oxygen, and nitrogen.¹⁸ Lithium-ion battery anodes are often made from similar materials (usually graphite), but making the cathode organic as well is a big deal. Normally, cathodes rely on metals that are scarce and difficult to mine, like cobalt. A fully organic battery—where both the anode and cathode are metal-free—could be a game-changer.

So why aren’t all batteries using organic cathodes already? The problem is that they tend to dissolve into the electrolyte, degrading both the electrolyte and the cathode. But according to the Dincă Group, TAQ is “completely insoluble,” highly conductive, and boasts a high energy density.¹⁸ In fact, it could rival traditional cobalt-based cathodes at roughly one-third the cost.¹⁸

TAQ was originally developed for lithium-ion batteries, but the results sparked a new idea: What if they applied it to sodium-ion batteries? Since one of sodium’s biggest drawbacks is its lower energy density, why not address that weakness while keeping all the cost and sustainability benefits?¹⁹ Adapting the cathode for sodium batteries took a year of refinement, as the researchers had to tweak design principles that didn’t translate easily from lithium-ion technology. But the results surprised them.²⁰

In the words of lead author Tianyang Chen:

“The binder we chose, carbon nanotubes, facilitates the mixing of TAQ crystallites and carbon black particles, leading to a homogeneous electrode. The carbon nanotubes closely wrap around TAQ crystallites and interconnect them. Both of these factors promote electron transport within the electrode bulk, enabling an almost 100% active material utilization, which leads to almost theoretical maximum capacity.”¹⁹

Now, unlike the other sodium batteries we’ve discussed, this breakthrough is still in the lab. There’s no telling when—or even if—it will be commercialized, pass third-party tests, or overcome all the usual hurdles. But it’s still an exciting development for both lithium and sodium batteries. And for what it’s worth, the Dincă Group’s initial research was funded by Lamborghini.¹⁹ So if this tech does make it to market, a luxury automaker is already in line, ready to capitalize on it.

Northvolt

While the future looks bright for SIBs, beware—just because it glitters doesn’t mean it’s… salt.

In November 2023, Swedish manufacturer Northvolt unveiled its own sodium battery, boasting a respectable 160 Wh/kg energy density.²¹ Respectable, but not exactly rock salt solid. The company had already made waves with its nickel-manganese-cobalt (NMC) formula, but like many others, it aimed to expand. After launching its first gigafactory in Skellefteå, Sweden,²² and setting up additional facilities in Sweden, Poland, and Germany, Northvolt set its sights on North America, planning a battery factory in Montreal.²³

But by the following November, Northvolt had filed for Chapter 11 bankruptcy.²⁴ Since this is the restructuring type of bankruptcy, it’s not as dire as it sounds. Northvolt says its Swedish operations will continue as usual, and its German and North American subsidiaries—funded separately—aren’t affected.

I’m not an international corporate financial law channel, so I won’t pretend to know all the implications. Chapter 11 is complicated—or so I’m told.²⁵ On one hand, Northvolt claims this “voluntary reorganization” will give them access to $145 million in cash collateral and $100 million in debtor-in-possession financing.²⁴ On the other hand, bankruptcy—no matter the type—doesn’t exactly inspire confidence. So, is this just financial finessing or a sign of deeper trouble? I guess we’ll find out.

Lingering Issues

There are still some lingering issues with sodium batteries. Despite what CATL, BYD, and Natron are saying, I remain skeptical about their role in EVs. The biggest hurdle? Energy density. Sodium-ion batteries simply don’t pack as much power per pound as lithium-ion ones. And while they use cheaper materials, their lower energy density means the cost per unit of stored energy actually ends up higher. The savings from cheaper components might eventually balance this out—but for now, it’s complicated.²⁶

There’s also an economic twist. Sodium batteries gained traction during the lithium shortage, but now? Lithium prices have plummeted—down 70% in the past three years due to oversupply. That price drop has weakened the financial case for sodium, at least for now.²⁷

In a February 2025 Science article, battery chemist Dan Steingart (Columbia University) pointed out that sodium-ion manufacturers are still too small to benefit from economies of scale.²⁷ And a January 2025 Stanford study examining SIBs’ path to market success noted that when—or if—they’ll become cost-competitive is still highly uncertain.²⁸

And, of course, lithium still has an iron(-phosphate) grip on multiple industries. Even with SIBs’ potential “drag-n-drop” compatibility, shifting manufacturing and consumer demand will take time. This creates a catch-22: sodium batteries will only get cheaper when they’re widely produced, but they might never hit that scale until they’re already cheaper.²⁷

So, where does that leave SIBs? Honestly, in a pretty exciting spot. Too often, when covering new battery tech, I have to pump the brakes with the usual disclaimers: “It’s still in research,” “It’s years away from commercialization,” etc. But sodium-ion batteries? They’re already rolling out, backed by some of the biggest battery makers on the planet. This might be one of the few times a “salty” market outlook is actually a good thing. That alone puts them high on the Technological Readiness Level—arguably a 9 for BESS applications, and a few steps behind that for others.²⁹

Yes, SIBs still have hurdles. But compared to other emerging battery technologies, these challenges seem much more manageable. And if they pull it off, sodium-ion might just be the “seasoning” our energy grid needs.