Sodium-ion batteries have secured over 70 GWh of supply agreements as commercial production begins
Wood Mackenzie estimates 21% lower total cost of ownership over 20 years, despite higher upfront costs than LFP
Cell-level cost parity could be reached by the end of 2026, while module- and system-level parity is expected after 2030
Sodium-ion batteries are gaining ground as an alternative to lithium-ion technology, with more than 70 GWh of supply agreements already secured. A new Wood Mackenzie analysis finds that while sodium-ion batteries still cost more upfront, they could cost less over an energy storage project’s lifetime. Their wider operating temperature range and reduced dependence on lithium supply chains are also attracting interest.
The report, Sodium-ion batteries: commercialization begins, economics to follow, looks at developments in China, the US, Germany, and India. It identifies sodium-ion as an emerging alternative to lithium-ion batteries, although higher system costs and limited manufacturing scale continue to hold back wider adoption.
Wood Mackenzie puts the global average upfront cost of sodium-ion battery systems at $229/kWh, compared with $200/kWh for lithium iron phosphate (LFP) systems. However, its analysis indicates that sodium-ion could have a 21% lower total cost of ownership over 20 years. This is mainly due to lower operating expenses and the possibility of avoiding battery augmentation, which involves adding capacity later to offset battery degradation.
The cost gap could narrow as production ramps up. According to Wood Mackenzie, leading sodium-ion manufacturers may be able to match LFP cell costs by the end of 2026. But reaching the same cost at the module and system levels will take longer, with parity expected only after 2030.
China is taking the lead in sodium-ion manufacturing. Wood Mackenzie estimates a learning rate of 18% to 20% for China during 2026-2035. BYD has 30 GWh of planned production capacity, while CATL expects cumulative sodium-ion battery shipments to reach at least 1 GWh by the end of 2026. The company has already introduced its TENER Sodium energy storage system, with international deliveries planned for June 2027 (see CATL Debuts Commercial Sodium-Ion Energy Storage).
The US and Europe have secured significant sodium-ion battery supply agreements. India, meanwhile, is still in the early stages of commercial validation.
China has exempted qualifying sodium-ion batteries from the consumption tax on lithium-ion batteries until the end of 2028. LFP batteries face a 2% levy from September 2026, increasing to 4% in September 2027.
According to Wood Mackenzie, sodium-ion system economics remain stable across storage durations of 2 to 4 hours, although LFP remains the more established option for projects being deployed today. Sodium-ion still faces challenges in scaling production, refining cell materials, and establishing a record of long-term performance.