This has, understandably, sent U.S. manufactures searching for alternatives, and lately they have struck on one that has the industry all excited: sodium-ion batteries. As global interest ramps up, domestic manufacturers have at least a prayer of building out their own sodium-ion supply chains before China completely takes over. Research and consulting firm Benchmark Mineral Intelligence expects to see a 350% jump in announced sodium-ion battery manufacturing capacity this year alone. And while the supply of these batteries is only in the tens of gigawatts today, Benchmark forecasts that it will be in the hundreds of gigawatts by 2030.
Sodium-ion technology itself isn’t particularly disruptive — it’s not new, nor does it serve a new market, exactly. It performs roughly the same as lithium-ion in energy storage systems, providing around four hours of power for either grid-scale or residential applications. But sodium-ion chemistries have a handful of key advantages — perhaps most critically that sodium is significantly more abundant in the U.S. than lithium, and is thus far cheaper. China has unsurprisingly taken an early lead in the sodium-ion market anyway, reportedly opening its first sodium-ion battery storage station in May. But because the industry is still so nascent, domestic manufacturers say there’s still time for them to get in the game.
“We’re focused on catching up to China in lithium-ion batteries, where in our view, we should be leapfrogging to what’s next,” Cam Dales, co-founder and chief commercial officer at Peak Energy, a Bay Area-based sodium-ion battery storage startup, told me. “There’s no CATL of the United States. That’s ultimately our ambition, is to become that.”
As political tensions between China and the U.S. mount, relying on a Chinese-dominated battery supply chain is geopolitically risky. Last month, the Biden administration announced a steep increase in tariffs on a wide array of Chinese imports, including a 25% tariff on lithium-ion non-electric vehicle batteries starting in 2026, and another 25% tariff on battery parts and certain critical minerals starting this year.
Because sodium is so plentiful and cheap, companies in the space estimate that sodium-ion storage systems could eventually be around 40% less expensive than lithium-ion systems, once manufacturing scales. This lower price point could eventually make sodium-ion economically viable for storage applications “up to eight, 10, maybe even 12 hours,” Dales told me.
Sodium-ion also has a leg up on lithium-ion when it comes to safety. While this is an ongoing area of research, so far sodium-ion batteries appear less likely to catch fire, at least in part because of their lower energy density and the fact that their electrolytes generally have a higher flashpoint, the temperature at which the liquid is capable of igniting. This could make them safer to install indoors or pack close together. It’s also possible to discharge sodium-ion batteries down to zero volts, completely eliminating the possibility of battery fires during transit, whereas lithium-ion can’t be completely discharged without ruining the battery. Finally, sodium-ion performs better in the cold than lithium-ion batteries, which notoriously struggle to charge and discharge as efficiently at low temperatures.
“When we saw announcements coming out of China about very large investments in large capacity sodium projects, that was really an eye opener for us,” Dales told me. He and co-founder Landon Mossburg launched Peak Energy last year with $10 million in funding. The company is currently importing sodium-ion cells and assembling battery packs domestically, but by 2027, Dales said he hopes to produce both cells and packs in the U.S., with an eye toward opening a gigafactory and onshoring the entirety of the supply chain.
He’s not alone in this ambition. Natron Energy, another Silicon Valley-based sodium-ion company, has been at this for more than a decade. The startup, founded in 2012, recently opened the first commercial-scale sodium-ion battery manufacturing facility in the U.S. When fully ramped, the plant will have the capacity to produce 600 megawatts of batteries annually, paving the way for future gigawatt-scale facilities.
It cost Natron over $40 million to upgrade the Michigan-based plant, which formerly produced lithium-ion batteries, into a sodium-ion facility, and while the first shipments were expected to begin in June, none have yet been announced. The company’s backers include Khosla Ventures as well as strategic investors such as Chevron, which is interested in using this tech at EV charging stations; United Airlines, which hopes to use it for charging motorized ground equipment; and Nabor Industries, one of the world’s largest oil and gas drilling companies, which is interested in using sodium-ion batteries to power drilling rigs. It also received nearly $20 million from ARPA-E to fund the conversion of the Michigan facility.
Beyond the U.S. and China, France-based sodium-ion cell developer Tiamat is planning to build out a massive 5-gigawatt facility, while Sweden-based Northvolt and UK-based Faradion are also hoping to bring sodium-ion battery manufacturing to the European market.
Sodium-ion isn’t a magic bullet technology, though, and it certainly won’t make sense for all applications. The main reason there hasn’t been much interest up until now is because these batteries are about 30% less energy-dense than their lithium-ion counterparts. That likely doesn’t matter too much for grid-scale or even residential storage systems, where there’s usually enough open land, garage, or exterior wall space to install a sufficiently-sized system. But it is the reason why sodium-ion wasn’t commercialized sooner, as lithium-ion’s space efficiency is better suited to the portable electronics and electric vehicle markets.
“It’s only in the last two years probably, that the stationary storage market has gotten big enough where it alone can drive specific chemistries and the investment required to scale them,” Dales told me.
Catherine Peake, an analyst at Benchmark Mineral Intelligence, also told me that lithium iron phosphate batteries — the specific flavor of lithium-ion that’s generally favored for energy storage systems — usually have a longer cycle life than sodium-ion batteries, meaning they can charge and discharge more times before performance degrades. “That cycle life is actually a pretty key metric for [energy storage system] applications,” she said, though she acknowledged that Natron is an outlier in this regard, as the company claims to have a longer cycle life than standard lithium-ion batteries.
Lithium is also a volatile market. Though prices have bottomed out recently, less than two years ago the world was facing the opposite scenario, as China saw the price for battery-grade lithium carbonate hit an all-time high, Kevin Shang, a senior research analyst at the energy consultancy WoodMackenzie, told me. “So this catalyzed a soaring interest in sodium-ion batteries,” he said.
Although Shang and Peake agree that the U.S. could seize this moment to build a domestic sodium-ion supply chain, both also said that scaling production up to the level of China or other battery giants like South Korea or Japan is a longshot. “After all, they have been doing this battery-related business for over 10 years. They have more experience in scaling up these materials, in scaling up these technologies,” Shang told me.
These countries are home to the world’s largest battery manufacturers, with CATL and BYD in China and LG Energy in South Korea. But Natron and Peak Energy are both startups, lacking the billions that would allow for massive scale-up, at least in the short term.
“It shouldn't be underestimated how hard it is to make anything in large volume,” Matt Stock, a product director at Benchmark, told me.Largely due to the maturity of lithium-ion battery supply chains, the research firm doesn’t see sodium-ion becoming the dominant energy storage tech anytime soon. Rather, by 2030, Benchmark forecasts that sodium-ion batteries will comprise 5% of the battery energy storage market, increasing to over 10% by 2040. BloombergNEF is somewhat more optimistic, predicting sodium-ion will make up 12% of the stationary energy storage market by 2030.
And while storage may be the most obvious near-term use case for sodium-ion batteries, it’s certainly not the only industry that stands to benefit. China is experimenting with using these batteries in two- and three-wheeled vehicles such as electric scooters, bikes, and motorcycles. And as the tech improves, Stock said it’s possible that sodium-ion batteries could become a viable option for longer-range EVs as well.
Ultimately, Dales thinks these batteries will follow a similar technological trajectory to lithium iron phosphate, a chemistry that many in the west thought would never be suitable for use in electric vehicle batteries. “Over time, our view is that sodium-ion will continue to increase its energy density just like [lithium iron phosphate] did,” Dales told me. Now, lithium iron phosphate is the dominant battery chemistry for Chinese-made EVs. “But what actually happened was it was so cheap and they made it better and better and better than now it’s taking over the world. We see this playing out again with sodium-ion.”
Benchmark, on the other hand, is more circumspect regarding sodium-ion’s world dominating potential. Stock said he sees the technology more as a supplement to lithium-ion, which can swoop in when lithium prices boom or critical minerals shortages hit. “When that happens, something like sodium-ion can fill the space. And that’s really where it’s a complementary technology rather than a replacement,” he told me. “If there were other technologies as mature as sodium-ion, we’d also see those being scaled alongside it, but sodium-ion is kind of next in line.”
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Broken sea ice in Baffin Bay, in the Northwest Passage. Alison Cook