China Securities Co., Ltd.: No worries about the increase in sodium battery prices next year, and the lithium carbonate price increase expectations accelerating process.

China Securities Co., Ltd. released a research report stating that by 2026, the expected increase in lithium carbonate prices will be realized, and the economic advantages of sodium batteries will gradually become apparent. It is expected that by the end of 2026, leading sodium battery manufacturers will have the opportunity to achieve price parity with lithium, and by 2027, sodium batteries will enter a period of mass production at parity. Large-scale energy storage will be the main battlefield for the commercialization of sodium batteries, with overseas owners willing to pay a safety premium, and overseas energy storage stations will be the first to enter production. Mid-term sodium batteries will gain a foothold in the power sector with advantages such as low-temperature performance and safety. It is expected that the market demand for sodium batteries will reach 500GWh by 2030. Focus on the opportunities for industrial production and mass production of sodium batteries, with priority in the layout of battery and aluminum foil segments. The expected increase in lithium carbonate prices combined with the cost reduction of sodium batteries will see sodium batteries enter a period of mass production at parity by 2027. Currently, the cost of lithium iron phosphate battery cells is approximately 0.38 yuan/Wh. If by 2026, the price of lithium carbonate rises to 200,000 yuan/ton and the price of copper rises to 110,000 yuan/ton, the total cost of lithium iron phosphate battery cells will reach 0.42 yuan/Wh. The cost of battery cells for leading sodium battery manufacturers is around 0.47 yuan/Wh. China Securities Co., Ltd. predicts that by the end of 2026, leading manufacturers will be able to achieve cost parity with lithium iron batteries through the layered oxygen solution for sodium ion battery cells, with cost reduction mainly coming from: 1. The scale production of materials will bring down the cost of sodium battery cells by 6-7 points/Wh. 2. Yield improvement will bring about 1-2 points/Wh of cost reduction. 3. Increased capacity utilization will bring down the costs of depreciation, labor, and energy consumption by 3 points/1 point/0.5 points respectively, resulting in a total manufacturing cost reduction of 4 points/Wh. Even considering that the pack segment may be 1-2 points/Wh more expensive, China Securities Co., Ltd. predicts that by 2026, the cost of battery cells for leading sodium battery manufacturers will be on par with lithium batteries, and by 2027 will begin a period of mass production at parity. In the short term, large-scale energy storage will be the main battlefield, with penetration into the power sector in the mid-term. Overseas energy storage station owners have relatively low price sensitivity and are willing to pay a premium for safety, thus they will be the first to enter production. In the medium term, sodium batteries are expected to gain market share in the power sector due to cost, low-temperature performance, and safety advantages. Sodium ion batteries have clear advantages in low-temperature performance, safety, and rate capabilities, making them suitable for energy storage in high-altitude regions and winter electric vehicles, among other scenarios. Sodium batteries use abundant crustal sodium salt resources that are completely self-sufficient in China, avoiding the geopolitical dependence and price volatility risks associated with lithium resources highly concentrated in South America and Australia, thus achieving an autonomous and controllable supply chain. China Securities Co., Ltd. predicts that the market size of sodium batteries will reach close to 500GWh by 2030, with energy storage demand at 323GWh, power demand at 152GWh, and other markets such as start-stop batteries and two-wheeled vehicles at 16GWh. The structure of sodium batteries is similar to that of lithium batteries, with most materials being compatible with lithium batteries, while there are significant changes in the cathode/anode/aluminum foil segments. Compared to lithium batteries, the current collector and cathode costs of sodium batteries are lower, but the costs of the anode and electrolyte segments are higher. 1. Cathode: The mainstream routes for sodium cathodes are layered oxides and polyanions, with the layered oxide route having high energy density suitable for power applications, and the polyanion route having a high cycle life suitable for energy storage applications. 2. Anode: The main route for sodium anodes is biomass-based hard carbon, with raw materials including coconut shells, starch, straw, etc. The biggest advantage lies in mature technology and low cost, but the inconsistency of raw materials and the difficulty in impurity control lead to insufficient stability of product batches. 3. Electrolyte: Sodium salt is used with sodium hexafluorophosphate, with a solute/additive system compatible with lithium batteries. 4. Separator: Compatible with the lithium battery system. 5. Current collector: Both the positive and negative electrodes of sodium batteries can use aluminum foil, with a significant increase in the amount of aluminum foil used. By 2027, sodium batteries will enter a period of mass production at parity, with the expected increase in lithium carbonate prices accelerating the process of mass production of sodium batteries. It is recommended to pay attention to the opportunities for industrial production and mass production of sodium batteries, with priority given to the battery and aluminum foil segments.