Huaxi Securities: Sodium batteries are expected to effectively complement lithium batteries in addressing technical limitations

West China Securities points out that sodium batteries have evolved from an earlier stage driven by cost concerns due to high lithium carbonate prices to a phase characterized by technological maturity, a complete industrial chain, and clear application fields. They are expected to serve as an effective supplement to lithium batteries’ technical shortcomings.

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【West China Electric New】Sodium Battery Special Report: Technology Maturity + Clear Application Fields, Sodium Batteries Are Expected to See Volume Growth

(1) Why develop sodium batteries? To effectively address the shortcomings of lithium battery applications

Sodium batteries operate on principles similar to lithium batteries, both being insertion/extraction type batteries. However, structural differences lead to performance variations. Compared to lithium batteries: 1) Sodium batteries have good wide-temperature and low-temperature performance; 2) Sodium resources are abundant; 3) Sodium-ion batteries are safer; 4) Sodium batteries have lower energy density than ternary and lithium iron phosphate batteries; 5) Sodium batteries have limited cycle performance, among other key features.

(2) What has happened as sodium batteries approach volume production?

By reviewing the development history of domestic sodium batteries, we believe that after years of exploring technology and processes, product stability, cost optimization, and application scenarios have become clearer. The industry has shifted from an initial phase driven by cost concerns due to high lithium carbonate prices to a stage of mature technology and clear business models enabling large-scale production. In terms of price, sodium batteries have now reached parity with lithium batteries; in terms of applications, sodium batteries show potential in energy storage, light electric vehicles, start-stop power supplies, electric engineering vehicles, new energy vehicles, AI data centers, and more.

The industry growth and market space for sodium batteries are promising. By 2025, global sodium-ion battery shipments are expected to reach 9 GWh, a 150% year-over-year increase; by 2030, global sodium battery shipments are projected to surpass 1000 GWh, with a compound annual growth rate exceeding 100%.

(3) What should we focus on regarding the scale application of sodium batteries?

With the role of sodium batteries in downstream applications being an effective supplement to lithium battery performance shortcomings, and their prices reaching levels suitable for large-scale application, we expect sodium batteries to begin volume deployment. The main changes and focus points in material components include three aspects: 1) Aluminum foil: potential for increased usage due to inflationary factors. 2) Cathode and anode materials: the most significant changes compared to lithium batteries and core performance indicators. 3) Electrolytes and separators: tailored for sodium batteries, such as replacing lithium salts with sodium salts in electrolytes, and increasing separator porosity.

Investment Recommendations

We believe that sodium batteries, which initially developed due to cost concerns from high lithium carbonate prices, have gradually transitioned into a phase driven by technological maturity, a complete industrial chain, and clear application fields, with the potential to effectively complement lithium batteries’ technical limitations.

Firstly, we are optimistic about the “value inflation” in aluminum foil, benefiting companies like Dingsheng New Materials. Meanwhile, we recommend focusing on: 1) Sodium batteries: overall material performance and direct downstream demand. 2) Cathode and anode materials: core performance and cost optimization. 3) Electrolytes and separators: improving sodium battery performance.

Beneficiary stocks include: CATL, BYD, EVE Energy, Vico Technology, Chuan Yi Technology, Putailai, Rongbai Technology, Tongxing Technology, BTR New Energy Materials, Shengquan Group, Putailai, Tian Cai Materials, Polyfluoro, Enjie, and others.

Risk Tips: Major changes in technical routes; underperformance of new product releases; significant fluctuations in sodium and lithium battery costs and prices; underachievement in capacity expansion; lower-than-expected downstream demand, etc.

(Source: First Financial)