Sodium-Ion VS Solid-State Batteries Who Will Replace Lithium-Ion

The rise of renewable energy (RE) and the rapid growth of electric vehicles have raised expectations for the energy storage industry - including higher efficiency, greater safety, increased energy density, and ideally, lower costs. Sodium-ion and solid-state batteries aim to offer alternative solutions. Each has its own advantages and could potentially replace existing lithium-ion storage technologies in the coming years.

In this article, we explore why lithium-ion batteries may be at risk of being phased out - even if that risk still seems minimal today. We focus on two emerging technologies with the strongest potential to dominate the future of energy storage: sodium-ion batteries and solid-state batteries.

Lithium-ion batteries currently dominate the energy storage sector and are expected to maintain this position in the medium term. From portable devices to large-scale renewable energy + storage projects, lithium-ion technology is leading the way across all major trends.

According to a recent report, the lithium-ion battery materials market is rapidly expanding due to growing demand across multiple industries. It is projected to grow from USD 41.9 billion in 2024 to over USD 120 billion by 2029, with a compound annual growth rate (CAGR) of approximately 23.6%.

Today, the lithium-ion battery market is led by major players such as Tesla, Panasonic, LG Chem, CATL, and BYD. Notably, the latter two Chinese companies have made significant progress over the past two years.

While the rise of electric vehicles is a major driver of this growth, the stationary energy storage market is expected to generate even greater demand in the years ahead.

It is well known that lithium-ion batteries rely heavily on critical minerals such as lithium, and often also cobalt and nickel. Supply constraints have led to significant price volatility. For example, the cost of battery-grade lithium carbonate has fluctuated from around USD 5.8 per kilogram to as high as USD 80 in recent years. This volatility and scarcity have driven up the cost of lithium-ion batteries and pose a long-term supply risk.

One urgent issue is the lack of a robust lithium supply chain in major markets outside of China. For instance, around 77% of the graphite used in lithium-ion batteries is sourced from China. This highlights the heavy dependence on Chinese supply in an era of global trade tensions and underlines the importance of supply diversification.

Safety risks, such as battery fires in electric vehicles caused by thermal runaway, add another layer of concern.

These factors are paving the way for a new generation of energy storage technologies. While companies outside of China are actively seeking alternatives that do not rely on lithium, Chinese market leaders are also aware that their dominance could be at risk. In fact, many of them have already moved quickly into sodium-ion and solid-state battery development to ensure they stay ahead of the curve.

Solid-state batteries (SSBs) replace the liquid electrolytes used in lithium-ion batteries with solid electrolytes - such as ceramics, glass, or solid polymers. By eliminating the bulky graphite anode and using dense solid materials, SSBs can store significantly more energy in the same volume, potentially extending the range of electric vehicles (EVs) by a wide margin.

Several key industry players have already recognized the transformative potential of this technology. For example, in 2024, QuantumScape unveiled its prototype solid-state battery (QSE-5) with an energy density of 844 Wh/L - substantially higher than the 300–700 Wh/L typical of commercial lithium-ion batteries. The company plans to deliver its first commercial 100+ layer cells (QSE-5) in 2025. This energy density is roughly 1.5 times that of the best lithium-ion cells, which could translate into a 20–50% increase in driving range without increasing battery size or weight.

China's battery giant, CATL (Contemporary Amperex Technology Co. Ltd.), has also significantly increased its investment in SSB development, expanding its dedicated R&D team to over 1,000 people. CATL is targeting small-scale production of all-solid-state batteries by 2027.

Toyota has announced a commercialization timeline for passenger EVs equipped with solid-state batteries between 2027 and 2028. The company claims this innovation could boost driving range by up to 20%. In 2023, Solid Power supplied BMW with A-sample cells for use in its demo vehicle program. Other major industry leaders - including Volkswagen, Hyundai, Nissan, BMW, and Toyota - have also made strategic investments in the solid-state battery space.

Beyond increased range, solid-state batteries also demonstrate superior fast-charging capabilities. Thanks to excellent thermal stability and ionic conductivity, SSBs can support ultra-fast charging rates without damaging the cells. Toyota, for example, expects its solid-state battery technology to enable a 300 km range recharge in just 15 minutes - two to three times faster than the current fast-charging speeds of most lithium-ion EVs, which typically take about 30 minutes to charge from 10% to 80%.

The use of solid electrolytes, which are non-flammable, eliminates one of the key safety risks of traditional battery cells. Solid ceramic or glass electrolytes do not catch fire and can operate across a wider temperature range. They also remain stable at higher voltages, enabling the use of high-capacity cathode materials and suppressing lithium dendrite growth - thus improving both cycle life and safety.

Additionally, SSBs may be easier to recycle due to their simpler design - without the need for complex solvent and binder mixtures - and avoid the use of problematic additives and adhesives.

With so many advantages, one might assume that solid-state batteries would easily and quickly replace lithium-ion batteries. However, if not for their high cost, SSBs might have already taken over.

Cost remains the most significant barrier to widespread adoption. BMW Group, for instance, has acknowledged this challenge. While the company is expected to unveil a prototype vehicle equipped with solid-state batteries later this year, it has stated that a commercial launch of SSB-powered electric vehicles is unlikely within the next decade.

Chinese battery manufacturer Sunwoda has estimated that solid-state batteries could cost around $275 per kWh, roughly on par with semi-solid-state batteries. However, due to high material processing costs and low manufacturing yields, the actual cost could be significantly higher in practice.

Until these challenges are addressed - particularly in scaling up production and reducing material costs - solid-state batteries are likely to remain in the early-stage or premium segment of the market, rather than achieving widespread commercial deployment.

In comparison, as of December 2024, the average price of lithium-ion battery packs in China had dropped to $94 per kWh. Prices in the U.S. and Europe remain 30% to 50% higher, but still significantly lower than those of solid-state batteries.

As such, cost remains a major bottleneck that proponents of solid-state battery technology must overcome in order to truly disrupt the energy storage market. In this regard, sodium-ion and lithium-ion batteries are far ahead of solid-state batteries.

Other critical challenges include scaling up production, particularly in the mass manufacturing of ceramic electrolytes and the reliable assembly of solid-state cells. Managing the interface between solid electrolytes and electrodes is also a concern, as it can result in high interfacial resistance or cracking over multiple charge-discharge cycles - both of which hinder full-scale commercialization.

Moreover, ensuring durability under real-world stress conditions, such as vibration, temperature fluctuations, and fast charging, remains one of the most pressing technical hurdles.

Solid-state batteries improve upon lithium-ion technology by changing the electrolyte and increasing energy density, but their high cost remains a major challenge. In contrast, sodium-ion (Na-ion) batteries face the opposite issue. By attempting to replace the elements used in lithium-ion batteries with more common materials, the cost of sodium-ion batteries could significantly drop, but they face challenges in terms of energy density.

Sodium-ion batteries operate in much the same way as lithium-ion batteries - ions shuttle between the cathode and anode - but they use sodium ions instead of lithium ions. This shift changes everything, from the ease of raw material sourcing to the affordability - which is one of the key factors that will determine the future mainstream battery technology.

The low cost of sodium-ion batteries means that by 2030, they will account for less than 10% of electric vehicle batteries, but their share in energy storage applications is expected to increase significantly. Sodium-ion batteries use cheaper materials and do not require lithium, which means their production costs could be 30% lower than that of lithium iron phosphate (LFP) batteries.

The biggest appeal of sodium-ion technology lies in its ability to leverage abundant and cheap materials to replace more scarce ones. Sodium reserves in the Earth's crust are 1,000 times greater than those of lithium. Sodium can even be extracted cheaply from relatively inexhaustible seawater.

Thanks to innovations in the field, commercial-grade sodium-ion (Na-ion) batteries have now achieved an energy density of around 130-160 Wh/kg, which is about two-thirds that of typical lithium-ion NMC (nickel manganese cobalt) batteries. However, they have already reached or even surpassed the energy density of lead-acid batteries, and are approaching that of lithium iron phosphate (LFP) batteries.

Experts claim that the next generation of sodium-ion batteries will achieve over 200 Wh/kg, potentially surpassing the theoretical energy density limit of LFP batteries. The typical lifespan of sodium-ion batteries ranges from 100 to 1,000 cycles, and Indian developer KPIT claims its batteries maintain 80% capacity retention after 6,000 cycles, comparable to lithium-ion battery performance.

Sodium-ion batteries also excel in power and low-temperature performance. Some designs are capable of around 1 kW/kg power density, which far exceeds that of lithium-ion NMC or LFP batteries. Additionally, sodium-ion batteries exhibit minimal performance degradation at temperatures as low as -20°C, whereas lithium-ion batteries struggle to maintain charge or efficiently charge quickly in such cold conditions.

Sodium-ion batteries can also be fully discharged to 0V without causing damage, making them extremely safe for transport and storage. Due to the lower heat generation and the use of non-flammable materials in many designs, sodium-ion batteries also demonstrate superior thermal stability. In fact, the fire risk of sodium-ion battery packs is expected to be significantly lower than that of lithium-ion battery packs, enhancing safety in applications such as electric vehicles and grid storage.

These features make sodium-ion batteries an attractive option, even for lithium-ion battery leaders in China. Last year, China's first large-scale sodium-ion battery energy storage station began operations - a 10 MWh sodium-ion battery storage facility, part of a 100 MWh project. This facility, built by China Southern Power Grid, uses 210 Ah sodium-ion cells and has some impressive data: the battery can be charged to 90% in just 12 minutes.

Global battery manufacturing giant Contemporary Amperex Technology Co. Limited (CATL) is clearly eager to explore the potential of sodium-ion batteries. For instance, it is integrating sodium-ion batteries into its lithium-ion battery infrastructure and products. The company revealed that in 2023, Chinese automaker Chery became the first company to use CATL's sodium-ion batteries.

In January 2024, the largest automaker in Central Asia and one of the biggest battery suppliers, BYD, announced plans to build a $1.4 billion sodium-ion battery factory with an annual production capacity of 30 GWh.

European companies are also exploring this technology. The now-bankrupt battery manufacturer Northvolt launched a 160 Wh/kg sodium-ion battery in November 2023, which was verified for performance. In the UK, Faradion has been a pioneer in sodium-ion battery technology for over a decade. Acquired by India's Reliance Industries in 2021, Faradion developed a 160 Wh/kg battery and is now rolling out an improved version that boasts 20% higher energy density and 30% longer cycle life. Reliance Industries has also announced plans to build a multi-GWh sodium-ion battery factory in India, with production likely to begin in 2025.

These developments strongly indicate that sodium-ion batteries are set to become a technology capable of challenging the dominance of lithium-ion batteries.

While emerging battery technologies - sodium-ion batteries and solid-state batteries - show promising potential, it is difficult to predict which will ultimately dominate. Given their respective advantages, both technologies may play crucial roles in advancing clean energy and clean transportation in the future.

If solid-state battery costs decrease - potentially dropping from the current $150+/kWh for lithium-ion batteries to around $80-$100/kWh - solid-state batteries could dominate the high-performance segments, such as electric vehicles, within the next decade. This is a plausible scenario. The International Energy Agency (IEA) holds an optimistic view on the costs of solid-state batteries post-2030, highlighting that solid-state technology is likely to achieve commercial viability.

On the other hand, sodium-ion batteries are more cost-competitive, making them well-suited for grid storage and emerging markets, and they are expected to achieve success more quickly. Many supporters are pushing for the construction of large-scale projects in the next two to three years. In 2024, the battery energy storage system (BESS) market grew by 44%, with installed capacity and discharge amount reaching 69 GW/161 GWh. Notably, by 2030, batteries are expected to drive 90% of storage growth to meet net-zero targets.

As a result, a range of battery technologies will emerge in the future, with solid-state and sodium-ion batteries likely to lead the way.