Summary of Key Highlights
CATL has been very active recently: on one hand, it signed a sodium-ion energy storage cooperation with Dutch company Alfen, agreeing to deploy 5GWh of sodium-ion systems in Western Europe starting from 2027, expanding its collaboration from lithium-ion batteries to sodium-ion technology; on the other hand, multiple sodium-ion energy storage demonstration projects have been implemented domestically, and it also secured a 3-year, 60GWh order with HiBosChuang. Additionally, CATL's energy storage business is growing rapidly, with revenue exceeding 62.4 billion yuan in 2025, and energy storage accounting for 25% of its sales in the first quarter of 2026. Both domestic and international demand is surging, prompting the company to aggressively expand its sodium-ion production capacity.
Detailed Analysis
1. First overseas customer adopts sodium-ion technology: CATL breaks into the European market
The significance of this cooperation with Alfen lies in the fact that a mainstream overseas client has now considered sodium-ion batteries as a viable option for procurement. Previously, concerns from overseas customers were not about the technical specifications but rather whether the technology could operate stably and safely within the European power grid. By working together on projects, CATL aims to gain local experience in Europe and ensure its products meet the grid's requirements, which will facilitate the global market adoption of sodium-ion batteries. In short, this marks a crucial step for sodium-ion batteries to move from the laboratory to the commercial market.
2. What makes sodium-ion batteries better than lithium-ion ones?
Sodium-ion batteries have several practical advantages over lithium-ion ones:
- Safety: Sodium-ion batteries are less prone to catching fire compared to lithium-ion batteries, making them a safer choice for energy storage applications.
- Resistance to extreme temperatures: They can function normally in cold climates, suitable for colder regions in Europe.
- Cost stability: The abundance of sodium resources means that the cost is less affected by fluctuations in lithium prices.
- Environmental friendliness: They are more sustainable throughout their lifecycle (from production to recycling).
These advantages make sodium-ion batteries particularly competitive in the energy storage sector, especially in applications where cost sensitivity or extreme environmental conditions are a concern.
3. Sodium-ion technology is gaining traction domestically with multiple demonstration projects
Sodium-ion battery technology is no longer just theoretical; actual projects are already in operation:
- The first 100-megawatt-hour-level sodium-ion energy storage station in China is located in Nanning, Guangxi (with the second phase expected to be operational by October 2025).
- The first phase of a 100/200-megawatt-hour sodium-ion project in Honghu City has been successfully approved.
- CATL has also secured a 3-year, 60GWh order with HiBosChuang, which is enough to supply the annual electricity needs of 600,000 households.
These developments indicate that the commercialization of sodium-ion batteries in China is accelerating and is no longer limited to laboratory stages.
4. Energy storage business becomes CATL's second growth driver
CATL's energy storage business has seen rapid growth:
- In 2025, sales of energy storage batteries reached 121GWh, a year-on-year increase of 29%, with revenue at 62.4 billion yuan and a gross profit margin of 26.7% (a high level in the manufacturing industry).
- In the first quarter of 2026, total sales of power and energy storage batteries exceeded 200GWh, with energy storage accounting for 25%, a significant increase from previous years.
The reason for this growth is twofold: domestically, policies (Documents No. 136 and 114) have clarified the role and profit mechanisms of energy storage, making it a profitable investment; internationally, the demand for energy storage is rising due to the need for large amounts of power in AI and data centers to ensure stable supply.
5. Capacity expansion to meet demand
To accommodate the surge in demand, CATL has expanded its sodium-ion production capacity:
- It has increased production at its Fuding base by 40GWh.
- The Jining base in Shandong plans to have a capacity of 160GW (note: this should be a typo as GW is 1,000 times larger than GWh; perhaps it refers to gigawatts). In other words, CATL is preparing for large-scale production to meet the upcoming market demand.
Conclusion
CATL's strategy in the sodium-ion battery sector includes breakthroughs in overseas markets, successful domestic projects, and rapid growth in its energy storage business, along with capacity expansion. Sodium-ion batteries are likely to become the new standard in the energy storage industry. For consumers, this means lower energy storage costs and more stable power supply. In the future, sodium-ion technology could even be used in electric vehicles (although this discussion focuses mainly on energy storage). Overall, the commercialization of sodium-ion batteries is accelerating, and CATL is leading the way.