Western companies are falling behind China in the race to develop sodium-ion batteries, a new technology using sodium salts dissolved in water to rival lithium-ion batteries. Experts say China already dominates sodium-ion battery cell production, with Chinese carmaker Changan set to launch the world's first mass-produced electric vehicle powered by CATL sodium-ion batteries this month. China's capacity has far outstripped global demand as it seeks to maintain its position as the worldwide leader in battery manufacturing and design.

"The West has missed the boat" on sodium-ion development, said Max Reid, head of battery costs at CRU Group, noting that scaling up requires "$100mn worth of investment per plant" with minimal activity outside China. European and US startups had hoped to leapfrog Chinese rivals using sodium-ion batteries, which can be made from abundant materials like seawater, unlike lithium batteries that rely on metals such as graphite and cobalt, both dominated by China.

Chinese companies including CATL and BYD have received tax breaks while several Western battery startups have folded. Natron Energy in California and Stanford spinout Bedrock Materials both collapsed last year. While companies like GM and France's Tiamat Energy have invested in sodium-ion technology, with Moll Batterien building a German factory scheduled to begin production next year, they remain dwarfed by China. CRU data shows China operates or plans over 400 gigawatt hours of sodium-ion gigafactory capacity compared to just 11 elsewhere. China also dominated sodium-ion patent activity in 2025, with CATL as the most active applicant. Major economies must decide whether to remain reliant on batteries from potential adversaries, according to Christer Bergquist of Altris.