Sodium-ion creates another China dependency
LGES chooses China for its pilot plant
In January 2026, LG Energy Solution announced it would build its sodium-ion pilot plant in Nanjing, China.
The location was not an accident.
LGES chose Nanjing specifically to “leverage China’s robust supply chain, including cathode materials.”
LGES is the world’s third-largest battery manufacturer with 9.3% global market share. It operates gigafactories on three continents and supplies major Western automakers (VW, GM, Tesla…).
But when developing sodium-ion batteries, LGES must build in China.
Korea lacks the infrastructure. Europe lacks it. North America lacks it.
Only China has the cathode suppliers, anode manufacturers, and equipment vendors required to make sodium-ion cells at commercial scale.
Western battery companies have no alternative.
The confession no one noticed
On January 20, 2026, South Korean trade publication ETNews reported LGES’s sodium-ion development plans.
The details matter.
LGES will build its sodium-ion pilot line at its Nanjing factory in China. Not at its Ochang R&D center in Korea, where the company typically develops new technologies.
The development sequence is clear: A-samples will come from the Ochang R&D center, Korea. But B-samples and C-samples will be produced in Nanjing. The target completion is 2026.
The rationale was stated plainly: China has the supply chain. Korea does not.
The Nanjing line is a pilot, not production capacity.
LGES is developing samples for customer qualification. That is development work, not GWh-scale manufacturing.
In November 2025, Sinopec and LG Chem announced joint development of cathode and anode materials for sodium-ion batteries.
The strategic question arrives later.
When customers request commercial volumes, where does LGES build that capacity?
If LGES builds in Korea or Poland, it sources cathodes, anodes, and electrolytes from Chinese suppliers.
The pilot tests commercial viability.
LGES is determining whether the demand for sodium ion justifies committing to either option: build in the West without supply chain support, or build in China and accept structural dependence on Chinese infrastructure.
What China built while lithium was cheap
China constructed a complete sodium-ion supply chain between 2022 and 2025 while lithium prices crashed and Western interest evaporated.
Cathode materials show the clearest evidence.
Rongbai Technology became CATL’s primary sodium-ion cathode supplier with 60% of procurement guaranteed through 2029.
The company completed a 6,000-tonne pilot production line in 2025 to verify new processes and equipment. It plans to achieve 50,000 tonnes of sodium-ion battery production capacity by 2026 through retrofitting and mergers and acquisitions. They are also planning new production lines with a capacity of 50,000 to 100,000 tonnes fully adapted for sodium-ion batteries.
In December 2025, Rongbai received a 3,000-tonne cathode order. The company has developed three distinct technical paths for layered oxide cathodes and has next-generation materials targeting 180 Wh/kg in reserve.
Zhenhua New Materials achieved ton-scale production earlier, with continuous batch production since August 2023.
Zhongna Energy operates a 3,000-tonne facility in Zhenjiang and commissioned a 10,000-tonne facility in Meishan in January 2026. The company leads in polyanionic cathode materials.
The cathode national standard for sodium-ion materials was drafted by Guangdong Bangpu, Ningbo Rongbai, Hubei Wanrun, Honeycomb Energy, and Hunan Zhongwei.
Chinese companies wrote the specifications.
Anode materials followed the same pattern. Beiter New Energy operates a 400 tonne per year facility with 3,000 tonne per year under construction. Zhongke Dianqi also supplies hard carbon anodes.
Electrolyte and separator supply chains exist at scale.
Duofuduo built a 1 GWh cathode pilot facility and produces sodium hexafluorophosphate. Tianci produces sodium salts.
Enjet planned 1.5 billion square meters of separator capacity for 2025.
Geographic concentration reinforces the ecosystem.
The equipment is identical to that of lithium-ion gigafactories. Battery makers can repurpose existing lines.
The capital barrier is manufacturing process knowledge, not hardware.
CATL’s commercial deployment timeline
CATL launched its sodium-ion brand Naxtra in April 2025 and announced large-scale production had begun.
On January 22-23, 2026, CATL unveiled the Tianxing Gen 2 Light Commercial Low-Temperature Edition.
The battery became the first globally to pass GB 38031-2025 certification, China’s national standard for EV traction batteries. The standard takes effect mid-2026 and sets requirements for thermal stability, mechanical impact resistance, and fast-charge cycling.
Mass production will start in July 2026 for JAC, but passenger vehicle deployment is planned for Q2 2026, with initial models from GAC Aion.
CATL CTO Gao Huan stated: “Sodium scaling in certain domains to replace lithium is the starting point for entire energy market restructuring.”
Industry production data shows the scale.
In 2025, China produced 3-4 GWh of sodium-ion batteries. The shipments reached 9 GWh, up 150%.
The sodium-ion battery market is very small compared to the lithium-ion battery (+2200 GWh shipment in 2025, source EV Tank).
Most of the supply has been towards the BESS market.
Multiple operational projects are running. For example, the first 20 MW/40 MWh sodium system was integrated into a 200 MW/400 MWh hybrid BESS.
At CATL’s December 2025 supplier conference, executives stated sodium-ion and lithium-ion technologies would develop in parallel, describing this as a “dual-star trend” with broader deployment in 2026.
The timing aligns with lithium price movements.
On January 26, lithium carbonate was quoted at CNY 181,500/t ($26,000/t). That’s up 130% year-over-year. Since September alone, spot prices have risen 73%.
CATL explicitly stated at its supplier conference that it was accelerating sodium-ion to “reduce lithium reliance amid volatile pricing.”
China built sodium-ion capacity during the 2022-2024 lithium crash.
It is deploying as lithium rebounds.
The Western position is nonexistent
No Western company operates GWh-scale sodium-ion production.
No European manufacturer has operational sodium-ion capacity. No North American manufacturer has operational capacity.
Natron Energy, a U.S. sodium-ion startup using Prussian blue chemistry, had the ambition to produce sodium-ion batteries itself in the U.S.
In August 2025, the company informed Michigan officials it would permanently close its facilities in Holland, Michigan, and Santa Clara, California, on September 3rd.
The planned $1.4 billion, 24 GWh factory in Rocky Mount, North Carolina, was cancelled.
Natron had $25 million worth of orders secured for its Michigan factory, but could not deliver them until obtaining UL certification.
The certification delays prevented fulfillment.
In June 2025, The Information reported that investors had frozen scheduled payments. On August 27, 2025, Natron’s board of directors determined fundraising efforts were unsuccessful.
The company ceased operations.
The Western supply chain for sodium-ion is nonexistent at every level.
No Western company has announced a path to GWh-scale sodium-ion production with committed timelines and supply agreements.
LGES building in Nanjing is an explicit acknowledgment that Korea lacks the infrastructure to develop sodium-ion domestically.
Why sodium-ion breaks European battery strategy
European battery policy is built on circularity.
The EU Battery Regulation mandates collection targets, recycling efficiency minimums, and minimum recycled content in new batteries by 2031.
The business model assumes recovered materials hold economic value.
Lithium-ion recycling works when metal prices justify the cost. Cobalt trades around $52,000-56,000 per tonne, at the moment. Nickel around $16,000-17,000 per tonne.
High-nickel NMC batteries contain enough valuable material to cover recycling expenses. Companies like Glencore and Umicore built their battery recycling strategies around cobalt and nickel recovery.
LFP already strains that model.
LFP contains no cobalt and minimal nickel. The recoverable value is lithium, iron, and phosphate. European recyclers are struggling to make LFP recycling profitable. The margin exists only when lithium prices are elevated.
Sodium-ion eliminates even lithium’s value.
Sodium is the sixth most abundant element on Earth. It trades at a fraction of lithium’s price.
There is no scarcity premium.
A sodium-ion battery contains sodium, manganese or iron for the cathode, and hard carbon for the anode.
All are commodity materials with low unit value. The economic case for recycling sodium-ion batteries does not exist at current material prices.
Europe requires recycling to be commercially viable.
The EU Battery Regulation imposes mandatory collection and recycling rates but provides no mechanism to fund recycling when material values cannot cover costs.
If sodium-ion scales in Europe, regulators face three options:
Subsidize sodium-ion recycling indefinitely as a public service
Exempt sodium-ion from circular economy requirements
Accept that end-of-life sodium-ion batteries cannot be recycled economically and must be exported.
None of these options aligns with the EU’s stated circular economy goals.
European policy has not yet tested whether sodium-ion is compatible with mandatory recycling requirements.
Why chemistry doesn’t break dependency
Energy density improvements do not solve execution gaps.
CATL achieving 175 Wh/kg with sodium-ion opens new applications. The chemistry can now serve passenger vehicles with 500 km range instead of just storage and low-speed vehicles.
That milestone matters for market size. It does not change manufacturing reality.
Western battery companies failed to build competitive lithium-ion manufacturing despite 15+ years of development time.
The problem was never that lithium-ion technology was unavailable.
The problem was building gigafactories that achieve high yield at scale while managing complex supply chains.
Northvolt reached 90% yield at Ett before halting production, but ran out of cash. ACC paused two factories. Freyr scrapped Norway plans.
Yield, supply chain coordination, and process discipline determined outcomes.
Chemistry choice did not.
Sodium-ion presents identical execution requirements.
The cells must be manufactured in gigafactories using the same equipment types as lithium-ion. Quality control, process optimization, and supplier relationships matter just as much.
The gap is not energy density. The gap is not raw material access. Sodium is abundant everywhere.
The gap is the ability to manufacture batteries at gigawatt-hour scale with high yield and coordinated supply chains.
That gap existed in lithium-ion. It exists in sodium-ion. Chemistry changes do not close execution gaps.
The dependency question remains open
LGES’s Nanjing pilot is development work. Sample production for customer qualification. That does not lock LGES into China permanently.
The strategic question arises when customers request commercial volumes.
Where does LGES build GWh-scale capacity?
Build in Korea, Poland or the U.S, and LGES sources materials from China.
Build in China, and LGES operates as a “Chinese manufacturer” with Korean ownership.
But the deeper problem is demand.
Sodium-ion solves a narrow problem: cost and cold performance (where LFP underperforms). Applications where temperature extremes matter and cost pressure is strong.
More critically, sodium-ion creates a circular-economy problem that no Western government has addressed.
European recyclers already struggle with LFP’s low residual value.
Sodium-ion has even less.
If the EU Battery Regulation requires recycling but sodium-ion recycling has no business case, the policy and the chemistry are incompatible.
China can deploy sodium-ion because it built the supply chain and accepts recycling as subsidized infrastructure.
Europe demands that recycling be economically self-sustaining while also mandating it by law.
LGES has not committed to commercial-scale sodium-ion production in China.
The pilot tests whether demand materializes. Whether customers actually need this chemistry at volume.
If that demand arrives, no good path exists.
Not for manufacturing location. Not for end-of-life management.
The chemistry dependency is real.
The commercial case for Western sodium-ion deployment remains unclear.
If you find this kind of analysis useful, you may also be interested in two standalone resources I’ve built alongside the newsletter.
Fascinating structural analysis. The recycling economics problem you outline is probly the most underappreciated barrier sodium-ion faces longterm. Europe's regulatory framework assumes material scarcity creates recycling incentives, but with abundant sodium that entire circularity model collapses. I've seen similar misalignment in rare earth policy where abundence assumptions broke existing frameworks.
China is indeed putting more effort into making sodium-ion viable than anything we’ve seen in the West and there is a possibility we are heading into a future where sodium supply chains end up as dependent on China as are the lithium ones.
What do you then make out of it all? What do you think is the future of the battery industry in the West in the next five years?