Sodium-ion battery costs approach lithium-ion levels; solid-state battery progress remains steady

Overview

This report summarizes UBS analysts’ findings from the 2026 China International Battery Fair (CIBF), covering technological and commercial developments in sodium-ion and solid-state batteries, along with operational updates from five covered companies: Kedali, Putailai, ENJIE Shares, Nuode Shares, and EVE Energy. Key conclusions indicate that rising lithium prices have made sodium-ion batteries a focal point at the exhibition, with cost parity nearly achieved. Solid-state battery progress is proceeding as expected but lacks the breakthrough excitement seen last year. While most companies reported positive fundamentals, capacity expansion in the separator segment has prompted renewed scrutiny of industry supply discipline.

Core views

Sodium-ion Batteries: Cost Advantage Emerging, Volume Ramp-Up Imminent Sodium-ion batteries were the most discussed topic at this year’s fair, primarily driven by the rebound in lithium carbonate prices, which has heightened uncertainty around China’s 2027 energy storage demand. Experts noted current sodium battery prices at approximately RMB 0.45–0.50/Wh—roughly equal to lithium-ion batteries priced at ~RMB 0.50/Wh (assuming lithium carbonate at ~RMB 80,000/ton). With economies of scale, sodium battery installations are expected to triple to ~10 GWh in 2026 and reach 30–50 GWh in 2027, driving costs down to ~RMB 0.35/Wh. However, HiNa Battery (Chinese Academy of Sciences’ spin-off) cautioned that if biomass-derived hard carbon cannot be supplied cost-effectively at the 100 GWh scale, theoretical sodium battery costs may settle around RMB 0.30/Wh—slightly higher than previously anticipated. Solid-State Batteries: Steady Progress, No Major Surprises Compared to the breakthroughs in dry-electrode technology and accelerated commercialization highlighted at CIBF 2025, this year’s solid-state battery developments appear “methodical” rather than “exciting.” Tsingyan (which holds >90% market share in dry-electrode equipment) confirmed signing letters of intent for mass production lines but has yet to convert them into actual orders. An NECI expert noted that Letone’s isostatic pressing equipment—a critical incremental step in solid-state battery manufacturing—has received positive feedback from cell makers. Factorial emphasized that all-solid-state batteries still face limitations from high operating pressure (at least 1 MPa), which constrains pack-level energy density, though the industry is working to reduce pressure below 1 MPa. Company Updates: Generally Positive, Separator Capex Under Scrutiny Feedback from the five covered companies was broadly positive. Kedali guided Q2 2026 capacity utilization up from 80% in Q1 to 85%, with revenue growth exceeding 35% YoY; its structural components have received Production Part Approval Process (PPAP) certification from a leading U.S. OEM. Putailai indicated upside potential in coating volume (guidance: 15 billion sqm) and equipment orders (RMB 5 billion). Nuode maintained its sales target of 130,000 tons and expects composite current collector shipments to ramp from 100 tons in Q1 to 200 tons in Q2, though HVLP3/4 foils remain under customer qualification. EVE Energy reaffirmed its 2026 full-year production target of 200 GWh (split evenly between EVs and energy storage) and confirmed a 13 GWh large-format cylindrical cell supply agreement with BMW. Notably, ENJIE expects Q2 2026 wet-process separator shipments to exceed 3.8–4.0 billion sqm (up over 10% QoQ), but its newly announced phased capacity expansion has made the market cautious about recent aggressive announcements, potentially challenging the prior thesis of improving supply discipline.

Analysis framework

UBS employed a combined methodology of 'exhibition research + expert interviews + company validation.' First, participation in CIBF—an industry bellwether—allowed capture of shifting market sentiment and technology maturity for emerging solutions (e.g., sodium-ion, solid-state). Second, insights from industry experts (e.g., GGII, NECI) were used to cross-validate commercialization bottlenecks (e.g., hard carbon costs for sodium-ion, pressure constraints for solid-state). Finally, direct engagement with covered companies provided updated data on capacity utilization, order books, and capex guidance, enabling translation of macro technology trends into micro-level fundamental assessments. This approach emphasizes validating the transmission from 'technology concept' to 'commercial execution.'

Methodology notes

• Industry/Industrial Analysis FrameworkSupply-demand framework

  Supply-Demand Balance and Supply Discipline

  The report assesses whether separator industry capacity expansions align with demand to evaluate potential oversupply, thereby judging pricing pressure and sustainability of profitability—core logic in cyclical manufacturing analysis.

• Industry/Industrial Analysis Framework

  Technology Maturity and Commercialization Inflection Point Analysis

  By comparing annual exhibition tech highlights (e.g., dry-electrode last year vs. sodium-ion this year), the report evaluates the progression of new technologies from 'lab breakthrough' to 'mass production,' identifying early signals of accelerating industry penetration.

• Industry/Industrial Analysis FrameworkCost curve analysis

  Scale-Driven Cost Reduction

  The report notes sodium battery costs will decline from RMB 0.45–0.50/Wh to ~RMB 0.35/Wh, primarily driven by installation scale increasing from 10 GWh to 30–50 GWh—demonstrating how production ramp-up in manufacturing reduces per-unit fixed costs.

Asset mapping & comparison

Structured mapping from thesis to named assets (strengths, weaknesses, peers, risks).

• Kedali (002850.SZ)

  Beneficiary

  Strengths

  Capacity utilization rising to 85%; PPAP certification from a leading U.S. OEM; strong revenue growth

  Comparison

  Globally competitive in structural components with optimized customer mix

  Risks

  Raw material price volatility

• Putailai (603659.SH)

  Beneficiary

  Strengths

  Upside potential in coating volume and equipment orders; integrated business layout

  Risks

  Intensifying industry competition

• ENJIE Shares (002812.SZ)

  Neutral-to-Cautious

  Strengths

  Wet-process separator leader; shipment volumes growing QoQ

  Weaknesses

  New capacity expansions raise oversupply concerns

  Comparison

  Faces greater supply discipline challenges than other material segments

  Risks

  Oversupply leading to price wars

• EVE Energy (300014.SZ)

  Beneficiary

  Strengths

  Secured major BMW order for large-format cylindrical cells; clear capacity roadmap

  Comparison

  Leader in large-format cylindrical cell technology

  Risks

  Downstream demand falling short of expectations

• Nuode Shares (600110.SH)

  Neutral

  Strengths

  Rapid ramp-up in composite current collector shipments

  Weaknesses

  HVLP foils still under customer qualification; earnings volatility

  Risks

  Failure or delay in new technology certification

Key data

• Current Sodium Battery PriceRMB 0.45–0.50/WhOn par with lithium-ion batteries when lithium carbonate is ~RMB 80,000/ton
• Expected Sodium Battery Production in 202730–50 GWhExpected to be ~10 GWh in 2026
• Expected Sodium Battery Cost~RMB 0.35/WhDriven by scale effects; could be RMB 0.30/Wh if hard carbon costs remain high
• Kedali Q2 2026 Capacity Utilization Guidance85%Up from 80% in Q1 2026
• EVE Energy 2026 Production Target200 GWhSplit equally between EVs and energy storage
• ENJIE Q2 2026 Wet-Process Separator Shipment Guidance3.8–4.0 Billion SqmQoQ increase >10%

Impact & implications

The report suggests sodium-ion batteries’ approaching cost parity gives them strong substitution potential in energy storage and low-speed vehicles, especially given lithium price volatility and their more secure supply chain. While solid-state batteries show no disruptive breakthroughs, equipment LOIs confirm a clear industrialization path—albeit at a slower pace. At the company level, structural component and anode material suppliers enjoy high order visibility, whereas the separator sector requires close monitoring of new capacity impacts on pricing. Erosion of supply discipline could become a near-term headwind for stock performance.

Risks

• Commodity price and foreign exchange rate volatility
• Changes in government EV regulations and global climate policies
• Excessive capacity expansion in the separator industry leading to oversupply
• Hard carbon raw material cost reductions for sodium batteries falling short of expectations
• Slow progress in overcoming high-pressure operation bottlenecks in solid-state batteries

What to watch

• Actual sodium-ion battery installations and cost reduction trajectory in 2026–2027
• Conversion of solid-state battery production line LOIs into actual revenue
• Pace of new separator capacity deployment and its impact on market prices
• Formal order confirmation from Kedali’s U.S. OEM client following PPAP
• Delivery schedule of EVE Energy’s large-format cylindrical cells to BMW