UBS Sodium-ion Battery Day: Both LiFun Tech and HiNa Battery Point to a 2026 Commercialization Inflection Point

Overview

UBS invited the management teams of LiFun New Energy and HiNa Battery Technology to participate in its virtual Sodium-ion Battery Day. The report focuses on the commercialization timeline, technology pathways, cost parity, application scenarios, and supply chain bottlenecks of China’s sodium-ion battery industry. Both companies believe 2026 may be the true commercialization inflection point for the industry, with shipments expected to shift from being mainly pilot and demonstration-based in 2025 to GWh-scale deployment.

Core views

The report’s core views are: first, sodium-ion batteries have the most prominent commercial potential in energy storage, and could replace about 50% of energy storage demand in the long term, with penetration possibly rising to 70%-80% in extreme-temperature, indoor, and high-rate scenarios; second, the polyanion cathode route is becoming the mainstream choice for large-scale energy storage; third, cost parity between sodium batteries and LFP is approaching but has not yet been achieved, with sodium batteries currently at about Rmb 0.5/Wh versus LFP at about Rmb 0.4/Wh; fourth, hard carbon anodes are a more prominent supply chain bottleneck than cathodes; and fifth, overseas energy storage customers may become the first wave of adopters because they place greater emphasis on lifecycle total cost of ownership and safety.

Analysis framework

The report is based on management interviews with two leading unlisted Chinese sodium-ion battery companies, combined with company profiles, technology validation, capacity and financing progress, application scenario breakdowns, comparable competitors, and industry risk disclosures to assess commercialization progress. The focus of the analysis is not traditional financial forecasting, but rather technology pathways, cost curves, application fit, customer acceptance, and supply chain scalability.

Methodology notes

• Industry commercialization assessmentTechnology pathway + cost parity + application scenario TAM

  Sodium-ion battery commercialization inflection point

  The report evaluates the feasibility of a 2026 commercialization inflection point by assessing whether shipment scale can move from pilot demonstrations to the GWh level, whether costs are approaching LFP, and whether energy storage and backup power scenarios have advantages in safety and TCO.

• Valuation methodologyP/Sales

  Common industry valuation method

  The company profile section indicates that P/Sales can be used as a valuation method for this segment, but the report does not disclose the latest valuation data for LiFun or HiNa.

Asset mapping & comparison

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

• Li-Fun Technology Corporation Limited

  Core unlisted company profile; one of China’s leading sodium-ion battery cell makers

  Strengths

  Began R&D in 2016, holds about 100 patents, and has capabilities in R&D, pilot production, large-scale manufacturing, and system integration; it has an industrialization foundation in high-temperature cycling, safety validation, customer resources, and mass production at its 3GWh base.

  Weaknesses

  Sodium battery costs have not yet reached parity with LFP; the company’s latest valuation has not been disclosed; commercialization still depends on demand ramp-up in 2026 and validation from energy storage customers.

  Comparison

  Compared with pure material suppliers and early-stage startups, LiFun emphasizes mature industrialization, diversified application scenarios, and stable customer resources.

  Risks

  Declining lithium prices could weaken the cost advantage of sodium batteries; energy storage order ramp-up may fall short of expectations; shifts in technology pathways or hard carbon supply chain constraints may affect mass production.

• HiNa Battery Technology Co., Ltd

  Core unlisted company profile; one of China’s earliest sodium-ion battery companies

  Strengths

  Originates from the Institute of Physics, Chinese Academy of Sciences, with foundational IP spanning cathodes, anodes, electrolytes, and cell assembly; it already has cylindrical and prismatic products, with customers covering the power grid, telecommunications, small-mobility, automakers, and European energy storage integrators; it has announced a safety breakthrough in non-flammable electrolytes.

  Weaknesses

  Hard carbon, especially biomass-based hard carbon, suffers from limited batch consistency and kiloton-scale capacity, which the company views as a key bottleneck; latest valuation data has not been disclosed.

  Comparison

  HiNa places more emphasis on vertically integrated capabilities from materials to cells, while LiFun places more emphasis on large-scale manufacturing, system integration, and customer resources.

  Risks

  Hard carbon supply chain expansion may fall short of expectations; cost parity may be delayed; the commercialization pace among energy storage and automotive customers may be slower than expected.

• CATL (300750.SZ), Jiangsu Transimage (002866.SZ), Guangzhou Great Power Energy and Technology (300438.SZ)

  Listed comparable competitors shown in the table

  Strengths

  They benefit from listed-company financing, manufacturing, and customer resource advantages, and recognition of the sodium battery route for energy storage by CATL and BYD helps validate the industry direction.

  Weaknesses

  The report does not provide specific financial forecasts or rating adjustments for these listed companies.

  Comparison

  They are listed competitors faced by LiFun and HiNa, or reference points for industry direction.

  Risks

  Intensifying competition may compress the market share and profit margins of unlisted sodium battery manufacturers.

• Energy storage systems

  The most important sodium-ion application scenario

  Strengths

  Long cycle life, safety, and high-rate characteristics make them suitable for energy storage, and management expects sodium batteries could replace about 50% or more of energy storage demand in the long term.

  Weaknesses

  Current unit costs are still higher than LFP, and customer adoption depends on acceptance of lifecycle TCO.

  Comparison

  Compared with LFP, sodium batteries are more attractive in safety-, low-temperature-, and high-rate-focused scenarios, but still have a disadvantage in initial cost.

  Risks

  Falling lithium prices, continued declines in LFP costs, or procurement price pressure from energy storage customers may delay substitution.

• AIDC/data center backup power

  Potential safety-driven application scenario

  Strengths

  The report mentions Alibaba and a fire incident at a Korean IT center, and believes the higher intrinsic safety of sodium batteries may enable penetration into data center backup power.

  Weaknesses

  The report does not provide clear orders, penetration rates, or financial quantification.

  Comparison

  Compared with traditional lithium battery solutions, the core selling point of sodium batteries is safety; compared with lead-acid, they may offer both performance and lifespan advantages.

  Risks

  Data center certification cycles, conservative customer procurement, and changes in safety standards may affect adoption timing.

Key data

• Current global TAM for sodium-ion batteriesUS$2bnThe current global total addressable market size disclosed in the table.
• Current China TAM for sodium-ion batteriesUS$0.5-0.8bnThe current China total addressable market size disclosed in the table.
• Sodium battery cell costabout Rmb 0.5/WhThe report says it is still higher than LFP and parity has not yet been achieved.
• LFP cell costabout Rmb 0.4/WhUsed in the report for comparison with sodium battery costs.
• Cost gapabout Rmb 0.1/WhThe current cell cost gap of sodium batteries relative to LFP.
• Lithium price conditionlithium carbonate at least Rmb 150k/tThe report believes sodium batteries approaching parity depends on lithium prices remaining at or above this level.
• HiNa's view on 2026 growth2-4x growth versus the 2025 baseHiNa CEO’s description of industry growth.
• Long-term energy storage penetration viewabout 50%, and 70%-80% in specific scenariosThe two companies’ long-term view of sodium-ion battery penetration in energy storage and in extreme-temperature, indoor, and high-rate scenarios.
• LiFun patentsabout 100, including 15 PCT international patentsThe report discloses LiFun’s R&D and intellectual property position.
• LiFun cycle validation>10,000 cycles, at 45°C and 60°CThe report discloses LiFun’s technical validation in high-temperature cycling performance.
• Representative HiNa milestones2019 100 kWh energy storage station; 2022 1 GWh production line; 2024 10 MWh and 100 MWh energy storage stationsThe report lists HiNa’s commercialization path from R&D and production lines to energy storage projects.
• LiFun employee count640 employeesDisclosed in the company profile table.

Impact & implications

If sodium-ion batteries enter GWh-scale commercialization in 2026, energy storage systems, data center backup power with high safety requirements, start-stop batteries, and low-temperature high-rate applications may be the first to benefit. For the industry chain, battery cell manufacturers, polyanion cathodes, hard carbon anodes, equipment, and system integration capabilities will become focal points of competition; for investment judgment, attention should be paid to whether the cost gap between sodium batteries and LFP narrows, whether lithium carbonate prices remain in a favorable range, whether hard carbon capacity and consistency improve, and whether overseas customer orders validate lifecycle TCO advantages.

Risks

• Cell costs remain higher than LFP; if lithium carbonate prices fall below the range assumed in the report, the path to sodium battery cost parity may be delayed.
• Hard carbon anodes, especially biomass-based hard carbon, face bottlenecks in batch consistency and kiloton-scale capacity.
• Customer validation, certification cycles, and order ramp-up in energy storage, AIDC, and start-stop scenarios may be slower than management expects.
• The battery materials industry faces risks from commodity prices, exchange rates, government EV regulation, and changes in global climate policy.
• Industry competitors include CATL, Jiangsu Transimage, Guangzhou Great Power Energy and Technology, and multiple unlisted companies, and competition may compress market share and margins.
• The report includes profiles of unlisted companies, with limited valuation and secondary-market pricing data, and some commercialization judgments rely on management interviews.

What to watch

• Whether industry shipments in 2026 shift from pilot demonstrations to GWh-scale volume.
• Whether sodium battery cell costs continue to fall from about Rmb 0.5/Wh and narrow the gap with LFP at about Rmb 0.4/Wh.
• Whether lithium carbonate prices remain in the favorable range of at least Rmb 150k/t.
• The adoption speed of the polyanion cathode route in large-scale energy storage, as well as follow-up moves by leaders such as CATL and BYD.
• Batch consistency, kiloton-scale capacity, and supplier expansion progress for hard carbon anodes.
• Whether energy storage customers in Europe and North America are the first to form commercial orders, validating acceptance of lifecycle TCO.
• Whether AIDC/data center backup power accelerates sodium battery adoption due to rising safety requirements.
• LiFun’s domestic IPO preparation, financing progress, and rollout of large-scale industrial energy storage projects.
• HiNa’s continued delivery progress with customers in the power grid, telecommunications, commercial vehicles, and European energy storage integrators.