The lithium-ion battery built the modern world, but it no longer owns the future alone. After three decades of near-total dominance, the battery industry is splitting into specialized chemistries — cheap sodium-ion for the grid and budget cars, high-energy solid-state for premium EVs, and an alphabet soup of experimental cells for everything else.
The market is big enough for everyone. Battery demand has grown more than fortyfold since 2010, driven by electric car sales that hit 20 million in 2025 — about a quarter of all cars sold globally. Grid storage capacity has expanded twentyfold in just five years. "The battery market is becoming so large that it's not a matter of one technology replacing another," says Teo Lombardo, a former battery chemist and now an analyst at the International Energy Agency. "It's about specializing to serve different parts of the market."
Sodium-ion finds its groove
Sodium-ion batteries are the surprise success story of 2026. Long written off as too bulky and too weak, they have found a natural home in two places where weight barely matters: electricity grid storage and budget electric cars.
CATL, the world's biggest battery maker, signed a deal in May to supply 60 gigawatt-hours of sodium-ion batteries for a storage project in Ningde, China — enough to run thousands of homes for a year. Two weeks later in Munich, the company unveiled its TENER Sodium Energy Storage System, calling it commercially mature and already validated in real-world deployments. In July, CATL inked a second European sodium-ion storage deal, this one also measured in single-digit gigawatt-hours. You can read more about Battery Tech coverage.
The pitch is simple: sodium-ion batteries last. CATL's latest cells are rated for 15,000 charge-discharge cycles and a 25-to-30-year service life. That longevity, rather than energy density, is what makes them attractive for grid operators who plan infrastructure on multi-decade timescales. Sodium-ion also works well in cold weather — a practical advantage over lithium-ion in northern climates.
On the vehicle side, sodium-ion-powered cars hit Chinese roads in 2023, and the first mass-production model — the Changan Nevo A06 — was unveiled in February 2026. The trade-off is real: sodium-ion packs deliver about 30 percent less energy density than equivalent lithium-ion packs, cutting range on an average SUV from about 370 miles to roughly 220 miles. But the cost gap is narrowing fast as sodium-ion volumes scale, and the raw materials — salt and biomass — are abundant everywhere.
"The more technologies you have, the more resilient the market will be," says Lombardo.
Solid-state edges closer to showrooms
Solid-state batteries, which replace the flammable liquid electrolyte with a solid ceramic layer, have been the industry's tantalizing "next big thing" for years. They promise to double energy density, eliminate fire risk, and push EV range past 600 miles. The problem has always been cost and manufacturing complexity.
Now several major automakers say they are within striking distance. Toyota and Nissan both forecast solid-state batteries will be available by around 2028. Colorado-based Solid Power is working on units for BMW and Ford. QuantumScape, a California startup, signed a development deal with Honda in June. CATL has its own solid-state program, which it rates at level four on a nine-point technology-readiness scale — still early, but advancing.
The batteries will be expensive at first, making them a natural fit for high-value applications: luxury EVs, robotics, and aerospace. "Commercialization by 2030 is probably realistic," says Lombardo, but he cautions that solid-state will occupy a premium niche rather than replace lithium-ion across the board.
Some variants are fully solid. Others, like QuantumScape's design, use a hybrid system with a small amount of gel or liquid to ease the interface between layers. Either way, the engineering challenge is the same: making a cell that survives thousands of charge cycles without the internal cracking that kills solid electrolytes.
The gigafactory race heats up
While the labs chase chemistry breakthroughs, factory floors are humming. June and July brought a wave of production announcements across the supply chain.
In Europe, Eni broke ground on an Italian gigafactory that will make LFP cells for energy storage, while Chinese manufacturer Gotion partnered with the Spanish government to build a cathode production facility in Spain. Tesla's Berlin-Brandenburg plant announced its second production increase, targeting 7,500 vehicles per week and adding 3,500 jobs. Lyten, an American startup, continued acquiring Northvolt's assets after the Swedish battery maker's 2024 bankruptcy, picking up a partially-built German factory in the process.
In the United States, sodium-ion startup Peak Energy began plans for what would be the country's first giga-scale sodium-ion factory in California — a $71 million, 4 GWh facility targeting 2027 production. US sodium-ion startups have also formed the American Battery Leadership Coalition, aiming to challenge China's dominance in the chemistry.
China, meanwhile, is rewriting its battery tax policy. Consumption-tax exemptions on lithium-ion batteries end this September, replaced by a 2 percent tax that rises to 4 percent in September 2027. Sodium-ion and solid-state batteries remain exempt, giving them a policy tailwind as they scale up.
Grid storage changes everything
The biggest demand driver for new battery chemistries may not be cars — it's the electrical grid. Solar and wind farms need huge banks of batteries to shift power from sunny afternoons to dark evenings. According to the EIA's latest Electric Power Monthly report, the US alone added 16.6 GW of utility-scale battery storage between June 2025 and May 2026. The agency expects battery storage to add another 23.2 GW by June 2027 — a 48 percent increase that would push total US grid battery capacity past 72 GW.
California made history in April 2024 when batteries became the largest single source of power on the state's grid for a few hours after sunset. That milestone is repeating more often as storage capacity expands.
Sodium-ion is a natural fit for these applications. It is cheaper per kilowatt-hour than lithium-ion, its raw materials are not subject to the same geopolitical supply-chain risks as lithium and cobalt, and cycle life of 15,000 cycles means grid operators can plan on 30-year assets. In Europe, the European Commission has said 200 GW of battery storage will be needed to meet renewable-energy targets, opening a massive market for sodium-ion, iron-air, and other non-lithium chemistries.
Octopus Energy, the UK supplier, announced plans for a home battery system called the Nook — a compact plug-in unit aimed at renters — and a battery-swapping partnership with CATL called "Swaptopus" for electric heavy goods trucks in Europe. Learn more about EV and energy storage coverage.
The long road ahead
Despite the excitement, lithium-ion remains the dominant technology. Solid-state makes up roughly 1 percent of existing and funded global manufacturing capacity. Sodium-ion accounts for about 4 percent. The incumbent is entrenched, with decades of manufacturing refinement, established supply chains, and falling costs that have dropped up to a hundredfold since 1991.
New chemistries do not arrive as overnight revolutions. "You don't expect miracles in batteries; they don't change overnight," says Jagjit Nanda, a materials scientist who heads the SLAC-Stanford Battery Center. "Unlike other technologies, this is very incremental."
The next wave of EV batteries arriving around 2030 will not be a single winner. The market will support lithium-ion, sodium-ion, solid-state, and others in parallel — each serving the applications it handles best. Lithium-ion keeps the high ground in energy density for premium cars. Sodium-ion scales cheaply to store renewable energy. Solid-state delivers extreme range for the high-end market. And behind all three, researchers are already working on lithium-sulfur, lithium-air, zinc-based, and organic batteries that could change the game all over again — a decade or two from now.
"By 2035, lithium-ion will definitely still be the majority," says Lombardo. "Sodium-ion will very likely have a share. Solid-state might be there." And after that? "It's probably too early to say." The full analysis is available on the EV category page for more on how battery technology is shaping electric transportation.