CMSC has released a research report stating that, looking ahead to 2026, the energy storage sector is expected to become the core scenario for the release of sodium battery demand, driving the industry chain into an accelerated volume expansion phase. High-power sodium battery start-stop power applications and the new national standard for two-wheelers driving model transitions are also expected to contribute new incremental demand. Sodium batteries are breaking through core mass production bottlenecks. In the future, with the application of specialized sodium battery equipment production lines, the cycle time, yield rate, and cost of sodium battery production are expected to improve significantly. On the cost front, the firm estimates that by 2026, the manufacturing cost of sodium batteries is expected to be lower than that of LFP batteries. The main views of CMSC are as follows: MWh-scale sodium battery energy storage projects are continuously being implemented. Leading battery companies have successively announced orders of tens of GWh. Sodium batteries are transitioning from demonstration projects to large-scale commercial application. Over the past few years, mass production bottlenecks such as moisture control and gas swelling have been gradually overcome. Large-scale mass production and new technologies like anode-free designs are expected to bring continuous cost reductions. With lithium and copper prices remaining high, the cost competitiveness of sodium batteries has become prominent, offering advantages in product performance for scenarios such as energy storage, small power applications, and start-stop power. Looking ahead to 2026, the firm believes the energy storage sector is expected to become the core scenario for sodium battery demand release, driving the industry chain into an accelerated volume expansion phase. Sodium batteries have entered the first year of large-scale application. Currently, nearly 70% of sodium batteries are applied in the energy storage field, primarily because this scenario has relatively lower requirements for energy density and emphasizes safety and cost. In 2026, domestic sodium battery energy storage demonstration projects, such as those in Honghu, Hubei and Rudong, Jiangsu, are progressing steadily. CATL and HyperStrong announced a 60GWh cooperation, and BYD and EVE Energy delivered energy storage systems. Overseas GWh-scale energy storage collaborations are emerging. Sodium battery shipments for energy storage are expected to exceed 15GWh, becoming the core support for sodium battery volume expansion. Additionally, high-power sodium battery start-stop power applications and the new national standard for two-wheelers driving model transitions are expected to contribute new incremental demand. Breaking through core mass production bottlenecks. Early sodium battery mass production was constrained by extremely low dew point requirements and the challenge of bonding hard carbon to aluminum foil. Leading industry companies have controlled moisture content to within 5ppm through advanced moisture control processes and used pore size regulation combined with electrolyte additives to synergistically suppress gas generation, reducing the swelling rate by 90%, effectively solving mass production obstacles. In the future, with the application of specialized sodium battery equipment production lines, the cycle time, yield rate, and cost of sodium battery production are expected to improve significantly. In the short term, biomass-based hard carbon anodes remain mainstream, while anode-free technology holds potential. The mainstream hard carbon anode in the industry is currently biomass-based. If the scale increases significantly further, pitch-based anodes may become a solution. In the long term, anode-free technology holds potential. It eliminates the costs associated with the anode's hard carbon, conductive carbon, and binder, while increasing the space and mass proportion of active materials, significantly boosting sodium battery energy density. However, issues such as uneven sodium deposition and unstable SEI interfaces remain unresolved, posing challenges for large-scale mass production. With lithium prices elevated, sodium batteries are gradually becoming cost-competitive in energy storage. Due to strong downstream industry demand, after the prices of lithium carbonate/copper foil climbed to 170,000/122,000 yuan per ton, the manufacturing cost of sodium batteries for energy storage has become essentially on par with LFP batteries. Considering that the prices of key raw materials for sodium batteries (cathode, anode, electrolyte) are continuously declining with scaled-up mass production, the firm estimates that by 2026, the manufacturing cost of sodium batteries is expected to be lower than that of LFP batteries. Investment recommendations: DingSheng New Material, Zhenhua New Material, Ronbay Technology, Tonking Technology, Zhongke Electric, Putailai, Shangtai Technology, Binhai Energy, CATL, Pylon Technologies, Veken Technology. Risk warnings: Risks of downstream application falling short of expectations, risks of industrialization progress falling short of expectations, risks of raw material price fluctuations.