CATL Deploys Billions on Two Fronts: Sodium-Ion Scale-Up and AI Data Center Push

China’s battery behemoth CATL is placing a pair of enormous bets that reach far beyond electric vehicles. The company is simultaneously pouring capital into sodium-ion battery production capacity and wiring itself into the infrastructure that powers artificial intelligence, signalling a strategic pivot from pure-play battery supplier to integrated energy services provider.

The most capital-intensive leg of the plan is sodium-ion. CATL has committed 5 billion yuan (about $690 million) to build 40 GWh of annual sodium-ion cell capacity, with commercial deployment in passenger cars targeted by the end of 2026. Cumulative research and development spending on sodium batteries already approaches 10 billion yuan, according to the company. Founder and chairman Robin Zeng has suggested the technology could eventually displace 30 to 40 percent of the existing battery market, reshaping the competitive landscape for stationary storage and lower-cost EVs.

That projection is underpinned by technical progress CATL detailed at the inaugural Golden Lithium Awards, announced on May 16 by Chinese research platform RealLi Research. The company was recognised for mass production of third-generation Qilin cells, second-generation sodium-ion batteries, and CTC 2.0 cell-to-chassis integration — covering both high-performance automotive batteries and grid-scale storage solutions. The awards also highlighted broader industry shifts toward solid-state batteries, sodium-ion, and more localised supply chains.

On the market share front, CATL’s dominance remains intact. In April, it installed 29.06 GWh of battery capacity in China, commanding a 46.6 percent share. The mix was heavily weighted toward LFP chemistry, with 19.53 GWh, while ternary NMC contributed 9.53 GWh. Globally, the company’s first-quarter share rose to 40.7 percent, up from 38.5 percent a year earlier, with nearest rival BYD falling to 13.7 percent. Domestic installations in the first three months grew 15.2 percent year on year.

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Yet the stock has not shared the enthusiasm. Shares traded at 417.23 yuan on Monday, 1.5 percent lower than the previous close, and have slipped roughly 9 percent from the early-May high. On Friday the stock closed at 423.60 yuan, leaving it down nearly 7 percent on the week and well off the 2026 peak of 460 yuan, though still above its 50-day moving average.

Parallel to the sodium-ion push, CATL is wiring itself into the AI economy. In the largest single transaction, it is taking up to a 38.1 percent stake in Chinese data centre operator VNET Group through affiliated entities, a deal valued at up to $942 million. Buyers will pay $8.69 per American depositary share, with closing expected by the end of 2026.

That investment follows a April move to acquire an indirect 17.4 percent stake in Zhongheng Electric for 4.1 billion yuan. Zhongheng manufactures power converters for large data centres and counts Alibaba and Tencent among its customers. CATL has also developed a dedicated sodium-ion cell for AI infrastructure, offering more than 300 ampere-hours of capacity and 97 percent efficiency, with commercial launch set for later this year. The technology will be paired with energy storage systems installed in partnership with infrastructure providers such as SenseTime to stabilise power supply during fluctuating computing loads.

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China’s planned lithium battery production hit a record for the third consecutive month in May, driven primarily by energy storage, which now accounts for 42.3 percent of planned cell output. That dynamic lends further weight to CATL’s strategy of distributing its technology across both mobility and stationary applications.

As 2026 progresses, the company faces a critical test: translating awards and pilot programmes into large-scale commercial deliveries for sodium-ion. Success would turn a differentiation talking point into a genuine industrial growth trajectory — one that now runs in tandem with a parallel push to dominate the power backbone of artificial intelligence.

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