The global battery industry is moving fast, and China’s battery giant CATL is already looking beyond today’s technologies.
At the 2026 Forum on Building China Into an Equipment Manufacturing Power, CATL Chief Scientist Wu Kai highlighted lithium-air batteries as one of the most promising technologies for the future. While the technology is still far from commercial use, its potential could transform electric vehicles (EVs) and energy storage systems over the next decade.
At the same time, CATL is pushing ahead with sodium-ion batteries and expanding its energy storage testing capabilities, showing that the company is working on both near-term and long-term battery solutions.
Why Lithium-Air Batteries Are Creating Excitement
Battery makers constantly search for ways to store more energy in smaller and lighter packages. This is where lithium-air batteries stand out.
- According to Wu Kai, lithium-air batteries could theoretically achieve an energy density of up to 3,500 watt-hours per kilogram (Wh/kg). That is several times higher than today’s commercial lithium-ion batteries.
Higher energy density means a battery can store more power without increasing weight. For electric vehicles, this could translate into significantly longer driving ranges. For energy storage systems, it could mean more power in a smaller footprint.
The concept itself is not new. Scientists first discussed lithium-air batteries in the 1970s, and rechargeable versions appeared in the 1990s. Since then, researchers worldwide have worked to unlock the technology’s potential.
Major companies and research groups have continued exploring the field. Around 2010, IBM conducted extensive lithium-air battery research. More recently, U.S. researchers reported important breakthroughs, including improved cycle life and energy density under laboratory conditions.
However, despite decades of research, lithium-air batteries remain largely confined to laboratories.
How Lithium-Air Batteries Work
Unlike conventional lithium-ion batteries, lithium-air batteries use metallic lithium as the anode.
The biggest difference lies on the cathode side. Instead of relying on heavy solid materials, lithium-air batteries use oxygen from the surrounding air. The oxygen enters through a porous carbon structure and participates in the battery’s chemical reactions.
This design reduces the amount of material required inside the battery, helping create an extremely lightweight system.
Because the battery draws oxygen from the atmosphere, it can theoretically achieve much higher energy density than existing battery technologies.
The table shows why lithium-air technology attracts so much attention. Even compared with advanced solid-state batteries, the theoretical energy storage potential is dramatically higher.
Significant Challenges Still Remain
Despite its promise, lithium-air technology faces several major obstacles.
One challenge involves lithium peroxide, a material that forms during discharge. This compound acts as an electrical insulator, making battery operation less efficient.
In addition, scientists still struggle with slow reaction speeds inside the battery. Catalysts designed to improve these reactions have yet to deliver consistent results.
Another issue is electrolyte stability. Current electrolytes tend to degrade over time, limiting battery lifespan. Furthermore, lithium metal anodes can develop dendrites—tiny needle-like structures that may reduce performance and create safety concerns.
Because of these technical barriers, industry experts generally believe large-scale commercialization remains at least a decade away.
- READ MORE: CATL’s Profit Surges 42% With Global Battery Demand and the Shift to a Zero-Carbon Future
Sodium-Ion Batteries Are Much Closer to Reality
While lithium-air batteries represent a long-term goal, CATL is making faster progress with sodium-ion technology.
The company unveiled its sodium-ion battery platform last year and expects large-scale production to begin in 2026.
Sodium-ion batteries use abundant sodium instead of lithium. Although they generally store less energy than lithium-based batteries, they offer several advantages:
- Lower material costs
- Greater resource availability
- Better performance in cold weather
- Reduced dependence on lithium supply chains
To support commercialization, CATL recently launched Phase VI expansion of its Fuding manufacturing base in Fujian Province.
The company plans to invest approximately RMB 5 billion ($725 million) in a new production line capable of adding 40 gigawatt-hours (GWh) of annual sodium-ion battery capacity.
Meanwhile, CATL and Changan Automobile have announced plans to launch the world’s first mass-produced passenger vehicle powered by sodium-ion batteries. The vehicle is expected to reach customers in mid-2026.
CATL Continues to Dominate Global EV Batteries
CATL’s investment strategy comes as the company strengthens its position in the global battery market.
According to data from SNE Research, CATL installed 141.4 GWh of batteries worldwide during the first four months of 2026. That represented nearly 20% growth compared with the same period last year.
- The company’s global market share climbed to 40.1%, reinforcing its leadership in the EV battery sector.
Chinese battery manufacturers continue to gain ground across the industry. Companies such as CALB, Gotion, EVE Energy, SVOLT, and Sunwoda all reported strong year-over-year growth.
Meanwhile, BYD maintained its position as the world’s second-largest battery supplier. Although its battery installations declined slightly, the company’s overseas EV expansion and battery innovations could support future growth.
CATL Opens World’s Largest Energy Storage Validation Center
Beyond batteries themselves, the company is also investing heavily in energy storage reliability. It recently opened the CATL Xiamen Energy Storage Validation Research Institute (ESVL), which it describes as the world’s largest and most comprehensive energy storage testing and validation platform.
The facility covers roughly 10 hectares and required an investment of around RMB 3 billion ($440 million).
Importantly, CATL says the platform will operate as open infrastructure available to the broader energy storage industry.
Why Real-World Testing Matters
As energy storage installations expand worldwide, performance and reliability have become major concerns.
Many storage projects fail to perform exactly as expected after deployment. Delays in grid connection and operational challenges can increase costs and reduce returns for developers and investors.
CATL believes the industry must move beyond testing individual components and focus on validating entire systems under real operating conditions.
The ESVL facility is designed to evaluate:
- Safety performance
- Grid-support capabilities
- Long-term reliability
- Station-level operational performance
According to Wu Kai, scientific testing and rigorous validation will become increasingly important as energy storage projects grow larger and more complex.
The facility also works with international certification organizations, including TÜV SÜD, TÜV Rheinland, China General Certification Center, and CSA Group.
Looking Ahead
CATL’s latest moves reveal a two-track strategy. On one hand, the company is preparing for the future through advanced technologies such as lithium-air batteries. On the other hand, it is accelerating the commercialization of sodium-ion batteries and expanding energy storage infrastructure today.
Lithium-air batteries may still be years away from reaching consumers. Nevertheless, their enormous theoretical energy density makes them one of the most intriguing battery technologies under development.
Meanwhile, sodium-ion batteries and advanced energy storage systems are already moving toward commercial reality. Together, these efforts could help CATL maintain its position at the center of the rapidly evolving global battery industry.
The post CATL Bets on Lithium-Air Batteries While Expanding Sodium-Ion and Energy Storage Leadership appeared first on Carbon Credits.
Most businesses that decide to act on their net-zero targets reach the same point of friction. Buying carbon credits has meant tracking down brokers, sitting through sales calls, and requesting a quote just to learn a price, sometimes with limited proof of what you are buying.
The earnings calls that quietly reframed climate from sustainability question to operating risk.
Three earnings calls in the last 18 months tell the story without any help from a press release.
Hershey, May 2024: cocoa price exposure compresses margin, and the company attributes part of the cost shock to West African weather. Olam, July 2024: coffee climate exposure quantified in the annual report. JBS, January 2025: supply chain climate disclosures expanded materially in response to investor pressure and regulatory expectation. None of these companies issued the announcement as climate news. They issued it as financial news. The climate-linked supply chain risk did not arrive with a sustainability framing; it arrived as a P&L line.
You are probably reading this article because you suspect the same thing is happening to your business. This piece walks through what is showing up on which earnings calls, how procurement and finance leaders are quantifying the exposure, and what serious corporates are doing about it before the regulator asks.
Where climate risk has already appeared in earnings
The pattern is consistent across resource-intensive sectors. A weather event compresses supply, the price spikes, the cost flows through the income statement, and the analyst on the call asks whether the event is anomalous or structural. Increasingly, the honest answer is the second one.
Cocoa is the cleanest example. The 2023 to 2024 West African harvest fell sharply on the back of erratic rainfall and disease. Cocoa futures more than tripled. Companies with concentrated West African sourcing absorbed the cost; companies with diversified sourcing absorbed less. The exposure was not climate as ESG topic. It was climate as cost of goods.
Coffee follows the same pattern. Brazilian and Vietnamese harvests have moved on weather more sharply across the last several seasons. Roasters with long-tenor supplier relationships and origin diversification have managed the volatility; roasters with spot-market exposure have not. Wheat, sugar, palm oil, beef: the same dynamic in different commodities, a pattern the IPCC AR6 Working Group II report projects will intensify across agricultural systems through mid-century.
What this means: climate risk is no longer a footnote in the 10-K. It is a line item the CFO has to explain on the call.
The three commodity exposures that hit margin first
For most companies with material Scope 3 exposure, three exposures dominate the near-term P&L risk.
- Concentrated single-origin sourcing in a climate-vulnerable region. If your tier-one supply for any material commodity sits in one geography, you have a concentration risk that climate amplifies. Diversification across origins is the obvious hedge, but it takes years to build and requires relationships you cannot acquire by tender.
- Supplier financial fragility under climate stress. Smallholder farmers, who supply a large share of the global cocoa, coffee, and palm oil market, do not carry the balance sheets to absorb yield shocks. When yields collapse, they exit. When they exit, your supply base shrinks, and the surviving suppliers raise prices. The risk is structural, not cyclical.
- Logistics and storage exposure to extreme weather. Hurricane disruptions to Gulf shipping, drought-driven Panama Canal restrictions, flooding in European inland waterways: each of these has moved input costs in the last three years, a pattern documented in Munich Re’s natural catastrophe data. The exposure shows up as a one-quarter event in the financial press but accumulates over time on the cost line.
TCFD and ISSB disclosure changes
The disclosure architecture has now caught up with the risk. The Task Force on Climate-related Financial Disclosures, whose recommendations are now embedded in the ISSB’s IFRS S2 climate standard, requires companies to disclose climate-related risks across physical and transition categories, with quantification where possible.
For physical risk specifically (the climate-linked supply chain risk you are reading about), the disclosure must address both acute exposures (extreme weather events) and chronic exposures (gradual changes in temperature, precipitation, and growing seasons). The disclosure must address the time horizon over which the risk is material, the parts of the value chain exposed, and the financial impact under different scenarios.
The CSRD imposes similar requirements under European law, with double materiality (both financial and impact materiality) embedded in the assessment. The practical effect: your auditors and your investor relations team now need a defensible answer to the climate-linked supply chain risk question, and the answer needs to be quantified.
What procurement and finance can do now
Three actions matter near-term.
Map your exposure. Most companies do not have a clear view of which tier-one and tier-two suppliers sit in which climate-vulnerable geographies. Without the map, you cannot quantify the risk, and without the quantification, you cannot disclose it credibly. The map is the foundation, and World Resources Institute climate risk research provides useful public tooling to start.
Diversify and deepen, in that order. Diversification across origins reduces concentration risk, but the deeper move is to invest in the resilience of the suppliers you already have. Regenerative practices, agroforestry, soil health interventions: these reduce yield volatility under climate stress and protect your input cost trajectory.
Embed the climate spend inside procurement, not outside it. Treating climate risk as a sustainability cost line subordinates it to the ESG budget. Treating it as a procurement and resilience investment puts it in the budget that matters, which is the cost-of-goods budget that the CFO defends quarterly.
Nature-based supply chain investments are the asset class designed for exactly this purpose. They sit inside the value chain, they reduce climate-linked supply risk, they generate verifiable Scope 3 reductions, and they produce the documentation an auditor and a regulator can both test.
If you are quantifying climate-linked supply chain risk in advance of the next earnings cycle or the next disclosure period, the carbon and sustainability experts at Carbon Credit Capital can help you map your exposure and structure a Dual-Value Model response that addresses reduction, resilience, and disclosure-readiness in a single program. Schedule a consultation.
More and more small and medium-sized businesses are hearing the same question from their larger customers: What is your carbon footprint? That question now travels down entire supply chains, and it arrives next to tender requirements, certification criteria, and rising customer expectations.
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