CBAK Energy Technology (NASDAQ: CBAT) got a nice bump yesterday after announcing that it signed an agreement for a new 12-gigawatt-hour battery project in Nanjing, China, as the small battery manufacturer looks to significantly expand its sodium-ion business. And this in addition to another 6 GWh of annual production capacity at its existing Nanjing facility by the end of 2026. That facility currently has 4.5 GWh of annual capacity, so that the expansion would bring the total to 10.5 GWh. That’s not trivial for a company of this size.

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To put that into perspective, CBAK estimates the additional 6 GWh could generate $356 million to $400 million in annual revenue if the new capacity is fully utilized and all batteries are sold. But the larger 12 GWh project could eventually be even more significant. CBAK estimates that project could generate another $712 million to $741 million in annual revenue at full production and utilization, based on current lithium-ion battery prices.

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Why sodium-ion batteries?

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Most rechargeable batteries used in electric vehicles and energy storage today rely on lithium. Sodium-ion batteries replace lithium with sodium, an abundant and potentially less expensive material.

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The trade-off is that sodium-ion batteries generally store less energy for their weight than lithium-ion batteries. But that disadvantage becomes less important for applications such as stationary energy storage, where weight isn't nearly as critical as it is in an electric vehicle.

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CBAK isn't committing the entire new factory to sodium-ion batteries, either.

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The planned production lines will be capable of manufacturing both sodium-ion and lithium-ion cells, allowing CBAK to switch production depending on customer demand and market conditions.

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The company says customers are already testing its sodium-ion cells for residential and portable energy storage, electric mobility, specialty vehicles, automotive start-stop systems, and backup power.

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Indeed, it’s been a good year for CBAK.  YTD, the stock is up more than 63%.

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