China is giving sodium-ion batteries a temporary tax advantage over conventional lithium-ion technology as manufacturers look to bring the alternative chemistry into commercial electric vehicles. One of the country’s leading sodium-ion battery developers, Hina Battery, is planning a 10 GWh production base in Wuhan and has partnered with a vehicle manufacturer to develop electric sanitation trucks.The expansion comes as China introduces a consumption tax on specified lithium-ion batteries while exempting qualifying sodium-ion batteries through 2028. The policy could improve the economics of sodium-ion production, although falling lithium prices have narrowed the cost gap between the two chemistries.The technology is also attracting attention for its performance in extreme cold. FAW Jiefang reported that one of its electric heavy trucks equipped with a sodium-ion battery retained more than 90% of its usable capacity during testing at minus 40 degrees Fahrenheit.Creating a tax advantage for sodium-ion batteriesChina’s Ministry of Finance, General Administration of Customs and State Taxation Administration issued Announcement No. 20 (2026) on July 16, revising consumption tax rules for several battery categories.From September 1, 2026, specified lithium-ion batteries became subject to a 2% consumption tax. The rate is scheduled to rise to 4% on September 1, 2027. Qualifying sodium-ion batteries, solid-state batteries and fuel cells are exempt from the tax through December 31, 2028, provided they meet applicable national standards. The exemption gives sodium-ion manufacturers a temporary fiscal advantage, but it does not automatically make their products cheaper to produce. Battery-grade lithium carbonate averaged approximately $13,500, per metric ton on October 28. Meanwhile, square lithium iron phosphate (LFP) cells for electric vehicles averaged about 5.7 US cents, per watt-hour on October 22.Sodium is more widely distributed geographically than lithium, potentially offering manufacturers a more diversified raw-material supply. However, the downstream sodium-ion supply chain remains concentrated in China, particularly in cell manufacturing, cathode materials and hard-carbon production.Hina targets commercial vehicle production in WuhanHina Battery signed an agreement with Wuhan’s Jiangxia District on October 14 to establish a sodium-ion battery production base with planned annual capacity of 10 GWh, with the first phase expected to provide 3 GWh of capacity.Construction is scheduled to begin in early 2027, with initial production targeted before the end of that year. The project was announced during the fourth National Sodium Battery Symposium, showcasing China’s effort to move sodium-ion technology beyond laboratory development and into larger-scale manufacturing.Hina has also signed a separate agreement with Chengli Special Automobile Group to develop sodium-ion-powered sanitation vehicles. The planned lineup includes refuse collection trucks, hook-lift vehicles, dust-suppression trucks and food-waste collection vehicles.Sodium-ion batteries have several potential advantages over lithium-ion alternatives, including access to more widely available raw materials and the possibility of better performance in low temperatures. Their main limitation remains lower energy density, which can translate into heavier or larger battery packs for the same amount of stored energy.