Global Trends

Salt Is the New Oil

Morgan Stanley has told its clients that salt is the new oil. The claim sounds like a stretch, and

By Conor Healy

July 3, 2026

Morgan Stanley has told its clients that salt is the new oil.

The claim sounds like a stretch, and in one sense it is. But the bank is making a specific bet, not a poetic one. It expects the sodium battery, built from one of the most common materials on Earth, to go from a rounding error today to more than a third of all battery deployment within a decade. The reasoning runs straight through the same AI and energy boom that has obsessed every market for two years.

The phrase is doing a lot of work, and it deserves to be tested rather than repeated. So here is the case for salt, and the part of the case that gets left out.

What Is a Sodium Battery?

A sodium battery works on the same basic principle as the lithium-ion cell in your phone, with one swap. Where a lithium battery shuttles lithium ions between its electrodes, a sodium battery uses sodium ions, the same sodium found in table salt.

That single substitution changes the economics. Lithium is scarce, expensive, and mined in a handful of countries. Sodium is one of the most abundant elements on the planet, sitting in every ocean and salt flat in effectively unlimited supply. A material you can pull from seawater behaves very differently, as a commodity, from one you have to dig out of the Atacama.

The chemistry brings other advantages too. Sodium cells are far more thermally stable than lithium ones, which makes them much harder to set on fire. They can be shipped fully discharged at zero volts without danger. They hold their performance in deep cold where lithium fades, running down to around minus 40 degrees Celsius. And they charge quickly, because sodium ions move readily between the electrodes.

By most measures that matter to a commodity trader, the sodium battery is cheaper, safer, more abundant, and more geographically neutral than the lithium one. If it is so much better, why is your car not already running on it?

It Won’t Power Your Car

The answer is energy density, and it is the sodium battery’s permanent handicap.

Energy density is how much power you can pack into a given weight. Sodium ions are heavier and bulkier than lithium ones, so a sodium cell stores less energy per kilogram than a lithium cell of the same size. The best mass-produced sodium cells today reach around 175 watt-hours per kilogram, while premium lithium cells run well above 250. For a long-range electric car, where every kilogram of battery is a kilogram you have to haul around, that gap is decisive.

This is why “salt is the new oil” oversells the headline. Salt is not going to power a 600-mile luxury EV any time soon. The energy-density ceiling is real, it is rooted in the physics of the sodium atom, and no amount of investment makes sodium as light as lithium.

The interesting part is that for the application Wall Street actually cares about, none of that matters.

Grid Storage Is the Real Prize

The booming demand is not for lighter car batteries but for grid storage, the giant stationary battery banks that hold electricity until it is needed.

Grid storage is the bottleneck of the entire energy transition, and it is now the bottleneck of the AI build-out as well. Data centres need vast, steady, around-the-clock power, and the renewable sources feeding them are intermittent. Somewhere in between sits a wall of batteries, and a battery bolted to the ground does not care how much it weighs. Energy density, the sodium battery’s one weakness, is almost irrelevant when the battery never moves.

What grid storage cares about is cost, safety, lifespan, and supply security, and on every one of those the sodium battery wins. Morgan Stanley’s framing is explicit: in a world increasingly driven by AI and hungry for energy, sodium addresses a critical bottleneck where energy security meets compute.

That is the engine behind the bank’s forecast. Morgan Stanley expects sodium-ion to reach 2% of total battery deployment by 2027, then accelerate to 20% by 2030 and 37% by 2035. The growth is not meant to come from beating lithium in cars but from owning the storage layer underneath the AI economy.

China Already Owns the Head Start

Here is the irony in the geopolitics. Salt is the one strategic material spread evenly across the entire planet, and yet the race to exploit it is already being won by a single country.

CATL, the Chinese firm that supplies roughly 39% of the world’s EV batteries, launched a sodium-ion brand called Naxtra and began large-scale production. In partnership with Changan, it has put the Changan Nevo A06 into production as the world’s first mass-produced passenger car running on sodium, due to market in mid-2026, with a range over 400 kilometres and a target of 500 to 600 in later versions. Under extreme cold, CATL says the cell delivers nearly three times the discharge power of an equivalent lithium iron phosphate battery.

The company has also unveiled the first sodium-ion battery designed specifically for grid-scale storage, with commercial deployment due before the end of 2026, and it is building swap stations across 140 Chinese cities to run on the chemistry. A decade of research and roughly $1.4 billion sit behind the Naxtra cell.

The United States is moving, but it is behind. A Morgan Stanley analyst notes that sodium is cheap and widely available domestically, which makes it a natural reshoring play, a battery America could build at home without importing scarce inputs. General Motors has an early foothold through a partnership with Peak Energy for next-generation sodium cells, with grid-scale deployment expected after 2028.

So the abundance is universal, but the manufacturing know-how is not. Sodium removes the raw-material chokehold that lithium handed to a few mining nations, then hands a fresh advantage to whoever masters production first. Right now that is China, again.

Two Bets on a Post-Lithium World

It helps to see sodium as one of two competing escapes from lithium, each making the opposite wager.

The sodium battery bets on cheap and abundant. It accepts lower performance in exchange for materials that are everywhere and a cost structure that undercuts lithium, and it aims at the unglamorous, enormous market for stationary storage.

The other bet is the solid-state battery, which chases the opposite goal: maximum performance, double the energy density, the dream of a lighter, longer-range car, at a cost that remains punishingly high and a timeline that keeps slipping. One technology is racing to be good enough and cheap; the other is racing to be expensive and extraordinary.

Both are responses to the same fact, that lithium is too scarce and too concentrated to carry the entire energy transition by itself. The likeliest future is not one chemistry winning but a division of labour: lithium and solid-state in the vehicles that need to be light, sodium in the grid that needs to be cheap.

So Is Salt the New Oil?

As a literal claim, no. Oil is an energy source; salt is a storage medium, and one with a hard ceiling on what it can carry.

As a claim about strategic value, the phrase is closer to right than it first appears. The AI economy runs on electricity, electricity needs storage, and the cheapest, safest, most abundant way to store it at scale increasingly points to sodium. A material long treated as worthless enough to spread on winter roads is becoming a piece of critical infrastructure.

Salt will not fill your tank or power your road trip. But it may quietly hold up the grid that runs the data centres that run the future, which is a strange and large destiny for the stuff in your kitchen. Morgan Stanley may have picked the wrong metaphor and the right bet.