A significant turning point in the search for environmentally friendly energy storage options is the switch from lithium‐ion to sodium‐ion batteries. This review highlights the potential of sodium‐ion battery (NIB) technology to address the environmental and financial issues related to lithium‐ion systems by thoroughly examining recent developments in NIB technology. It is noted that sodium is more abundant and less expensive than lithium, NIBs have several benefits that could drastically lower the total cost of energy storage systems. In addition, this study examines new findings in important fields including electrolyte compositions, electrode materials, and battery performances of lithium‐ion batteries (LIBs) and NIBs. The article highlights advancements in anode and cathode materials, with a focus on improving energy density, cycle stability, and rate capability of both LIBs and NIBs. The review also covers the advances made in comprehending the electrochemical mechanisms and special difficulties associated with NIBs, such as material degradation and sodium ion diffusion. Future research directions are discussed, with an emphasis on enhancing the scalability and commercial viability of sodium‐ion technology over lithium on Electric Grid. Considering sustainability objectives and the integration of renewable energy sources, the review's assessment of sodium‐ion batteries’ possible effects on the future state of energy storage is included in its conclusion.