SQLCMD – Cannot Connect to Named Instance

The casing of the instance name does not matter.

You need to try:

sqlcmd -S "(localdb)\MSSQLLocalDB" -d testdb01

The "localdb" part needs to be enclosed in parenthesis as that is a special syntax that points to a SQL Server Express LocalDB-specific API that allows for automatic instance start-up upon being referenced in a connection string. The whole instance name needs to be enclosed in double quotes. The command-line shown above works for me, at least outside of PowerShell.

With the help of Dan Guzman's comment I got the connection working using a port.

I had a Windows machine with SQL Management Studio connected to the database in question, and used:

netstat -abn

Then I searched for ssms.exe for the connection details:

TCP    192.168.0.31:50777     192.168.0.78:49399     ESTABLISHED [Ssms.exe]

Alternatively log into the database server and look at the ports used by the instance in SQL Server Configuration Manager (SQL Server Network Configuration > Protocols for INSTANCENAME > TCP/IP > Properties > IPAll TCP Dynamic Ports).

The following then both worked:

sqlcmd -S 192.168.0.78,49399 -U User -P pwd -d DatabaseName -Q "SELECT TOP 5 Id FROM dbo.MyTable;"
sqlcmd -S SERVERNAME,49399 -U User -P pwd -d DatabaseName -Q "SELECT TOP 5 Id FROM dbo.MyTable;"