If the U.S. is to loosen Asia’s grip on the battery supply chain, it must diversify sourcing. And companies like Sila Technologies will need access to domestic raw materials.

Sila Nanotechnologies was founded in 2011 to bring lithium-ion battery chemistry into the next generation, says Gene Berdichevsky, company co-founder and chief executive officer. Its focus is on improving the energy density of lithium-ion batteries, which would reduce material requirements and drive down the cost of electric vehicles.

The company makes a silicon-based anode material in the form of a black power that’s used in the assembly of lithium-ion batteries. Anodes and cathodes store lithium when the battery is charged and discharged. While most of the world’s anode materials are graphite-based, Sila’s silicon-based product can boost the amount of energy a battery stores by 20% to 40%, he says.

Berdichevsky says that Sila is concentrating on the automotive market because of its relatively high demand for batteries and related technologies. He estimates that there are about 10,000 iPhones worth of Sila technology in one car.

To bring its battery technology to more carmakers, Sila has been designing and constructing an anode production facility in Moses Lake, Washington with the help of a $100 million investment from the U.S. Department of Energy. Berdichevsky says the DOE selected Sila for the investment because they had previously worked together, and the company has a pre-existing relationship with an auto industry heavyweight in Mercedes.

Berdichevsky says no other next-generation battery technology company has had a similar type of arrangement. “There’s a lot of development collaborations between battery start-ups and car companies, but none of the others appear to be on track to go into mass production right now.”

Production volume at the Moses Lake plant will be 100 times greater than that of Sila’s existing facility in Alameda, California, which will help the company meet the automotive industry’s growing demand for more battery materials.

Sila is currently buying the equipment needed to meet those production outputs. Berdichevsky says that the company hopes to have that equipment online by the second half of 2024, with the first commercial products shipped to customers by 2025. The process of getting the plant online is expected to create 100 to 200 jobs, he adds.

Unfortunately, rapid expansion in the automotive sector has outpaced the battery material industry’s production and distribution rates. In the past, car manufacturers demanded that battery makers build factories on their own dime.

“That’s not a particularly attractive value-proposition to the battery makers because these are $5 billion investments,” Berdichevsky says. “That created a shortage of battery production capabilities for car makers.”

More recently, battery makers and car manufacturers have begun establishing joint ventures that require car companies to put up a lot of capital to support the construction of battery factories.

Berdichevsky cites recent partnerships between LG and General Motors, and Samsung and Stellantis, as examples of automakers committing to a certain amount of output from the battery factories. “That’s driving a pretty dramatic expansion of gigafactories around the world.”

When batteries were just starting to be used in vehicles, there were about 30 gigawatt hours of global capacity. Now, there’s at least 10 times more capacity with the industry on its way to increasing its capacity 100-fold, Berdichevsky says.

New challenges continue to arise in the domestic battery materials sector. Berdichevsky says that the U.S. is setting itself up to be dependent on foreign nations, like China, for the country’s supply of energy resources. “The challenge now is finding that resource — of lithium, nickel, anode materials, whatever is needed — and building that out,” he says.

Even though the U.S. has the natural resources to meet battery production needs, there are still many regulatory environmental and financial hurdles that stand in the way of an improved domestic battery material industry, Berdichevsky says.

“It’s great that we have these economic incentives to produce precursor materials for lithium-ion batteries domestically, but we still have to get to a place where it’s easier to build those factories or mines and do that work,” he says. "Otherwise, the supply chain isn’t really going to change.”