US is lifting a charge to defeat China, the king of electric vehicle batteries

Sila Nanotechnologies Inc., a Silicon Valley startup that makes silicon anode materials used in batteries, is one of the most recent to receive Wall Street support. The company plans to announce Tuesday that it has raised $ 590 million in new funding, Chief Executive Gene Berdichevsky told The Wall Street Journal.

Much of that money will be used to build a factory in the US to make battery materials, he said. The location has not yet been selected.

Other battery-focused startups, such as California-based Romeo Power Inc.

and the Canadian mining company Lithium Americas Corp.

, which has operations in the US, has also recently tapped public markets. Romeo went public late last year, while Lithium Americas said Friday it sold $ 400 million worth of stock in a public offering intended to finance a lithium project in Nevada.

Industry executives and lawmakers say the US must reduce its dependence on China if it is to cut costs and remain competitive in making electric vehicles and their batteries domestically. President Biden has also made securing more of this supply chain in the United States a priority, as part of a wider effort to accelerate the shift from gasoline in the auto industry.

According to Benchmark Mineral Intelligence, the capacity of US battery production will increase dramatically over the next decade, increasing more than sixfold from about 60 gigawatt hours on an annual basis last year to about 383 gigawatt hours by 2030.

Battery manufacturing giants such as LG Chem Ltd.

and SK Innovation Co.

are building large factories in the US to expand the US production of batteries for electric cars. LG Chem is building its Ohio plant as part of a joint venture with General Motors Co.

Tesla Inc.

is also expanding its battery-making capacity, trying to cut costs and shorten its supply chain by making some materials in-house.

And yet there is currently little production of critical battery materials such as lithium and graphite in the US. Those materials are needed for the anodes and cathodes that circulate ions to generate the battery’s current.

“You have a lot of things lined up that are a real demand signal in the supply chains of ‘we need more, we need it locally and we need it cheaper,’ ” said John McClure, a director at investment bank Nomura Greentech Capital Advisors. LLC.

Today, much of the supply chain is concentrated in China, which makes more than 70% of the world’s lithium-ion batteries, according to Benchmark. The country also refines and produces most of the minerals and materials needed for those batteries.

Analysts are optimistic that electric vehicle sales will boom in the coming years. Although they represent about 2% of the U.S. auto market today, that share is expected to grow to 10% by 2025, according to investment bank Morgan Stanley..

There are risks if consumer demand does not materialize as expected. An attempt to expand US battery production – primarily with government funding under then President Barack Obama – stalled early last decade when auto companies didn’t see the demand for electric vehicles as expected.

By moving more battery production to the US, auto companies and their suppliers can cut costs, a step important for consumers to adopt electric vehicles more widely, drivers say.

Sila, a company co-founded by Mr. Berdichevsky, who helped design Tesla’s first battery packs, is specifically looking to increase anode production in the US.

The ten-year-old company, which was supported in 2019 by the German car manufacturer Daimler AG

, his research focused on the development of silicon-based anodes. Executives say the anodes can store more energy than the graphite used in current batteries.

This latest round of investment, led by Coatue Management and T. Rowe Price Associates Inc., values ​​the company at $ 3.3 billion, Mr. Berdichevsky said.

“Billions of dollars in capital really need to go into the ground to bring a new technology like this to scale,” he said.

Sila, which already supplies some consumer electronics companies, aims to build a new factory by 2025 to get its anode into vehicles, Mr Berdichevsky said. When the plant is ready, it is expected to make enough materials to power more than a million cars annually with batteries, he said.

Other anode producers are also scaling up in the US.

Novonix Ltd.

, an Australia-listed company, has a contract to sell 500 tons of synthetic graphite produced at its Chattanooga, Tennessee plant to battery manufacturer Samsung SDI Co.

as of this year, the company said.

According to Chris Burns, the company’s CEO, the company hopes to increase production to 25,000 tons per year by 2025. “We have to go faster,” he said. “People will need it.”

Write to Ben Foldy at [email protected] and Rebecca Elliott at [email protected]