Sila has landed a $1.4 billion loan from the U.S. Department of Defense to help the U.S.-based startup expand production of its silicon-carbon battery material.
The loan, which was announced Friday, arrives as U.S. battery buyers, from automotive companies to defense contractors, struggle to procure battery materials that are made outside of China. Most of today’s lithium-ion battery anodes use graphite, and the supply chain for the material is dominated by Chinese companies.
Many companies, including Group14 and Amprius, are pursuing silicon anodes. The material promises to store 20% to 40% more electricity than graphite anodes. The improved energy density could pave the way for longer-lasting cells or smaller, lighter batteries. Both are appealing traits for defense and mobility applications, including drones and EVs.
Sila makes its silicon-carbon material at its factory in Moses Lake, Washington, making it one of the few sources of anode material that isn’t encumbered by tariffs or geopolitical concerns.
The factory began operating in September and, at its current size, can produce about 2 gigawatt-hours of anode material annually. Sila is working to expand its Moses Lake factory fivefold, allowing it to produce enough material for more than 100,000 EVs.
In July, Sila raised $300 million to help fund the factory expansion. Atreides Management and Sutter Hill Ventures led the round. To date, Sila has raised more than $1.5 billion from private investors, according to PitchBook.
Sila has already lined up deals with Mercedes and Panasonic. The new loan from the Pentagon could open the door to contracts with defense companies, which have been landing massive deals as wars in Iran and Ukraine drag on.
Alongside the loan to Sila, the Department of Defense also announced deals with three other companies.
Sunrise Energy Metals, an Australian company, will receive a $400 million loan to mine scandium, a rare earth element that’s widely used in lightweight alloys. Niron Magnetics, a Minnesota-based company, landed a $150 million loan to manufacture new rare earth-free magnets for smartphones, missiles, and electric motors. Lastly, the government made an $85 million equity investment in Strategic Bauxite, which mines a mineral that contains aluminum.
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