PS: Another Electric, let me know if you have access. Enovix is...

PS: Another Electric, let me know if you have access. Enovix is doing well and I like watching them and Sila as an inkling to market cap valuation we can get. Also think you are aware that Lilac got 100m Round B. Given that I think 150m+ for us is cake. FWIW, the current North American DLE plays are Standard-mc 1.2 billion, Compass is working on Great Salt Lake in Ogden, Utah and divesting South America, more mature. And E3 metals in Alberta- Chris Doornboos and Alex Grant seem to be friends and have certainly written papers together. I have a small postion. MC 85m. Each of these projects is very bespoke and E3 has University, Provincial Govt, and DOE grant I believe. Steve Pomrintz is too Florida fake it til' you make it, oversell for me(though I made money) but of course he could make it... Not worried about the silicon dopers at least until 2025, then reassess. But plenty of pie. Cheers


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These Startups Are Reconfiguring the Lithium-ion Battery. Their Aim Is to Beat China.

Dan Blondal, CEO of Vancouver battery company Nano One Materials, doesn’t look or sound like the type to throw around threats, but when it comes to China, it’s another matter. Blondal has declared a North American commercial war on Beijing and its control of the lithium-ion battery supply chain on which the U.S. and Canada rely.

About 1,000 miles to the south, in Fremont, Calif., Cameron Dales, the cheery general manager and chief commercial officer of battery company Enovix, has done the same. He says that stealing a march on China is Enovix’s “whole plan.”

What Blondal and Dales share is more than just resistance to China’s towering dominance of a lithium-ion economy that powers everything from mobile devices to electric vehicles. They are trying to undermine it with new technologies that they say could eclipse the standard battery formulations and manufacturing methods that give China its market power.

They are not alone. A notable part of the Western battery industry is working furiously on technological advances that, if even a small number succeed, could change the balance of power in the lithium-ion world. They would not necessarily destroy China’s edge, but victory could be declared if they merely render it less threatening. The stakes are trillions of dollars a year in expected revenue to equip EVs over the coming decade and beyond. (Below are short profiles of four of these companies.)

A large part of the rap against China is based in envy. For the last dozen years, while the U.S. and European auto industries and their governments largely ignored EVs and batteries (the exception being Tesla), Chinese leaders pushed their companies to travel the world and sign long-term contracts for battery metal supplies, built up local refiners to turn the raw metals into battery materials, and subsidized battery and EV researchers and manufacturers.

China today controls 70% of the world’s lithium supply, and it produces 61% of the battery cathodes and 83% of the anodes, according to SAFE, a Washington, D.C., clean transportation advocacy firm. China also produces almost the entire world supply of lithium-iron-phosphate, which is fast becoming the battery cathode formulation of choice. Much of the LFP is produced by China’s Contemporary Amperex Technology, the world’s largest maker of lithium-ion batteries.

But the gripes are also born of competitive frustration. Executives at U.S. startups tell me that to research a battery advance, they are likely to order the materials from China, because that’s where the best and least expensive stuff is made. As Europe tries to create an independent lithium-ion battery industry, it’s often Chinese companies like CATL, Envision Group and SVolt Energy Technology that are building the gigafactories, since they have the know-how.

This is the chokehold that Blondal sees—and that he is trying to bust. “We believe we can make a fully differentiated North American supply chain that cuts costs and is an alternative to importing from China,” he told me.

Traffic Problem

A big chunk of the most interesting battery startups I have run across are attempting to fix what I’ll call a traffic problem that occurs between the battery’s two electrodes. These are the cathode, made of elements such as nickel, manganese or iron, which acts as the staging point for the lithium, and the graphite anode. When you charge up your EV (or your iPhone), the lithium ions flow out of the cathode and into the anode. When your battery is full, that means the lithium is now mostly in the anode. When you start to drive (or unplug and use your phone), the lithium flows back to the cathode and is on its way to leaving the anode empty.

But numerous things go wrong in this shuttling process: The anode typically won’t admit the ions as fast as they arrive, causing them to pile up at the door. This pileup turns into a permanent layer of effectively dead ions that make the anode even more closed to still-arriving lithium. A similar traffic problem happens when, on charge-up, the ions make the return journey to the cathode. Trying to make their way inside, the lithium finds no clear pathway, but instead a disorganized amalgam of metals.

Several companies are attempting to untangle this lithium-ion mess. Others are bringing the first fundamentally new cell chemistry into commercialization after decades of industry failures to do so. Still others are proposing ways to change the battery supply chain entirely.

Enovix

What it does: This Fremont, Calif., company makes anodes entirely of silicon. Its first market is smart watches, and it says it plans to expand into smartphone and EV batteries. It expects to start selling its anodes in the first quarter of next year. Enovix went public in July via a reverse merger that raised $405 million. Shares have fallen 11% since their public listing, lowering its market cap to $2.3 billion.

For years, battery- and auto-makers have wanted to swap out the graphite anode, the one part of the battery that effectively has not changed since lithium ion’s commercialization three decades ago. Silicon, which can increase the energy density of the battery by about 20% and some say more, has been considered a primary candidate.

But, apart from minuscule slivers sprinkled into Tesla and some other batteries, silicon has failed to make it into the lithium-ion market. There are two main reasons: When they are filled with lithium after discharge, silicon anodes swell up to four times their usual size. This creates high stress and the battery can fracture. Second, the lithium traffic jam at the entry to silicon anodes is especially pronounced and can result in the loss of up to half the lithium as it turns into a thick layer of permanent buildup around the electrode.

A vexing thing about the silicon expansion is the pressure behind it—some 1,700 pounds per square inch of force pushing out, making it very, very hard to hold back. A small number of companies say they have resolved the issue, allowing for the use of anodes containing up to 50% or more silicon, typically combined with carbon.

Enovix, however, says its anodes are 100% silicon, giving it an even larger energy punch. Enovix CEO Harrold Rust said the company has solved the pressure problem by stacking the electrodes on top of one another rather than rolled up in a flattened “jelly roll,” as is conventionally done. Then the stack is flipped on its side, channeling the silicon expansion to the cell’s narrow end, rather than its length. That massively reduces the surface area that experiences the pressure and reduces the force to 210 pounds, said Chief Technology Officer Ashok Lahiri.

To handle the reduced force, Enovix sandwiches the entire electrode stack between two 100-micron-thick steel bands. As a result, Enovix says, its batteries expand less than 2% and are cycling 540 times without cracking. “It’s like setting a can on its end,” Lahiri told me.

The battery’s engineering also compensates for that 50% of lost lithium from the first-cycle traffic jam. Right after the first charging cycle but before the second, the lithium in the anode is topped up to between 92% and 95% of capacity. In industry parlance, this is called “prelithiation,” but I have never run across Enovix’s method of doing so: It places a layer of lithium foil along the side of the electrode stack. At the right moment, the lithium foil is electrically connected to the battery, causing the lithium to be absorbed into the anode.

“Their tech stands up,” said Sam Jaffe, managing director of Cairn Energy Research, a battery consultant firm, though he thinks Enovix’s commercial application will be limited to wearable electronics, at least for now.

EnPower

What it does: This early-stage Phoenix-based company engineers the structure of existing anodes and cathodes to fix the traffic problem. Its solution is the creation of superhighway lanes between and into the electrodes, thus imposing a fixed structure on them. It has raised $12 million in funding, according to CEO Annette Finsterbusch, and has plans for commercialization in military drones, buses and delivery vans in 2023 and 2024.

Adrian Yao, co-founder and CTO, said the traffic problem is that the electrodes comprise disordered material compressed onto a current collector, with very little in the way of entry pathways. So the lithium saturates the near side of the electrodes and often can burrow almost no further.

In response, Yao has engineered two-layer electrodes with fixed paths, allowing the ions to move well into the electrodes and to shuttle between them at a much higher rate. In batteries, that faster shuttling adds up to power—it is the action that goes on inside the battery when you press the accelerator down hard in your EV and it takes off fast.

But it turns out that the engineering wasn’t the hard part. Yao said the greater challenge is producing the electrodes at high speed and with limited rejects. This is what the company will be attempting over the next three years, scaling up production in steps to 1 gigawatt-hour in 2024.

Addionics

What it does: This early, conceptual stage Tel Aviv-based startup is also attempting to tackle the traffic problem. Its solution is to replace what CEO Moshiel Biton calls the “dumb” conventional flat metal substrate of current electrodes with a porous, three-dimensional metal structure. It has raised $9 million in funding, according to Biton.

Once it has made the metal structure, Addionics proposes then layering the cathode or anode slurry on top. The slurry would flow into the pores, creating a single, embedded 3D electrode. This fixed structure, Biton said, would allow the lithium ions to shuttle much more freely between the electrodes. He said the battery would also be safer because heat would be dissipated throughout the structure rather than building up in pockets. “It’s well known that the physics are the next revolution—engineering at the cell level,” Biton said.

Nano One

What it does: This Vancouver-based company describes its main product as “one pot”—a new method for processing battery metals and creating electrodes that cuts out major steps in the process. It has been publicly traded since 2015 and is listed in Canada and in the U.S over-the-counter market. But like virtually all the battery startups to go public recently, it has yet to produce revenue. Its shares are down 38% this year.

In the laborious current process, cobalt, manganese and nickel—essentially all the battery metals—are purified and converted into metal sulfates, CEO Blondal said. These sulfates are then shipped off to another factory, where the process is reversed—workers remove and dispose of the sulfates, leaving just the metals behind. They now mix the metals with lithium, cook the result in a furnace, and ultimately produce the cathode powder that goes into the battery. Much of this occurs in China, which far and away has the majority of global capacity for processing battery metals.

This sulfate conversion and removal, in addition to the rest of the processing, is costly: The battery is up to 40% of the cost of an EV, the cathode is up to 40% of the cost of the battery, and refining and a thin profit margin are 50% of the cost of the cathode. Why is it done this way? Partly because it works. The rest is simply custom. “It’s historic,” Blondal said. “It’s well understood.”

Nano One proposes instead skipping the sulfate step and not sending anything to China at all. Right in factories in the U.S. and Canada, it would put all the metals and lithium into a single reactor vessel—the "pot." The resulting mixture becomes a salt, which goes into a furnace and ultimately turns into the cathode powder. “I’m a big fan of the work Nano One [is] doing, mainly because it offers the opportunity to reduce the manufacturing cost of cathodes,” said James Frith, head of storage energy at BloombergNEF, a clean energy research firm.

The Takeaway: It is not clear to me to what degree the talk of “beating China” is genuine or simply good politics as nationalism continues to divide the global economy into U.S.- and Chinese-led economic spheres. The economic rationale for lithium superhighways stands on its own merits and does not need a geopolitical basis to make sense. Meanwhile, we are watching a moving picture—Chinese companies such as BYD and CATL are among the most innovative in batteries and are making their own important advances at the same time as the Western companies.

But the race is inescapable. It is making what seems today like cutting-edge battery technology quickly passé. Cheaper and innovative LFP formulations are fast pushing aside nickel-manganese-cobalt cathodes, as I have written. Most or all EV batteries are going to be forced to undergo a new test—whether they can last 1 million miles or more. And now we can expect electrodes to be reengineered. “Everyone is fixed on how it’s done today,” said Blondal. “If we continue on this road, we are going to be competing with China exactly how they do it. There’s a better way.”"