Panasonic signs US silicon supply deal

The Panasonic Energy battery unit of the Japanese conglomerate has signed a deal to buy silicon anodes from US start-up Sila as it looks to strengthen its North American supply chain.

Panasonic will procure the silicon material from Sila’s manufacturing facility in Washington state and transport it to its two battery plants in Nevada and Kansas.

“This partnership represents a significant milestone for Sila, our customers, and the industry at large, and will be key to accelerating consumer EV adoption,” says Sila CEO Gene Berdichevsky.

The use of silicon is key to improving battery performance, as it has up to ten times the capacity of graphite — the material most commonly used in the current production of lithium-ion battery anodes. However, silicon has tendency to expand during charging, leading to a degradation of battery performance.

This tendency has been a longstanding barrier to widespread adoption of the material in battery manufacture.

But Sila produces a high-performance silicon material that suppresses expansion. The material can deliver a 20pc increase in range today, according to the firm, and has the potential to double those gains.

“By integrating Sila's groundbreaking battery material with our advanced cell manufacturing capabilities, we believe that we can address the concerns such as range anxiety and charging time and contribute to accelerating the adoption of EVs,” says Shoichiro Watanabe, EVP at Panasonic Energy.

The replacement of graphite with silicon has the additional benefit of reducing reliance on overseas supply chains. China is the world's top graphite producer and earlier this month tightened its criteria for exports.

Panasonic Energy — the largest battery manufacturer in North America and a key supplier to US EV pure play Tesla — says it plans to further expand its silicon procurement network in North America as it looks to take advantage of tax credits under the Inflation Reduction Act.

Vehicles are ineligible for the credits if they contain part of materials that are sourced from China or if Chinese-controlled firms are in their supply chains.

Last year Sila received $100mn from the US Department of Energy to fund the build-out of its facility in Washington and scale manufacturing of its silicon anode materials.