US battery start-up bets on Germany amid fears over Chinese dominance

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A US battery start-up aims to begin producing silicon in Germany, as the company bets on rising demand from the country’s car industry for technologies that cuts its reliance on China.

Washington-based Group 14 has bought Mittelstand company Schmid Silicon Group and plans to revive its idled silane gas plant “as soon as possible” to start making next-generation battery materials.

Its pitch is to replace all or part of the graphite in the negatively charged anode of a battery, increasing the potential appeal of the still untested technology to companies seeking ways around China’s near monopoly of graphite production.

“Our biggest investors are the German auto companies,” said Rick Luebbe, founder and chief executive of Group 14, which is backed by Porsche and has been granted $100mn by the US government to help boost the country’s battery supply chains. “They also want domestic supply chains [of battery materials],” he added.

Rising tensions between China and the US, and the increasing number of exports controls between the two world’s superpowers on key technology and raw materials, has spurred western companies to look at diversifying their supply chains away China.

European carmakers are particularly vulnerable, as the looming EU ban on combustion engine vehicles is forcing incumbents to replace technology that they pioneered with batteries that are largely powered by raw materials and innovations from China.

China has a stronger grip on global graphite production than on lithium, cobalt and nickel, the raw materials used in a battery’s positively charged cathode. According to Benchmark Mineral Intelligence, China controls all of the world’s processing capacity for battery-grade graphite from mined materials.

“Both the US and EU are recognising that batteries are of economic strategic importance — so having such a big reliance on another part of the world is a risky strategy,” Luebbe said.

Battery experts say that replacing graphite with silicon in the anode would enable fast charging and increase the range of an EV significantly.

Critics of the silicon-based technology say it faces several challenges, including expanding and contracting upon charging, which can cause the battery to die quickly.

“Silicon dominant technologies are a few years away from commercialisation,” said Rory McNulty, an analyst at Benchmark Mineral Intelligence. “Cost is one of the big questions hanging over silicon if it can compete with graphite.”

But Luebbe argued that silicon-based batteries would bring additional benefits, including on emissions. According to a sustainability report from Tesla, the emissions released in producing graphite rank second only to nickel among the raw materials used in battery technology.

When Porsche acquired a stake in Group 14 last year, the German carmaker said the plan was for the US company to help produce batteries used in Porsche electric vehicles. The sports car maker has said it intends to use Group 14’s technology in “electrically powered Porsche vehicles with high-performance drivetrains”.