Sila’s $1.4B Pentagon Loan Puts Battery Supply Chains in Focus

Sila has landed a $1.4 billion loan from the U.S. Department of Defense to expand production of its silicon-carbon battery material. The startup makes the material at its factory in Moses Lake, Washington. The funding comes as U.S. battery buyers, including automotive companies and defense contractors, look for battery materials made outside China.

Most lithium-ion battery anodes use graphite, and the supply chain for that material is dominated by Chinese companies. Sila is among the companies pursuing silicon anodes, which TechCrunch reports can store 20% to 40% more electricity than graphite anodes. That added energy density could support longer-lasting cells or smaller, lighter batteries, making the material relevant for drones, EVs, and defense applications.

Sila’s Moses Lake factory began operating in September and can currently produce about 2 gigawatt-hours of anode material annually. The company is working to expand the factory fivefold, enough to produce material for more than 100,000 EVs. In July, Sila raised $300 million for the expansion, led by Atreides Management and Sutter Hill Ventures, and has raised more than $1.5 billion from private investors, according to PitchBook.

Sila already has deals with Mercedes and Panasonic. The Pentagon loan could open the door to contracts with defense companies as militaries and contractors demand more battery capacity. Alongside Sila’s loan, the Defense Department announced a $400 million loan to Sunrise Energy Metals, a $150 million loan to Niron Magnetics, and an $85 million equity investment in Strategic Bauxite.