KEYNOTE – Silicon anode overview: US manufacturers and current state of the art

Sam Jaffe – Managing Director Carin Energy Research Advisors

0:00:04   Hi, My name is Sam Jaffe, a managing director and founder of Karen Energy Research Advisers spent
0:00:11   more than a decade in the battery industry and founded Karen Era about five years ago, and we do
0:00:19   mostly consulting and research, advisory services and market research in the battery industry. We do
0:00:28   quite a bit of forecasting, and we also do a lot of due diligence and technology assessment and
0:00:34   technology scouting as part of our suite of services to clients. So today I'm gonna be talking about
0:00:42   emerging silicon Anna Technologies, definitely the probably the most promising near term next in
0:00:53   battery material improvement over traditional lithium ion batteries. And I'll be talking about what,
0:01:00   what, why it's happening, what's happening, where it's happening and who it's happening with. So
0:01:07   before I go into the silicon part of the talk, I'd like to just kind of set the stage and create
0:01:12   some context around where what silicon is entering into. So our forecast. We forecast over 25
0:01:21   different battery markets, from cars to power tools to wearable consumer electron, ICS, etcetera,
0:01:29   and when you aggregate all of those up together, our number is that the industry produces about 184
0:01:36   gigawatt hours in 2020 that will grow toe almost a terawatt hour in 2025 then 22 terawatt hours or
0:01:46   more in 2030. So over a decade essentially will be seeing 10 x 11 x growth in the lithium ion
0:01:54   industry. Um, lithium lithium ion does a very good job for what it's designed for. It originally was
0:02:02   designed for consumer electron ICS. It's excels there. They figured out how to make it work in cars.
0:02:08   It excels there, and now they're they're they have and are continuing to improve upon stationary
0:02:16   storage for lithium ion. But of course, the the key metrics on lithium ion that still have to be
0:02:24   improved upon to thio really transform the entire global economy is number one, uh, cost. Of course.
0:02:34   Number two is essentially cycle life, making it a more durable battery. Andi, I would say three is
0:02:42   making the batteries lighter, lighter and less volume, and that's one of the reasons that why
0:02:48   silicon has the potential to be so important to the future of lithium ion. So in the in the in the
0:02:56   first area of price, our average blended price that automakers are paying battery manufacturers for
0:03:06   new orders of batteries for vehicles. Is that worried about $136 last year, and that's dropping down
0:03:14   to 120 this year. Eventually, that will drop down to $90 by 2030. And that's an average. So there's
0:03:21   gonna be, uh, there's gonna be producers that air selling their batteries for much less than that,
0:03:27   and much more than that on by the way, these air sell prices not packed prices. But if you get to
0:03:34   that $90 per per kilowatt hour cell price and let's say you have a large automotive pack of 100
0:03:40   kilowatt hours, $100 per kilowatt hour pack price is definitely conceivable. And just to kind of
0:03:47   assimilate that into your brain 100 bucks a kilowatt hour, that means that that pack, which would
0:03:53   give a big car, let's say, a 500 mile range, Um, that essentially cost $10,000. So it becomes it's
0:04:03   clear why that that level of price reduction leads to, um, price parity or maybe even better than
0:04:12   internal combustion cars. One of it. So what is this curve downwards? What is driving in number one.
0:04:21   It's materials. Materials have to get cheaper. Number two is manufacturing scale, and we're already
0:04:28   seeing the era of 50 gigawatt hour and above factories being built throughout the world. Um and I
0:04:37   think the one thing that has in common with both of those and lowering both of those costs is
0:04:47   improving the density of the battery. If you can have mawr energy stored in the battery for the same
0:04:56   amount of active material or less active material and more energy, you have a lighter battery and
0:05:04   the same could be said for volumetric energy density. Onda. How do you get there? Well, the
0:05:12   traditional approaches to improving energy density are making the cathode better. Making doing
0:05:20   alterations to the graphite. An ode, um, improving electrolytes, formulations that make a more
0:05:28   powerful and better battery. But we're essentially topping out in those traditional lithium ion
0:05:34   approaches. So now where do you go next? Mostly you go to the an ode getting a silicon, an ode or a
0:05:43   lithium metal. An ode is the goal of most researchers today. Um, and in this chart, what I'm talking
0:05:52   about here is our expectation of the acceptance the market acceptance of a number of new
0:05:58   technologies. So let's start at the bottom metal floor rides. That bottom Blue line is a Catholic
0:06:07   technology that requires a completely different electro chemical methodology called conversion, as
0:06:15   opposed to in Turkey. Elation. Thio Run the battery back and forth. Um, it's very promising
0:06:22   technology, very early stage from an industrial acceptance point of view. So we're essentially
0:06:28   saying that even by 2030 it's still gonna be in a very you know, we'll just start to see those and
0:06:35   produce batteries. Um, obviously there's There's a number of these that are much more advanced and
0:06:43   heading in the direction of commercialization, including putting more manganese in the cathode, Um,
0:06:50   including getting to lithium metal and hotels with solid state or other approaches. But
0:06:57   overwhelmingly, the most promising, uh, technical near term technology Thio that has the potential
0:07:05   and probability to reach mass market batteries is high penetration, silicon and nose. Now, these air
0:07:14   still going to be silicon carbon composites. It's not going to be 100% silicon, but in some cases
0:07:20   there it's going to get up to 50% silicon, 50% carbon.
0:07:28   Um, why do you want silicon batteries? Number one, You want it in there for you. Density Both
0:07:34   specific energy density and energy density itself. Um, it's gonna make a lighter and smaller battery
0:07:41   and if done, if done if done, if everything goes well, it should also make a cheaper battery because
0:07:47   you're using less material. Even if the silicon material is more expensive, then the graphite it's
0:07:53   replacing it has the potential to make the battery overall cheaper. Um, they're also knock on
0:07:59   effects of how silicon Liffe its that has the potential for fast charging, improving fast, charging
0:08:07   within a new electric vehicle.
0:08:12   Now we've known about silicon, and it's for decades, but we don't have them today. At least we don't
0:08:19   have high penetration rate. Um, because their fundamental physical problems number one fracturing,
0:08:27   meaning that you get expansion of the silicon material. It can grow as much as 400% and you get and
0:08:34   then and then it fractures and becomes unusable Particle. But it doesn't stop there you have S C I
0:08:42   formation issues. The lithium mining industry over the last 20 years, in my opinion, is the story of
0:08:50   that industry is learning how to make S C I form onto the anti particle. And when you put silicon in
0:08:58   there, it's a completely different process with completely different, uh, reactions and physio
0:09:05   chemistry and that part of our understanding of it is very, very at a very early stage. So even if
0:09:13   we can get the silicon in there, even if we can keep it from expanding or fracturing, we still have
0:09:20   this issue of how how do you How do you properly, uh, put a passive Asian layer on it? Um, the other
0:09:28   issue is delamination and these air kind of catch all terms. You could break these in tow five or 10
0:09:34   different sub problems within each of these three. But but let's let's just talk about it on a
0:09:40   higher level. But by delamination, I mean the silicon breaking off from the composite particle and
0:09:47   then becoming a rogue particle inside that battery that causes damage becomes inactive. Onda 10 Shal
0:09:54   causes side reactions. All three of these things are fundamental problems that the academia has been
0:10:02   working on for decades. Andi, this is a video ECM of a silicon particle. That's liffe ating. Um,
0:10:13   just to show physically how this is what what that fracturing looks like. So it swells up with
0:10:19   lithium. You can see it's starting to strain at the borders, and then it breaks open fractures in
0:10:24   multiple places. This, by the way, is from the Pacific Northwest National Laboratory on day.
0:10:29   Provided these images to us, um, Thio get a sense of what it really looks like inside the battery
0:10:38   eso. That's that's the bad news. What's the good news? Well, there's been a lot of progress. There's
0:10:45   a lot of different ways of trying to solve those three buckets of problems that I mentioned earlier
0:10:50   and over 30 startups are working on it, as well as a significant handful of large multinationals,
0:10:59   both on the car industry. In the chemicals industry. Everybody has been working on this, and a lot
0:11:03   of progress has been made. So here is another piano Nell in situ video of a silicon nanowires, which
0:11:10   is going to be a very pure form of silicon in a, uh, you know, in a cylindrical form. And you can
0:11:17   see the Liffey ation happening on the exterior of that Nana wire, and it's clearly a more orderly,
0:11:25   less damaging process. You still see that bend in there, which is not a good thing. But compared to
0:11:31   that previous video of complete explosion of the particle, this looks not too shabby. So progress
0:11:40   has been made and you can already see it in batteries today. So we now have batteries that have 3%
0:11:47   5% silicon in the node and most famously, the Tesla model three Battery has has probably about 3%
0:11:59   silicon oxide inside the note of that battery, and it's becoming more and more common for the
0:12:05   batteries of today to have that small amount. The more you put in, the more of those three problems
0:12:11   appear. But that's what the industry is moving toward higher, higher concentrations. And this is our
0:12:17   forecast of how those concentrations will play out, that essentially, we've got in the lower portion.
0:12:26   The blue is no silicon. It all, which is most batteries in the orange were saying that's the 5%
0:12:32   loading of silicon into the an ode such as the Model three battery Andan. The gray is thief 15%
0:12:40   silicon. So as you can see, it just keeps. We just keep adding more and more of the higher
0:12:46   concentration silicones until we start to get into the 25% silicones and starting in the 2026
0:12:54   timeframe as well as 50% silicones around starting in 2025 but really taking off towards the end of
0:13:02   the decade. This is our forecast for how these formulations will will appear over the next 10 years.
0:13:09   And if you take all of those forecasts together of the different formulations, this is where you end
0:13:14   up with as an average amount of silicon, in the end owed of the entire lithium ion stock that
0:13:21   essentially we're at 1% today that it will be will will get to around 3% in the next couple of years
0:13:30   and then see it that big boom happening around 24 25 when you start getting a lot of vendors that
0:13:37   will be producing batteries with higher amounts of silicon in them. In that 25% and and even in the
0:13:45   20 in the 50% range. Eso If you take all of those forecasts and figure out how much elemental
0:13:53   silicon goes into these batteries. We're talking about 2.5 2.5 1000 tons already most of that in the
0:14:03   form of silicon oxide. Um, although, keep in mind this is a measure here of the elemental silicon.
0:14:11   On by 2026 we get to 100,000 basically, and 20 3200 and 30,000 tons. So the silicon itself is going
0:14:19   to for the battery industry is going to become a major part of the overall battery material space.
0:14:30   Um, that previous start was looking specifically at, uh, how much elemental silicon. But of course,
0:14:38   the silicon does not come into the batteries in the form of elemental silicon. It comes in feedstock
0:14:44   materials. Either metallurgical silicon. Try Cloris I Lane or silent. And there's a few other
0:14:51   options too. But these were the three main ones that most of the people working on it now will be
0:14:56   using. Metallurgical was famous for Tesla's saying that that's where they're heading to use
0:15:01   metallurgical and then and then process it in a way that adds, ah, polymer coating to those little
0:15:07   Granules of silicon rock. Um, the trick Lloris island is a liquid that is extremely dangerous to
0:15:17   handle. And, um, it's gonna be used for a number of these proposed methods of making the silicon
0:15:25   material for the batteries. And then there's silent. Silent is a silicon hydrogen gas, which is also
0:15:34   extremely difficult. Toe handle Andi and needs to be safety engineered around. However silent is
0:15:45   commonly used in the photovoltaic industry in the semiconductor industry, so the industry knows how
0:15:50   to work with it. And in the long run, you're gonna want very pure materials. And that's where the
0:15:56   silent will come in. So we expect that by 2030 most silicon and nodes will be coming in from from
0:16:03   styling. And if you turn and turn that into the forecasts for just for silent, you're talking about
0:16:09   195,000 tons by 2030. So lastly, I just like to kind of go put this slide up there. It's gonna be
0:16:18   hard to see the slide, and it's it's difficult to go through it, but it just gives a sense of how
0:16:23   crowded this field is. And there's a number of companies I couldn't fit on this slide. So this this
0:16:29   is kind of a rough overview of some of many of the startups in the silicon field. And when I say
0:16:40   startup, it could be a 10 12 year old company like next season, which was kind of the first major
0:16:45   start up in this space. Or it could be a brand new company like Advanta, which recently raised. I
0:16:52   think it was about $20 million and is only about three years old. But clearly there's lots of
0:16:58   companies out there that are, um, that have their own solutions, their own patent portfolio and
0:17:06   their own approach to making this material. As I said, it's our opinion that this is coming. A
0:17:13   number of these companies will be successful. They will be selling a lot of material into the
0:17:18   battery industry. I don't wanna thio in this in this forum. I don't wanna pick winners and losers,
0:17:24   but just to kind of go through some of the major players that have raised a lot of money and are
0:17:29   clearly candidates to be successful in this space just very quickly. Starting with, let's say
0:17:36   innovate. Innovate is, uh, proposing a polymer film that will be, um, paralyzed along with some
0:17:45   silicon input material. Probably metallurgical, I think. And then it turns into the Silicon Carbide
0:17:53   material that's kind of embedded in this polymer film, which then becomes theano itself. Um, it's a
0:18:01   really interesting approach. They've They're doing a lot of interesting work both on the power cell
0:18:05   side and on the energy cell side, and they've raised quite a bit of money. Um, the most prominent
0:18:13   and farthest along company in the space is Seela Nanotechnologies. They've already raised over $300
0:18:21   million. And, um, Silla is proposing a very unique approach that involves essentially in a caged
0:18:31   particle of silicon with a carbon cage is probably the wrong term because it's kind of a soft shell
0:18:40   around a silicon yoke, and that shall allows lithium ions in. But no, none of the liquid
0:18:51   electrolytes. So it's ironically conductive but doesn't allow liquid in. And it's electrically,
0:18:57   electrically conductive. Of course, on gets an approach that it allows them to get too much higher
0:19:05   proportions of of silicon. So it is a true 50% silicon 50% carbon approach. Andi have made quite a
0:19:14   bit bit of progress. They are probably the closest to commercialization of all the major companies
0:19:21   in this space, um, and have been have been pretty successful so far. Um, just thio contrast that
0:19:29   with another major player here they're not listed here because they're not a startup. But Shin etsu.
0:19:34   They make most of the silicon oxide nanoparticles that go into the Tesla batteries and others.
0:19:41   That's a major chemicals company, multi billion dollar multinational that also is playing in this
0:19:47   field. So I'll stop there, appreciate you attending this this conference. It looks like a great
0:19:54   lineup to follow, and I look forward to seeing everyone else's thank you.