Porsche Leads $400 Million Investment in Lithium-Silicon Battery Developer Group14 Technologies

New electric vehicle battery chemistries in development are designed to improve traditional lithium-ion batteries will offer higher energy density and less risk of overheating, allowing automakers to build safer electric vehicles with longer ranges and more power.

The pursuit of new battery technologies by the world's automakers has prompted Porsche to lead a $400 million investment round in Group14 Technologies, a global manufacturer and supplier of advanced silicon-carbon technology for lithium-silicon batteries. 

The lead investment by Porsche Ventures was announced on Wednesday. Porsche Ventures is the venture capital arm of the sports car manufacturer.

The investment from Porsche boost Group14's valuation to over 1$ billion.

Also participating in the round was OMERS Capital Markets, Decarbonization Partners, Riverstone Holdings LLC, Vsquared Ventures, Moore Strategic Ventures, and other large institutional investors. 

Group14 says its next-generation silicon-based battery anode materials will help deliver 50% higher performance than traditional lithium-ion batteries, eliminating range and charge anxiety. Replacing graphite anodes with inexpensive and abundant silicon can boost energy density of a battery by up to 10x. 

As automakers around the world transition to electric vehicles, OEMs are turning to lower cost, lithium-silicon technologies, which are fully compatible with existing battery manufacturing lines. The technology may lead to electric vehicles costing around the same as internal combustion models, which could help spur widespread EV adoption.

A typical EV battery costs roughly $156 per kWh to produce, according to data from BloombergNEF which tracks industry production costs. Although this price has dropped considerably over the past decade, at this price, a typical 75 kWh EV battery costs around $11,700, which is why electric vehicles cost so much more than internal combustion engine vehicles.

The goal for the industry is to bring down production costs to $100 per kWh or less, which is widely viewed as the point where an electric vehicle will cost about the same to produce as an internal combustion engine vehicle.

Group14 plans to break ground on its second commercial-scale Battery Active Materials (BAM) factory in the U.S. to stay ahead of demand for high-performing EV batteries to deliver to customers, including Porsche subsidiary Cellforce Group, which is the battery joint venture between Porsche and GErman battery manufacturer Customcells. The aim of the joint venture is to research and develop advanced battery cell chemistries for electric vehicles.

"Our investment in Group14 is an important step for Porsche's M&A activities," said Lutz Meschke, deputy chairman and member of the executive board of Finance and IT at Porsche AG. "We have been actively investing in ambitious companies since 2016 and through our venture capital unit Porsche Ventures, we have gained a deep understanding of the venture capital world and are excited to lead this round."

Over the past year, Group14 launched a commercial-scale BAM factory in the U.S. The company also broke ground on a joint venture factory with SK Group in South Korea to manufacture silicon-based batteries for EVs, aviation, consumer electronics and other applications. 

Group14 is poised to accelerate delivery of its mass-market with its drop-in ready silicon anode material called "SCC55".  The silicon-based anode coatings can be applied using the current lithium ion battery production process, making it possible to scale the technology using existing battery manufacturing lines.It's capable of turning any gigafactory into a 1.5GW facility overnight, according to the company.

SCC55 has five times the capacity and 50% more energy density than conventional graphite for Lithium battery anodes. Just a 20% blend of silicon boosts energy density of a battery by 30% over 1,000 cycles, according to Group14.

In addition, its unique hard carbon-based structure keeps the silicon in the most ideal form, which is slightly porous. Traditional graphite anode materials in EV batteries have a tendency to swell while being charged, which can eventually lead to damage to the battery cells and shorten a battery's service life. However, silicon-based anode materials are porous enough to accommodate this expansion, thereby preventing damage to the cells. 

The result is a silicon anode material that exhibits outstanding first cycle efficiency and long life.

"Group14 is well-positioned to elevate all batteries by enabling the transformational performance of silicon in today's lithium-ion and tomorrow's solid-state applications," said Group14 co-founder & CEO Rick Luebbe. "With incredible support from a consortium of strategic and institutional investors led by Porsche that believe in our vision and roadmap, we can continue to advance the batteries that breathe life into the electrification of everything."

Other companies are also working on the development of similar silicon-anode batteries for automakers, including Sila Nanotechnologies and OneD Battery Sciences.

Porsche is committed to electrifying its model lineup. The automaker announced in March at its annual press conference that it aims for 80% of its vehicles to be fully-electric by 2030.

Porsche's electrification plans come as the automaker reached a new all-time high in both sales revenue and operating profit in 2021, despite the challenges of the pandemic. 

Porsche intends to use its cash to fund its future, which includes the development of electric versions of its most popular sports cars, including the 718, which is set to debut in 2025.