Porsche joins $400M bet on lithium-silicon batteries to juice up future EVs

Porsche has read the room.

With its first electric vehicle now outselling the quintessential 911 sports car, the German automaker is responding by upping its bet on EVs, in part via a hefty investment in lithium-silicon battery developer Group14 Technologies.

Porsche injected $100 million into Group14 as part of a larger $400 million Series C funding round. Other investors that chipped in include Canadian pension fund OMERS, Decarbonization Partners, private equity firm Riverstone, Vsquared Ventures and Moore Strategic Ventures.

Group14’s key technology is a silicon-carbon powder that can either replace or augment graphite anodes. Graphite is used in most of today’s lithium-ion batteries, and it’s a sensible anode because it’s stable and can store a reasonable amount of energy.

Yet as automakers push for higher energy densities, graphite is being pushed up against its limits. Silicon is an attractive alternative since it’s able to hold far more lithium — theoretically up to 10 times more. But that same benefit is also the silicon’s Achilles’ heel. Because silicon absorbs so much lithium, the molecular-scale expansion and contraction can degrade the anode’s structure, leading to premature failure.

Group14 is one of many startups racing to develop silicon-based anodes that can be repeatedly charged and discharged without breaking down. To do that, the company infuses a porous carbon scaffold with a silicon-containing gas. The end result is a carbon compound that’s peppered with nanoscale silicon particles. Those particles serve to grab hold of lithium ions while the carbon scaffold serves as a stable structure so the anode doesn’t decompose as it’s used.

Group14 says that its carbon-silicon material can be blended with graphite anodes, too, and that it can be dropped into an existing battery production line with few modifications.

The startup claims that its SCC55 material can store 50% more energy than traditional graphite anodes. It has one battery materials plant online currently and has two more in the works, one a joint venture with SK Group that's coming online later this year and another that'll start producing in 2023. Group14 appears to be targeting production for Porsche battery packs in 2024.

For an automaker like Porsche, which built its reputation on lightweight, high-performance sports cars, the prospect of a smaller and more powerful battery must be appealing.

Advancing battery tech is key to decarbonizing the auto industry, which accounted for 9% of global greenhouse gas emissions in 2018, per Greenpeace. Yet, this potentially beneficial deal does little to wipe away the dirty track record of some of Group14’s investors, a few of whom are prolific fossil fuel backers.

Decarbonization Partners, for example, is a joint venture between BlackRock and Temasek. The pair has backed some intriguing, sustainability-focused firms such as mushroom leather startup MycoWorks, yet BlackRock also recently pledged to “continue to invest in and support fossil fuel companies.” The $97.3 billion investing giant has a tendency to talk out of both sides of its mouth. OMERS’ portfolio also includes several crude oil and gas ventures, though the pension fund has promised to reach net-zero emissions across its investments by the distant year of 2050.

For Group14, the new deal represents a big step up — by nearly a factor of 10. Prior to the raise, the Woodinville, Washington-based startup had reportedly secured a combined $41.5 million or so in venture dollars and government grants.