The anode problem: Why the battery supply chain is America's bigger rare earth moment

When China tightened rare earth mineral exports last year, it sent a jolt across American industry and through Washington. Suddenly, everyone was asking the same question: how dependent are we, and on what?

It was a fair question. But it may have been the wrong material to fixate on. Battery-grade graphite — the anode material inside almost every lithium-ion battery — is more geographically concentrated in China than rare earth refining is. That means nearly every electric vehicle, consumer device, drone, and grid storage system running on a lithium-ion battery sits on top of a supply chain the U.S. does not control.

We didn't set out to solve that problem. We set out to build a better anode. But the two problems are now inseparable.

The anode is one of the two electrodes in a lithium-ion battery. For 35 years, graphite has been the anode material of choice. It works. It's cheap. And almost all of it is processed in China.

Sila's silicon carbon (Si/C) anode replaces graphite. Silicon anodes are five times lighter than graphite and take up half the space. The result: batteries with 20 to 40% higher energy density, charging speeds that are roughly two times faster, and performance improvements that carry across every application where lithium-ion batteries are used — from wearables to EVs to satellites to drones.

Sila’s material and manufacturing technology is protected by more than 250 patents and is featured in our production facility inMoses Lake, Washington — the first automotive-scale silicon anode plant in The West.

The defense case for better batteries is direct. Drones are the clearest example. Range and payload capacity determine a drone's operational value. A battery that is 20% lighter translates into substantially longer flight time or a meaningfully larger payload. In a conflict where thousands of drones are deployed daily, that margin is not incremental. It is decisive.

The same logic applies to systems worn by service members. Troops carry multiple battery packs. If better energy density means carrying three packs instead of four and achieving the same mission, that is a meaningful operational improvement, not a spec sheet novelty.

The defense sector alone cannot sustain a domestic battery materials industry. The production volumes are too small, and small production means limited R&D reinvestment, higher costs, and technology that falls behind. The commercial markets — EVs, consumer electronics, robotics, data centers — can sustain a domestic battery materials industry. They fund the continued improvement that keeps the technology relevant for every application, including defense.

The policy environment has shifted in ways that matter for the upstream supply chain. FEOC rules under the IRA create real incentives to source battery components domestically. New NDAA drone provisions require U.S.-produced components within the next two years. Tariffs have changed the calculus for auto OEMs, many of whom are now actively seeking North American upstream supply at varying cost premiums.

These are signals supportive of the need for a domestic supply chain. 

The U.S. has made meaningful progress on cell manufacturing over the last several years. Nearly a dozen battery gigafactories have come online. What has lagged is the upstream — the materials that go into those cells. That is a gap that needs to close.

Our Moses Lake plant is one part of closing the gap. The first phase of our plant is operational. Our next expansion, at roughly 25 gigawatt-hours equivalent capacity, establishes a self-sustaining domestic silicon anode industry.

The rare earth minerals moment was a warning. The anode supply chain has the same vulnerability, in a larger, faster-growing market. The good news is that unlike rare earth minerals, there is an alternative material — one that is better in every measurable way, and one that can be manufactured in the United States.

That is what we are building.