Sila secures $1.4B Pentagon loan to expand silicon battery-material plant

Battery-material startup Sila has landed a $1.4 billion loan from the U.S. Department of Defense to expand production of its silicon-carbon anode material, the company announced Friday. The loan arrives as U.S. battery buyers — from automakers to defense contractors — struggle to procure battery materials made outside of China, where the supply chain for graphite, the material used in most of today’s lithium-ion battery anodes, is concentrated.

Sila is among several companies, including Group14 and Amprius, pursuing silicon anodes instead. The material promises to store 20% to 40% more electricity than graphite anodes, an improvement that could pave the way for longer-lasting cells or smaller, lighter batteries — traits that appeal to both defense and mobility applications such as drones and electric vehicles.

Sila makes its silicon-carbon material at a factory in Moses Lake, Washington, making it one of the few sources of anode material not encumbered by tariffs or geopolitical concerns. The factory began operating in September and, at its current size, can produce about 2 gigawatt-hours of anode material annually. Sila is working to expand the Moses Lake plant fivefold, which would let it produce enough material for more than 100,000 EVs.

In July, Sila raised $300 million, led by Atreides Management and Sutter Hill Ventures, to help fund the factory expansion. The company has raised more than $1.5 billion from private investors to date, according to PitchBook. Sila has already lined up deals with Mercedes and Panasonic; the new Pentagon loan could open the door to contracts with defense companies, which have been landing large deals as wars in Iran and Ukraine drag on.

Alongside the loan to Sila, the Department of Defense also announced deals with three other companies: Australian miner Sunrise Energy Metals will receive a $400 million loan to mine scandium, a rare-earth element used in lightweight alloys; Minnesota-based Niron Magnetics landed a $150 million loan to manufacture rare-earth-free magnets for smartphones, missiles, and electric motors; and Strategic Bauxite, which mines an aluminum-bearing mineral, received an $85 million equity investment from the government.

Why it matters

The Pentagon’s push to fund domestic battery-material and rare-earth production reflects Washington’s effort to de-risk defense and EV supply chains from Chinese-dominated inputs, giving startups like Sila a path to scale that doesn’t depend on venture capital alone.