Pentagon lends $1.4 billion to Sila for silicon-carbon anodes

Sila has secured a $1.4 billion loan from the US Department of Defense to expand production of its silicon-carbon battery material, TechCrunch reports. The financing is aimed at scaling output at Sila’s factory in Moses Lake, Washington, as the company tries to meet demand from automotive and defence buyers who are seeking battery materials not made in China.

Most lithium-ion batteries today use graphite anodes, a supply chain dominated by Chinese companies. Silicon-based anodes are being pursued as an alternative because they can store more energy than graphite—TechCrunch cites estimates of roughly 20% to 40% higher capacity—potentially enabling longer-lasting cells or smaller, lighter battery packs. Those are the same traits that matter in two markets now competing for the same upstream materials: electric vehicles and a rapidly expanding set of military applications, including drones.

Sila’s Moses Lake plant, which began operating in September, is described as one of the few sources of anode material outside the tariff and geopolitical risks tied to China. At current capacity it can produce about 2 gigawatt-hours of anode material annually; Sila plans to expand the facility fivefold. TechCrunch reports the expanded output would be enough material for more than 100,000 EVs, a scale that turns a specialised materials plant into something closer to critical infrastructure for downstream manufacturers.

The Pentagon loan arrives on top of private capital already raised for the same build-out. In July, Sila raised $300 million in a round led by Atreides Management and Sutter Hill Ventures, and the company has raised more than $1.5 billion from private investors in total, according to PitchBook. The company also has deals with Mercedes and Panasonic, and TechCrunch suggests the new federal loan could help Sila secure contracts with defence companies.

The Department of Defense announced other financings alongside Sila’s, including a loan to Australia’s Sunrise Energy Metals to mine scandium, a loan to Minnesota-based Niron Magnetics to manufacture rare earth-free magnets, and an equity investment in Strategic Bauxite. Taken together, the package maps a procurement problem in reverse: rather than buying finished goods, the US government is paying to reshape the supply chain for the materials that sit inside them.

Sila’s expansion plan is now tied to a lender that can wait out a cycle and set strategic priorities that venture capital cannot. The loan announcement did not change the physics of battery manufacturing, but it did change who absorbs the risk if the factory ramp slips.