Next-Generation Battery Materials - Part 2: Unlocking the Future of Energy Storage
In Part 1 of this two-part series, we explored the factors influencing the battery materials space. Within this context a new wave of advanced materials and chemistries is emerging, promising to address challenges related to cost, performance, safety, and sustainability. Below, we explore key insights on next-generation battery materials and their potential to reshape the energy landscape.
Emerging Technologies and Startups
Silicon Anodes
Silicon’s theoretical capacity for lithium storage is ten times that of graphite, making it a promising material for higher energy density batteries. Companies like Sila Nanotechnologies have developed nanocomposite silicon anodes that mitigate mechanical stress caused by silicon’s expansion during charging. However, achieving cost parity with graphite remains a long-term challenge.
Sodium-Ion Batteries
Sodium-ion technology is gaining traction due to its affordability and safety profile, with companies like Natron Energy having raised substantial funding and leading commercialization efforts. While its lower energy density limits its use in high-demand applications like EVs, it shows promise in stationary energy storage systems and low-cost transportation solutions. The continually declining prices of lithium chemistries like LFP also threaten sodium ion batteries’ competitiveness.
Solid-State Batteries
Solid-state batteries are among the most researched alternatives due to their potential to enhance safety and energy density simultaneously, and are headlined by a number of larger players such as QuantumScape, Solid Power, and Factorial Energy. By replacing liquid electrolytes with solid ones, these batteries significantly reduce fire risks while maintaining compatibility with existing LIB infrastructure. However, commercial deployments of solid state batteries in passenger EVs, their primary target market, have not yet been achieved today.
Di- and Tri-valent Ion Batteries
Beyond lithium and sodium, researchers are exploring multivalent ions like magnesium, zinc, and aluminum for battery applications. These materials offer the potential for higher energy densities and improved safety due to their ability to transfer multiple electrons per ion. However, challenges remain in developing suitable electrolytes and electrode materials that can efficiently facilitate the movement of these ions. Despite these hurdles, companies such as ZincFive are actively working to overcome these limitations and unlock the potential of multivalent batteries.
Electrolytes, Separators, and Current Collectors
Innovations in electrolytes, separators, and current collectors are critical for improving battery performance and safety. Advanced separator materials, including ceramic and polymer composites, aim to improve thermal stability and prevent short circuits. Additionally, new current collector designs and materials are being explored to reduce weight and improve electron transport within the battery.
Binders and Additives
Binders and additives play a crucial role in maintaining the structural integrity and performance of battery electrodes. Traditional binders, such as PVDF, are being replaced with more sustainable and higher-performing alternatives. Additives are used to enhance various aspects of battery performance, including cycle life, rate capability, and low-temperature performance. Companies are focusing on developing novel binder-additive combinations to optimize electrode properties and extend battery lifespan.
Pangaea’s Perspective
From Pangaea’s standpoint, timing is critical when investing in next-generation battery technologies:
Early-stage startups, and particularly those innovating on novel active materials, face long commercialization timelines and substantial capital requirements, as evidenced by companies like Sila Nanotechnologies, QuantumScape, and Natron Energy, among many others.
Differentiation through technical innovation and team expertise is essential to compete against established players. Incremental improvements in performance are usually not enough to replace incumbent chemistries.
Markets that can afford to pay a premium for new technologies (such as drones, military, or medical technologies) may offer more immediate opportunities compared to mainstream automotive applications; however, startups need to be capable of diversifying beyond these niche early opportunities.
Companies innovating on materials such as additives and binders need to be relevant to a range of battery chemistries (or alternative markets) in order to reach meaningful scale.
Pangaea Ventures has assessed hundreds of battery technologies over its 25-year history in all of the aforementioned technology categories, and made investments in four companies (Cnano, ESS, Boulder Ionics and Envia). Through this experience we have grown to appreciate – despite the substantial market opportunities, fast-growing adopters, and transformative potential on a sustainable future – just how challenging it is to grow a successful venture-scale business in this space.
The Path Forward
The future of energy storage lies in the development of advanced battery materials that balance cost, performance, safety, and sustainability. While significant challenges remain, ranging from technical hurdles to geopolitical uncertainties, the potential for transformative impact is immense. As venture capital continues to fuel innovation in this space, collaboration between startups, governments, and industry leaders will be key to realizing the promise of next-generation battery technologies.
