Pentagon Backs Sila With $1.4B Loan to Scale Silicon-Carbon Battery Production and Break China's Grip on Anode Supply

On August 7, 2026, the U.S. Department of War's Office of Strategic Capital (OSC) announced a conditional loan commitment of up to $1.4 billion to Sila Nanotechnologies to scale domestic production of silicon-carbon anode material and lithium-ion battery cells, part of a broader $3 billion government push to break China's dominance in critical mineral and battery supply chains . The Department of War's OSC signed the conditional loan commitment directly, and the funding is intended to expand Sila's Moses Lake, Washington silicon-carbon anode facility and support the buildout of a lithium-ion battery cell manufacturing plant . The loan is conditional on Sila satisfying financial, legal, technical, and other requirements before definitive financing documents are signed .

Sila's Moses Lake Factory & Production Capacity

Sila's manufacturing facility in Moses Lake, Washington, began operations in September 2025 and currently produces about 2 GWh of anode material annually -- enough for roughly 20,000 to 50,000 EVs depending on the application . The Moses Lake site spans 160 acres and is the first-of-its-kind silicon anode plant engineered for scale .

Sila plans to use the $1.4 billion DoD loan, combined with private capital, to fund a fivefold expansion of the Moses Lake factory, targeting enough anode material for over 100,000 EVs per year . The company has stated a longer-term vision of scaling up to 250 GWh annual capacity within five years, which would make it the world's largest anode production facility . The expansion would increase production from its initial 2 GWh Phase 1 capacity to as much as 250 GWh over five years .

$300 Million Private Raise (July 2026)

On July 21, 2026, just weeks before the Pentagon loan announcement, Sila raised $300 million in private funding led by Atreides Management and Sutter Hill Ventures, with participation from existing investors . The capital is being used to accelerate production of Sila's silicon-carbon anode material, marketed as Titan Silicon, and support the Phase 2 expansion at Moses Lake . The company had already been developing the material for the last 15 years .

Customer Deals: Mercedes and Panasonic

Sila has previously announced deals to supply its silicon-carbon anode material to Mercedes-Benz and Panasonic Energy . Mercedes-Benz announced in November 2025 that it will incorporate Sila's silicon anode chemistry into batteries for the electric G-Class, achieving cell-level energy density exceeding 800 Wh/l . Panasonic Energy signed a commercial agreement in December 2023 to purchase Titan Silicon for next-generation EV batteries .

Energy Density Advantage of Silicon Anodes

Silicon anodes promise 20%–40% higher energy density compared to traditional graphite anodes . Sila's own materials state that Titan Silicon delivers a 20% energy density boost over the industry's best graphite cells, with a development path to 40% improvement . For EVs, this translates to roughly 20% more range without increasing battery pack size . The higher energy density also enables smaller, lighter batteries and ultra-fast charging capability . Sila's material uses nano-composite silicon that suppresses expansion during charging, a longstanding challenge of using silicon in anodes .

Broader Strategic Context

The loan is driven by the U.S. military and EV industry's urgent need for non-Chinese battery supply chains. China currently dominates global anode production. The DoD explicitly aims to secure domestic sources for drones, autonomous vehicles, and other defense applications . Sila's Moses Lake factory produces tariff-free U.S.-made material, giving buyers a China-free alternative . The Department of War stated the loan "executes on President Trump's mandate to aggressively onshore critical materials to enhance America's defense industrial base" .

Three Other Government Critical-Mineral Deals Announced Alongside Sila's Loan

President Trump announced these OSC-backed conditional loans on August 7, 2026, totaling approximately $2 billion across four projects :

Recipient	Amount	Purpose
Sunrise Energy Metals	$400 million	Develop a full U.S.-aligned scandium mining and processing value chain, including the Syerston Scandium Project in New South Wales, Australia
Niron Magnetics	$150 million	Scale production of 100% domestic, rare earth-free permanent magnets for defense applications
Strategic Bauxite	$85 million	Secure domestic supply of refractory-grade bauxite for high-temperature defense components

The White House fact sheet described the round as an investment of over $2 billion in federal loans and equity investments across these four companies . These four investments collectively aim to reduce U.S. reliance on Chinese-dominated supply chains for battery materials, rare earths, scandium, and specialty minerals critical to defense and advanced manufacturing .