Tesla Silicon is Disrupting Silicon Disruption // + Notes on HPQ and Graphite

Tesla Silicon is Disrupting Silicon Disruption // + Notes on HPQ and Graphite

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Welcome back everyone! I’m Jordan  Giesige and this is The Limiting Factor.  This is part seven of the Lithium Mine to Battery  Line Series to break down and understand what   was unveiled at Tesla Battery Day. Today  we’re going to discuss how Tesla Silicon   may disrupt the high loaded silicon anode  market just as it’s about to get off the ground. 

Before we begin, a special thanks to my  Patreon supporters and YouTube members.   This is the support that gives me the freedom  to avoid chasing the algorithm and sponsors,   and I hope will eventually allow me to do this  full time. As always, the links for support are   in the description. Back to Silicon disruption. In terms of battery chemistry, Silicon is one   of the most promising ways to increase energy  density and decrease the cost of lithium-ion   battery cells. The more silicon you can  safely get into the anode of the battery,   the better. Before my final Battery Day  Predictions video, I wrote multiple versions   of the script. One of them included a low-cost and  high energy density pathway that included Silicon.  

However, the most promising silicon  technology, silicon graphite composites,   didn’t appear ready for primetime so I  decided to leave them out of the script.  Tesla’s Battery Day presentation referred to  silicon graphite composites as silicon Structured   in Graphite. Silicon Structured in Graphite and  Silicon Graphite Composites are both a mouthful,   so we’ll refer to them simply as composites. I started having doubts about composites  

when I found out about SilLion, which  Tesla allegedly acquired last year.   SilLion specialised in the type of polymer coated  silicon that Tesla revealed at battery day.   But, I didn’t have any proof that SilLion was  specifically working on the type of polymer coated   silicon that could go into a Tesla vehicle,  let alone whether they could get a product   to market as quickly as a composite option. However, in the background, it was playing on   my mind. A week after I made the SpaceX  Moonshot video covering SilLion tech,  

I raised the question with Shirley Meng. The  reason why I didn’t release this footage with   the original interview is because it would take an  entire series on silicon, like the one I’m doing   now, to provide background about what we were  talking about and the significance. Have a listen.  There’s a few technologies that I’ve been looking  at. I don’t know if this is something you can   comment on. It seems like Sila and Amprius…they  both…Amprius actually has two technologies: The   Silane Chemical Vapour Deposition, which is  to me that’s too far off into the future. And   they also have nano-composite and I  think Sila also uses a nano-composite. 

There’s a company that Tesla supposedly  acquired called SilLion and they were working on   Cyclised Polyacrylonitrile. If you were to  hedge a bet on cyclised polyacrylonitrile   vs like a nanocomposite like Sila has; Which  direction do you think is the most promising?  Wow, I think that’s a very difficult  question! Yeah, so, I think that   possibly the best way to look at this is that:   What is going to increase the cost/performance  ratio and safety at the same time?  Based on my understanding of Tesla’s track  record: Because they continuously increase   the cost performance ratio, so basically…  sorry, I should say performance per cost ratio…   and you know at the same time keep up  the safety record, right? So if I have to   think about this…I do think any  technology that uses a lot of fancy   synthesis method, I don’t think it’s very  difficult to lower that cost to performance.  So, I think Tesla has the brilliant minds that  making that kinds of decisions, so I’m confident   that as long as they follow that guidance, I think  that, you know, they make the right decision. Shirley’s general analysis turned out to be right  on the money. First, Tesla focused on the cost to   performance ratio of Tesla Silicon vs other  Silicon products. Second, since battery day,  

Elon has called out the importance of reliability  and safety. As discussed in the last two videos,   reliability and safety testing could mean  that Tesla might need additional time to   verify Tesla silicon, and therefore additional  time to incorporate it into their batteries.   Third, Tesla’s process for creating Tesla  Silicon isn’t fancy and rather simple. In short,   it involves dipping the silicon in a  polymer solution and heat drying it. 

With that said, reading between the lines, you can  tell that we’re both struggling with the question.   I can’t speak for Shirley but there were two  reasons why I was finding hard to believe   that Tesla would take the path of  polymer coated Silicon particles.  First, a graphite silicon composite particle  is the approach that appeared to be the most   likely for the entire industry. Several high  profile start-ups are working on composites.   Some of these companies are developing these  composite particles to simply hedge their   bet and cultivate a potential revenue  source outside of their core product,   this includes Talga and from  what I can tell, Novonix. 

Tesla Silicon isn’t a concern for me as  an investor of both companies because I   haven’t assumed that their growth will be  built on silicon composites. In my view,   the engine of growth for both these companies is  graphite and other materials which I still expect   Tesla and everyone else in the industry  to continue using throughout the 2020s.  Any revenue that Talga or Novonix make  from composites will be icing on the cake.   Any company that can’t develop a material like  Tesla silicon or obtain it from Tesla will need   their own high silicon anode material. They’ll be  getting that high silicon material in the form of   composites from companies like Talga and Novonix. However, other companies, which I won’t name,   have staked their companies on silicon composites,  and built their brand on them. The Silicon product  

Tesla unveiled at battery day may have effectively  knee capped many of these companies. Regardless,   the primary point here is that the entire industry  was and is gearing up for the composite approach.  The second reason I had doubts about Tesla  taking a polymer coated silicon approach   before battery day was research. A broad strategy  for increasing the Silicon content of batteries   is detailed in this paper, which was published  in May of this year. The title of the research   paper was ‘The success story of graphite as  a lithium-ion anode material – fundamentals,   remaining challenges, and recent developments  including silicon (oxide) composites.’  

It was led by Jakob Asenbauer and overseen by  Dominic Bresser. We’ll abbreviate the name of the   paper to ‘The Success Story of Graphite Paper.’ I’ve outlined here the development path that   the research paper laid out. Let’s look at what  each of these three steps are and how Tesla has  

flipped the board. The paper referred to them  as steps, but I’ll refer to them as levels.   As in level one to level three,  with three being the most advanced.  First level, Silicon Oxide Glass. This is  what Tesla referred to in their Battery Day   presentation as Silicon Structured in Silicon  Oxide Glass. This is what manufacturers are   currently using in their batteries to dope the  graphite anode. The image on screen provides a   better illustration of what the structure is like.  The Silicon metal is encased in bulky silicon  

oxide glass. However, as we discussed  in the Cracking the Silicon Code video,   silicon oxide glass appears to be limiting  the silicon loading to 5-8% silicon. In order   to take advantage of most of the benefits  of Silicon, a loading of 20-30% is needed.  Above 30% silicon, the voltage of the cell starts  to drop, containing the volume expansion becomes   more difficult, and there isn’t much graphite left  in the anode to replace with higher energy density   silicon. In short, there are diminishing returns  and greater risks above 30% silicon in the anode. 

The second level that the Success Story of  Graphite Paper suggested was to use silicon-metal   alloys. Silicon Metal Alloys appear to use  similar engineering to silicon oxide glass,   with two key differences. Instead of silicon  surrounded by silicon oxide, they use silicon   surrounded by silicon-metal alloys such as nickel  and titanium. The nickel and titanium matrix has   the additional benefit of being super elastic,  similar to Tesla’s polymer coating. The silicon  

metal alloy work showed a lot of promise and  sounds like a fascinating solution to the lithium   expansion problem. However, in my view, it would  be better to skip this step. Like the silicon   oxide glass, the metal matrix adds a lot of bulk  to the Silicon and might reduce energy density.   The Titanium-Nickel matrix would also likely be  more expensive than Tesla’s polymer approach.  The third level that the Success Story of  Graphite Paper suggested was to use elemental   silicon. Elemental silicon simply means  pure silicon rather than an oxide or alloy.   The paper listed several requirements for  using pure silicon, which were as follows:  First, limit the loading of silicon in the anode  to 30-50% by weight, with the rest of the anode   being filler material like graphite. The reason  for this is straightforward. Silicon expands by   300% when charged and loading the anode past  this can cause the anode material to disintegrate   or peel away from the current collector. Second, limit the silicon particle size to  

150 nanometres. This is because silicon  pulverises itself above 150 nanometres.   It’s also because electrode design and the  elasticity of the binder come into play   with larger micron sized particles. video Third, combine the 150 nanometer silicon particles   with graphite particles to form larger spherical  composite particles. Those larger spherical  

conglomerates would be in the micron size range.  This is the type of composite particle that   Tesla showed in their presentation, which they  referred to as silicon structured in graphite.  My understanding is that combining the  nano-particles into a larger micron composite   particles provides two benefits. First, it creates  a shared SEI layer that reduces first cycle   losses. What are the SEI and first cycle losses?  When a battery is first charged at the factory,   the electrolyte reacts with the surface of  the particles to form the Solid Electrolyte   Interphase, or SEI, which is a protective  layer that extends battery cycle life.   The electrolyte contains lithium, which means  that some of the lithium the battery uses to   store energy is used to create the SEI layer. The second benefit is that these composite  

particles are porous, which makes  them more robust to the expansion   and contraction of the Silicon particles. To summarise, as far as I can tell from the   outside looking in at the battery  industry and the research field,   composite particles seemed like the most  promising solution to both researchers and   the battery industry for the following reasons: A maximum of 30-50% silicon loading makes the   expansion problem manageable. 150 nanometre  silicon eliminates silicon pulverisation.   The composite particle lowers first cycle  losses and the porous structure of the composite   particles further buffers the silicon expansion. In my opinion, Tesla silicon is even more   advanced than the level 3 solution that was  called out in the research and I’d consider   it a level 4 solution. Tesla Silicon uses a  polymer coating that expands and contracts   with the silicon as the battery charges and  discharges. This solves multiple problems at once.  First, it enables the use of silicon particles  larger than 150nm. These larger silicon particles  

still pulverise, but they do so within the  protective and flexible polymer matrix.   In fact, Tesla is probably using  Silicon particles in the micron range,   which is an order of magnitude larger than  what would be used for composites. Micron sized   particles have the additional benefit of being  cheaper because they require less processing.  Many people have been asking me to do a video  on HPQ silicon or to give my opinion on HPQ.  

This request appeared to be primarily  pitched from an investor point of view.   HPQ fits into the conversation here because it’s  a good chance to talk about how much cheaper   bulk silicon is than nano silicon of any grade. HPQ silicon claims to have developed a more   environmentally friendly and cheaper way of  producing silicon. One of the first things   I noticed when looking into the company was  that they were targeting the 150nm particles.   If I’m right, then they’ve designed and  marketed their product towards the particle   sizes that will be used in silicon graphite  composite anodes rather than Tesla Silicon. 

However, HPQ updated their slide deck  the day that I was finishing this script   and they appear to have removed all mention of  150nm particles and instead state that they can   create particles up to 5 microns in diameter.  It looks like they may have recognised that they   need to target a broader particle range. Battery Bulletin passed this chart to me   which provides cost and grade information on  silicon. For me, it tells the story of why   HPQ would have targeted nano-silicon. The  number of Ns indicates the number of nines.   2N for example is 99% purity and 5N is 99.999%.  99% purity, 2N silicon, which is represented by  

MG for metallurgical grade, is $1.50 per kilogram.  I’m not sure what the micronisation cost would be,   but it should be significantly less  than the cost for nano particles.  Nano-silicon runs about $150 dollars per  kilogram, regardless of purity. If the   HPQ process produces nano-silicon in one step  at 4N purity, which is what they’re claiming,   and they can produce at costs comparable to  non-nano silicon, they may get a lot of business   from companies that produce composite particles.  Personally, I’m rooting for Tesla’s approach,  

which I think will use micron silicon at an order  of magnitude lower cost than typical nano-silicon.  HPQs high purity nano-silicon would be perfect  for many other use cases, but if we take Tesla   at their word and if I’m correct, they’re using  the cheapest material out there which is micron   sized metallurgical silicon. That is, Tesla  targeted a universally available, low cost   bulk material. Whereas HPQ might be better off  targeting other markets with fatter margins  

that require higher purity nano sized particles. Overall, HPQ appears to have great products that   may be in demand for a number of specific use  cases and they might help drive down the cost   of the silicon that goes into batteries while  offering a cleaner product. With that said,   fitting with the theme of this video,  Tesla’s approach is extremely disruptive,   and we don’t know exactly what they’re  using in their battery and their materials   cost. This may be a big consideration if  you’re an HPQ investor or considering it. 

I should also take a moment here for the graphite  bulls, which full disclosure, I am. Contrary to   Silicon, battery grade graphite is scarce and uses  proprietary production techniques. I’m guessing   at most Tesla’s anodes will be 30% silicon by  weight. That makes the other 70% graphite. Most   battery producers will be using 90-95% graphite in  their batteries for years to come. Additionally,   the graphite industry has been expecting increases  in silicon and built it into their growth models.  The message here is that silicon won’t disrupt  the battery materials market overnight,   more graphite will be needed than silicon for  the next decade, and unlike silicon there will   likely be a shortage of graphite anode. As always, this isn’t investment advice.  

This is my point of view and reflects my own  investment strategy. If you don’t have your own   well-researched opinions, the market’ll fleece  you when you panic buy and panic sell. This   is why you should always do your own research. Getting back on track, the second reason I view   Tesla silicon as an advanced level 4 solution is  that Tesla doesn’t need to fuse particles together   into compact spheres. This should save time,  energy, and money compared to composite particles.   Along with that, the silicon and graphite  can be added to the anode independently,   increasing production flexibility at the point  of production rather than up the supply chain. 

Third, is speculation on my part. Tesla Silicon  should have a smoother surface than the composite   particles. A smoother surface should perform even  better than composite particles when it comes to   first cycle losses. The smoother the surface of a  particle, the less surface area. In other words,  

Tesla silicon should have less surface area  due to both its larger size AND its shape,   meaning less lithium is wasted in the first cycle.  In summary, composite particles were set to  disrupt the Silicon oxide glass currently used   to dope Tesla’s graphite anode and the anodes of  other large battery manufacturers. Tesla Silicon   appears to be even simpler, more effective,  and lower cost than composites. That is,   Tesla may be disrupting composite particles just  as the industry is lining up factories to produce   battery cells with those composites. The  composite particle is a brilliant idea.  

However, Tesla may have one-upped it. The word first principles is getting tossed around   a lot lately in relation to Tesla and some might  feel the word is losing its meaning or impact.   But, it is what it is. What other large company  is brave enough to stray so far from the pack,  

consistently identifies elegant solutions like  polymer coated silicon, and grinds through the   engineering required to make them work. At the beginning of this Lithium Mine to   Battery Line Series I said that Tesla is taking  big risks to pursue big rewards. Tesla Silicon   is one of the biggest risks Tesla is taking  and may provide some of the biggest rewards.   While the rest of the industry will be using  level 2 solutions like silicon metal alloys   or level 3 solutions like composites, Tesla  has created what I would consider a level 4   solution that’s better, faster, and cheaper. In the next video, we’ll wrap things up with   the Tesla Silicon mini-series by covering myths  about Tesla Silicon. This will be a tidy up before   we press forward to wrap up the Lithium Mine to  Battery Line Series by covering off the cathode,   lithium clay, and structural batteries. If you enjoyed this video, please consider  

supporting me on Patreon with the link at the end  of the video or snag something off the merch shelf   below. I am also active on Twitter and Reddit. You  can find the details of those in the description   and I look forward to hearing from you. A special thanks to Drew Cameron   and Ryan for your generous support of the channel,  all the other patrons listed in the credits,   and my YouTube members. I appreciate all  your support, and thanks for tuning in.

2021-01-03 00:12

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