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Go inside Group14, the $3B startup with a secret tech for better batteries – GeekWire


Group14’s headquarters in Woodinville, Wash. (GeekWire Photo / Lisa Stiffler)

Across the highway from battery startup Group14 Technologies is the Maltby Cafe, a decades-old institution dishing up cinnamon rolls the size of dinner plates. The cafe’s exterior is plastered with a half-dozen vintage gas station signs, a nod to transportation’s fossil fuel past — and a striking contrast to Group14’s embrace of an electrified future.

In this quiet, still largely rural corner of Washington’s Snohomish County, Group14 is helping paving the way to next-generation batteries that can provide more power and charge faster than today’s ubiquitous lithium ion batteries.

The technology, said co-founder and CEO Rick Luebbe, is “truly transformational.”

Venture capitalists including Porsche AG and Microsoft’s Climate Innovation Fund likewise see potential in the 7-year-old company. Group14 has raised more than $648 million from investors, plus more than $100 million in federal funding. The startup says it’s valued at more than $3 billion, making it one of the most valuable privately held companies in the Pacific Northwest.

Rick Luebbe, CEO and co-founder of Group14. (GeekWire Photo / Lisa Stiffler)

On a recent visit to Group14’s Woodinville headquarters, workers were busy across the spacious facility, turning raw materials into a patented silicon-carbon product that can replace conventional graphite anodes. The technology can be used to power everything from consumer electronics to electric vehicles.

The process starts, perhaps ironically, with products derived from petroleum manufacturing. The grainy, white material — the company doesn’t publicly share what it is — first goes through a polymerization process where it’s baked in a large kiln that stretches horizontally. The kiln cooks off the material’s hydrogen, oxygen and nitrogen, creating a synthetic carbon. The carbon comes out in black, pumice-like chunks that Luebbe describes as an “overcooked brownie.”

The chunks are crushed into a powder that goes into a separate room where workers in respirators and protective gear combine the carbon with silane gas. Silane provides the silicon that is deposited throughout microscopic pores within the carbon scaffolding.

Once a sample passes a quality control test, it’s ready for shipping to one of Group14’s customers.

Building a better battery

Isolate and polymerize the carbon, crush it, add silicon and you’re done. The process sounds easy.

“We describe it as elegant,” Luebbe said. “Our definition of elegant is ‘ingeniously simple.’”

In truth, Group14 is using an innovative, finely-tuned process that has taken years to hone, Luebbe said. The simplicity, he added, “is a testament to the hard work, the insight, the inspiration, and the brilliance” of the team’s researchers.

The carbon scaffold material produced for battery anodes at Carbon14. (Group14 Photo)

Group14 officially launched in 2015 as a spinoff from the energy storage materials company EnerG2, which was itself a University of Washington spinoff created in 2003.

A few years ago the startup explored the possibility of partnering with U.K.-based battery tech company Nexeon. The two were unable to agree to acquisition or licensing terms. Last September, Group14 filed a lawsuit against Nexeon alleging that the company stole and used trade secrets. Nexeon has characterized the case as meritless and asked for it to be tossed out. The suit is pending in U.S. District Court in Seattle.

In general terms, here’s how the technology works. In conventional lithium batteries, 60% of the battery cell is the graphite anode, while 40% is the cathode. The cathode contains the lithium — and it’s the amount of lithium that determines the battery’s energy density.

Silicon anodes have a much higher capacity by weight and volume than graphite anodes, which allows a manufacturer to make a smaller, lighter anode and increase the size of the power-boosting cathode.

According to outside testing, Group14’s silicon-carbon anode can improve battery performance by 50% and provide faster recharging times, Luebbe said.

A Group14 employee works at a hood at the company’s headquarters. (GeekWire Photo / Lisa Stiffler)

The startup has 60 customers, though Porsche is the only one it has named publicly.

For use in electric vehicles, Group14’s customers test the material in a three-step process: first they run pilot tests with hundreds of batteries to see if the material works with their design; then they test it at a larger scale; and finally they test the system’s real-world performance, using Group14’s material in battery packs installed in cars driven a 100,000 miles.

The process is similar but simpler for consumer goods.

Revving up production

Most of the company’s customers are in the earlier testing steps, Luebbe said, but some are in the final evaluation phase and getting close to incorporating Group14’s anode material in commercial production.

To meet demand, the company is expanding its production capabilities:

  • The Woodinville site can produce 120 tons of battery material per year, though it’s operating below that volume.
  • A facility in South Korea with a 2,000 ton annual capacity should start operating later this year. The project is a joint venture with electronics company SK materials.
  • Two production modules are scheduled to come online in Moses Lake, Wash., in early 2024 with a 4,000 ton total annual capacity. That’s enough material for at least 200,000 electric vehicles.
  • The plan is to continue building additional, 2,000-ton modules over the coming decade.
  • About 300 people are working on the construction project in Moses Lake and it will take about 75 people to operate each module once completed.

Group14 is also finishing construction over the next couple weeks of a new R&D center at its Woodinville headquarters.

The startup chose Moses Lake for a manufacturing hub given its access to clean, affordable power from hydroelectric dams and its proximity to Group14’s home base.

California-based Sila Nanotechnologies, which is producing its own silicon anode battery materials, also recently broke ground on a production facility in Moses Lake.

NEO Battery Materials, a Vancouver, B.C.-based silicon anode startup, has submitted permits for the construction of a manufacturing facility in South Korea. The site should produce 240 tons of anode material each year.

There are dozens of companies internationally developing silicon anode technology. Given the batteries’ higher energy density, faster charging time and cost benefits from increased efficiency, Luebbe can imagine their applications beyond electronic devices and cars. They could power sectors that are trickier to electrify, he said, including airplanes and semi-trucks.

While the technology is evolving, the battery sector still faces challenges as demand increases. Battery prices rose for the first time last year, according to tracking by BloombergNEF, driven by higher costs for lithium, nickel and the other metals. And experts say the higher prices will likely hold until next year, when lithium production should start increasing.

Group14 doesn’t require these metals for its side of the battery equation and should stay on track, Luebbe said.

“I’m convinced that silicon batteries are coming faster than people think,” he said.


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