Battery electrolyte makers expand in the US

With more than a dozen lithium-ion battery factories under construction, the rapidly growing US battery industry is drawing in manufacturers of electrolyte, the liquid that transports lithium ions from one end of the battery to the other during use.

Capchem just announced plans to build a $120 million electrolyte plant in southern Ohio. Meanwhile, Dongwha Electrolyte has broken ground on a $70 million facility in Tennessee that will be able to produce more than 70,000 metric tons of electrolyte per year. Soulbrain is building a $75 million electrolyte plant in Indiana to serve a nearby battery factory.

Evelina Stoikou, an energy storage analyst with the market research firm BloombergNEF, says the process of mixing salt, solvents, and additives to produce electrolyte is relatively simple. “The hard part is sourcing battery-grade input materials, especially the salts,” she says.

Michael Sanders, a battery industry analyst with Avicenne Energy, estimates that China produces three-quarters of the salts needed for electrolytes and an even greater proportion of electrolyte solvents.

Koura is hoping to open the first US facility producing lithium hexafluorophosphate (LiPF₆), one of the most common electrolyte salts. The company received a $100 million US Department of Energy grant in October 2022. Since then, Koura has signed an agreement with the salt maker Kanto Denka Kogyo to share technology and production expertise.

Huntsman is expanding production of the electrolyte solvent ethylene carbonate in Texas. In 2022, Indorama Ventures announced it was working with Capchem to set up US production of carbonate solvents. That deal fell through in April, but Indorama hopes to build the facility with a new partner. Lotte Chemical and Ube are also considering US solvent plants.

According to Sanders, the US government hasn’t clarified how much support manufacturers of electrolyte and electrolyte components will receive through the Inflation Reduction Act, a 2022 law incentivizing US production of clean technologies. Making those materials in Asia and shipping them to the US is tedious and expensive, but Sanders says that without subsidies it will be tough for local producers to compete with experienced Chinese players.