Battery technology company Anaphite has received £1.6 million in funding to accelerate the development of its dry-coating technology for use in electric vehicle (EV) battery manufacturing.

Typically, batteries account for up to 30% of an EV’s total cost. Reducing the cost of battery manufacturing is an essential step in reducing the price point of EVs and increasing their accessibility for consumers.

For EVs to be more sustainable, Anaphite explains that changes to the battery manufacturing process are needed to reduce the amount of energy required.

The industry is now looking to move to new ‘dry’ processes which remove the need for the use of cathode drying ovens and reduce energy requirements for the electrode manufacturing step by up to 90%, reducing the carbon footprint of battery production, while also avoiding the use of harmful solvents.

Large automotive manufacturers such as Volkswagen have described the dry coating process as a ‘game changer’ for the industry.

Anaphite’s approach produces fully formulated ‘Dry Coating Precursor’ (DCP) powders that enable the dry coating process.

These powders are tailor-formulated to customer specifications enabling the best battery formulations to be made using dry processes safely, without compromising product performance, says Anaphite.

Its technology aims to unlock the benefits of the dry coating process, which will reduce the cost of the battery cell manufacturing process by up to 40%, improving EV accessibility.

Decarbonisation investor Elbow Beach Capital has further invested in the company following the latest funding round.

The overall funding of £1.6m consists of £685,000 grant funding via the Government’s Investor Partnerships Future Economy programme and more than £880,000 committed by private investors.

The programme was established by Innovate UK to drive investment into high-growth innovative SMEs by aligning private investment with public funding.

In partnership with UK Research and Innovation’s (UKRI) Faraday Battery Challenge, delivered by Innovate UK, the grant will enable Anaphite to accelerate the development of its dry-coating technology.

Elbow Beach Capital supported Anaphite in unlocking this grant funding by way of an advanced subscription for Anaphite’s Series A funding round.

Also participating in this round was high net worth service Wealth Club who provided over 50% of the funding reflecting the significant support for the company from Wealth Club’s entrepreneurial network.

To date Wealth Club has invested more than £1.4m in Anaphite.

Fellow investors include Bristol Private Equity Club and angel investors. Elbow Beach Capital first backed Anaphite in 2022, leading the company’s £4.1m seed investment round.

Jon Pollock, CEO of Elbow Beach Capital, said: “We are delighted to have supported Anaphite in winning this grant funding which will accelerate the rollout of their technology which is a real enabler for accelerating EV adoption.

“We have seen that demand for EVs is price elastic so reducing the cost of vehicles is essential to achieving their widescale rollout.

“A transition away from fossil fuel powered transport is critical to achieving net zero but policy and regulation changes risk being regressive if there are not accessible, affordable options for consumers, particularly at a time of cost-of-living challenges.

“This makes technology like Anaphite’s critical to a fair transition and a very compelling investment for us.”

The purpose of the project is to demonstrate that Anaphite’s dry coated cathode matches the performance of energy and cost intensive wet coating.

This project will enable Anaphite to scale its dry electrode production process to the next phase, demonstrating the performance that battery cell-makers need on industrially viable equipment, as well as build and consolidate relationships with global organisations specialising in dry coating technologies.

Anaphite is working with several major automotive, battery cell manufacturers and electrode materials suppliers to further develop its technology and optimise it for individual customer requirements.

The project will be guided by an industrial advisory board to provide feedback on performance targets at electrode and cell level, improving the robustness of Anaphite’s processes.

Upcoming milestones Anaphite is in the process of raising a Series A investment round. This investment will allow the company to scale production of the composite materials and to design, cost and validate the process, ready for full-scale production at a customer site.

Anaphite will also commit to automotive New Product Introduction (NPI) programmes for dry coated cathodes by 2025, enabling Anaphite’s technology to be rolled out into commercial EVs in 2028, directly contributing to reductions in the cost and energy consumption of battery cell production for EVs in the short term.

Joe Stevenson, Anaphite CEO, said: “Anaphite has built a very strong IP position and expert teams working in electrochemistry, process chemistry and chemical engineering.

“We are directing all these resources into enabling the stepchange in battery manufacturing that is dry electrode coating.

“We’ve made this choice because of the double impact of reducing the energy needed to make EVs and of increasing the uptake of EVs by reducing their cost.

“Our customers are excited by the cathode performance improvements and ease of processing using Anaphite’s composite materials.

“We are now working alongside our customers to tailor our formulations for their dry coating processes. We have a clear path to establishing a very valuable business.”

Gayle Bowen, Wealth Club director and head of direct investments, said: “Anaphite is an ambitious cleantech with a well thought through plan and experienced, skilled team.

“Having delivered on its early milestones our investors were keen to continue supporting the company.”