5Y News | New Chen New Materials Closes Nearly 100 Million RMB Series B1 Round, Advancing Scale-Up of Next-Generation Electrolyte Main Salt LiFSI

Anhui Xinchen New Materials Co., Ltd. recently announced the completion of a nearly 100 million RMB Series B1 funding round, with investors including 5Y Capital, CASSTAR, and Hefei Innovation Investment. The proceeds will be used for capacity expansion, product R&D, and market development.

Xiaoyu Xu of 5Y Capital commented: "LiFSI is an outstanding lithium battery electrolyte for next-generation applications, including advanced liquid electrolytes, solid-state batteries, and silicon-based anodes. It offers high lithium-ion transference numbers, excellent conductivity, and superior low-temperature performance. Xinchen New Materials is optimizing its synthesis processes and supply chain to develop cost-effective, recyclable LiFSI electrolyte products that meet next-generation automotive-grade primary salt standards. We look forward to Dr. Wang and his seasoned team leveraging their process technology advantages and continuous innovative spirit to enable broader application of LiFSI across the lithium battery industry."

Founded in December 2021, Xinchen New Materials is a supplier of lithium salts for lithium battery electrolytes. In 2022, the company received investments from notable institutions including Xiaomi Changjiang Industrial Fund and Oriental Fortune Capital. The company focuses on the R&D, manufacturing, and sales of novel electrolyte lithium salts and additives, with main products including LiFSI (lithium bis(fluorosulfonyl)imide), NaFSI, LiODFB, and LiBOB.

As one of the key raw materials for lithium batteries, electrolyte consists of three components: the solute (which provides lithium ions and accounts for about two-thirds of cost), the solvent (which provides the medium for lithium ion transport), and additives (used in small quantities to improve performance). Currently, lithium hexafluorophosphate (LiPF6) is the most widely used electrolyte, but it suffers from poor thermal stability, weak high- and low-temperature performance, and susceptibility to hydrolysis — shortcomings that fail to meet the demands of power batteries.

By comparison, LiFSI can significantly enhance battery performance. It markedly outperforms lithium hexafluorophosphate in fast-charging capability, temperature tolerance, and cycle life, and is compatible with next-generation lithium battery technologies such as 4680 cells, semi-solid-state batteries, and gel-state batteries — earning it the reputation of "king of semi-solid-state battery electrolytes."

Previously, LiFSI was primarily used as an additive in lithium battery electrolytes to enhance performance. But recently, as LiFSI costs have declined and scaled application has become viable, it has begun evolving from a novel additive into a mainstream lithium salt.

Major battery manufacturers have already begun incorporating LiFSI in substantial quantities to improve battery performance. According to projections by GGII, if LiFSI is used as a general lithium salt additive, demand will reach 130,000 tons in 2025 with a market size of approximately 10.5 billion RMB; if used as a solute to replace existing lithium salts, 2025 demand would reach 210,000 tons with a market size of up to 17 billion RMB.

Xinchen New Materials is one of the few domestic lithium salt manufacturers capable of mass-producing LiFSI. It has established 2,000 tons of LiFSI capacity and has begun small-batch shipments. Dr. Chiwei Wang, Chairman of Xinchen New Materials, told 36Kr Carbon that the company's operational 2,000-ton high-purity crystalline primary salt LiFSI production line is the largest solid-state production line in mass production globally, as well as the industry's largest single-unit capacity installation, truly achieving large-scale production of high-purity solid-state LiFSI.

On market expansion, Wang noted that Xinchen has already sent samples to nearly ten leading battery and electrolyte manufacturers, receiving consistent recognition from downstream customers.

Additionally, the company employs an inherently safe innovative process that enables high-yield, efficient production of automotive-grade ultra-pure products. Multiple technologies have reached international or domestic leading levels. The company has been granted 5 invention patents and 14 utility model patents.

Although LiFSI offers superior performance, its high cost has somewhat hindered market expansion. Cost reduction is the key to unlocking downstream markets. Xinchen New Materials is committed to clearing LiFSI's cost-reduction pathway, with a target of bringing product costs to parity with lithium hexafluorophosphate by the end of 2025, thereby achieving substantial replacement of LiPF6.

Wang explained that electrolyte lithium salt costs consist of three main components: BOM (raw materials), manufacturing expenses, and direct labor. On BOM costs, LiFSI should theoretically be slightly lower than lithium hexafluorophosphate, but currently remains higher due to low yield rates, complex byproduct treatment, and insufficient scale effects.

Xinchen New Materials has corresponding cost-reduction strategies for all three areas. "Through process optimization, we plan to raise our overall yield to near the level of lithium hexafluorophosphate before 2025 (high-level LiPF6 yields are around 93%). For manufacturing expenses, we're reshaping industry division of labor, fully utilizing byproducts, and continuously optimizing per-ton investment to reduce water, electricity, and gas consumption, byproduct treatment, and depreciation. For direct labor, we're driving costs down through automation improvements and scale expansion," Wang said.

As the saying goes, each generation of materials enables a generation of equipment and a generation of industry. As power battery technology innovation accelerates, materials and chemistry system innovations are increasingly becoming the core competitive advantage of the battery industry, poised to play an ever more important role in the future.

"LiFSI is our entry point into the battery materials industry. Going forward, we will provide an expanding range of novel battery materials that address industry pain points," Wang said. The company's vision is to become a global leader in electrochemical materials, advancing the battery industry through materials innovation and helping batteries truly meet the demands of all-weather, all-scenario, safe, long-life, fast-charging, and high-efficiency applications.

5Y Capital seeks out, supports, and inspires lonely entrepreneurs, providing support from the spiritual to all operational aspects. We believe that if the "crazy" you in others' eyes begins to be believed in, the world will become a different place.

BEIJING · SHANGHAI · SHENZHEN · HONG KONG

WWW.5YCAP.COM