On Our Radar: Deals we are paying attention to for their impact on industry.

The race is on to do for electric cars what Duracell did for the bunny.

Charging toward increased adoption of electric vehicles necessitates improving efficiencies in lithium-ion (or li-ion for short) batteries, which are currently the most expensive component of those cars: It’s estimated that one-third of the price tag of a Tesla Model 3 is the cost of its battery.

So it’s no surprise that automakers are placing big bets on battery startups in a bid to develop faster-charging and longer range power sources in electric vehicles. Germany’s Daimler AG led a $170 million funding round on April 16 for Silicon Valley startup Sila Nanotechnologies, which has developed a silicon-based substitute for the graphite in lithium-ion batteries that the company says will improve their energy capacity by 20%. The materials that Sila is developing will give Daimler’s commitment to electrification a significant boost, since Mercedes-Benz, which it owns, has plans to electrify its whole product suite by 2022.

“Li-ion is currently the most efficient battery technology available and with new chemistries, we believe it can dominate all storage,” Gene Berdichevsky, Sila co-founder and CEO, told Karma Network.

Li-ion batteries are not only expensive, they are also heavy — especially in comparison to gasoline, which packs a lot more energy by weight. By improving the energy density of the battery, Sila can help create lighter battery packs that reduce the overall weight of electric vehicles, making them more efficient to run.

“To stuff a battery into a car is not the most efficient way to store energy in a vehicle,” Sam Abuelsamid, a principal research analyst leading Navigant Research’s Mobility research service as part of the Urban Innovations program, told Karma. “If you can make the vehicle more efficient, you don’t need as much battery. There’s a cascading effect.”

Sila — which has now been propelled to unicorn status and also counts 8VC, Bessemer Venture Partners, Chengwei Capital, Matrix Partners, Siemens Next47, and Sutter Hill Ventures as investors — is just one player in a crowded field of startups looking to solve the battery conundrum. Improvements to li-ion batteries, which are integral not just to electric vehicles but most consumer electronics including smartphones, have stalled in recent years. But there is tremendous potential to improve electronics and electric vehicles if the batteries can be made to last longer, charge faster, and cost less.

Five days before Daimler’s deal with Sila, Ford Motor Co. announced an investment in Solid Power, a Louisville-Ky.-based company that is developing solid-state li-ion batteries, another technology that holds the promise of improving battery capacity. That $26 million funding round also included investment from Hyundai CRADLE and Samsung Venture Investment Corp. Solid Power also has a partnership with BMW AG. Last June, Volkswagen Group plugged in $100 million for QuantumScape’s solid-state lithium metal battery. But Abuelsamid said solid-state batteries are still in the early stages, and that companies are facing challenges in scaling up production.

Sila sets itself apart in the field with one key aspect of its technology: It can be integrated into existing battery solutions, so companies do not have to change their suppliers or manufacturing processes to implement it. That may make going to market easier for it than some of its competitors.

There are also various other ways to improve lithium-ion batteries. Sila proposes changing its chemical makeup, but there is more than one way of going about that. Rensselaer Polytechnic Institute has recently found that by substituting cobalt oxide with vanadium disulfide in the batteries, it increases their energy density, which in turn enables them to charge more quickly.

Others still propose charging them through air, sound, and even urine. But all these innovations should be taken with a grain of salt, some industry watchers warn. Battery companies often make grand promises about the potential of their solutions to disrupt the market, only to find that their solutions are impractical or difficult to scale.

“It’s important to be skeptical when companies announce ‘battery breakthroughs’ because they rarely amount to anything. There are big differences between demonstration cells and a product that can be mass-produced at a reasonable cost,” Electrek’s Fred Lambert wrote about the Sila announcement.

Environmentalists are also concerned about the industry’s focus on lithium-ion batteries. While they are generally the favored battery solution for today’s technology, they are also difficult to recycle and require large amounts of water to mine for minerals in ways that can be hazardous to the earth and people. Cobalt, a key ingredient in today’s batteries, has been highlighted as particularly problematic, although some companies are exploring more environmentally friendly substitutes.

In March, Amnesty International Secretary General Kumi Naidoo highlighted the issue at the Nordic Electric Vehicle Summit in Oslo.

“Finding effective solutions to the climate crisis is an absolute imperative, and electric cars have an important role to play in this. But without radical changes, the batteries [that] power green vehicles will continue to be tainted by human rights abuses,” he said. “The massive global corporations that dominate the electric vehicle industry have the resources and expertise to create energy solutions that are truly clean and fair.”

Despite these negatives that can undermine the benefits of electric vehicles, Abuelsamid says electric vehicles are, overall, still better for the environment than gas-powered ones.

“While there are certainly issues with mining cobalt and lithium, the overall environmental impact, if you look at the total cradle-to-grave life cycle of an electric vehicle, is (better) than for a traditional internal combustion vehicle,” he told Karma.

Daimler is among several companies that have responded to Amnesty research into this issue by publishing information about its supply chain. And, if companies like Sila can improve the efficiency of lithium-ion batteries and get more mileage out of them, they can potentially slow down the rapid consumption of these minerals.

“Sila Nano is committed to creating a future where anything can be electrified in order to reduce our world’s reliance on fossil fuels,” Berdichevsky told Karma. “Our materials are made from abundant materials like silicon that have a lower impact on our earth’s resources than other materials, and they demonstrate a high cycle life, meaning longer-lasting batteries that translate to less waste.”

Sajjad Khan, executive vice president for Connected, Autonomous, Shared & Electric Mobility, Daimler AG, also defended the use of li-ion in a statement about the Sila investment.

“Li-ion technology is currently the most efficient battery technology available, and still shows plenty of potential for the future,” Khan said.

Ambreen Ali is a freelance writer and editor based in the New York City area who specializes in business and technology. She has 15 years of reporting experience, including covering Capitol Hill and reporting from South Asia.