This Small Business Innovation Research (SBIR) Phase II project will develop a metal-oxide tin-alloy nano-composite for use as an anode material in a new ultra-low cost lithium-ion battery. This new battery system could impact many applications and offer an environmentally benign alternative to lead acid batteries with significant performance enhancements. With the advent of ultra-low cost cathode materials, for example lithiated metal phosphates, the development of a complementary anode material is now the gating item for low-cost lithium-ion batteries. In Phase I, mixtures of transition metal oxides and tin alloy were successfully produced. The electrochemical and physical characteristics were evaluated and these materials showed excellent electrochemical performance but exhibited a high first cycle loss. Internal work on tin alloys mixed with transition metal carbides and nitrides suggests the first cycle loss could be improved through simple chemical modification of the oxide component. The Phase II work will involve development of these modified oxides to reduce first cycle loss. In addition low cost production methods will be developed for preparing the precursors and materials. Optimized electrodes for use in ultra-low cost battery prototypes will be produced and targeted for outside evaluation.<br/><br/>Commercially, this anode material will be combined with metal phosphate cathodes to make a new class of lithium-ion batteries that are cost competitive with lead-acid batteries and maintenance free. This higher energy lead acid replacement opens up opportunities in the growing UPS and HEV markets. There are also non-commercial impacts. Any reduced use of lead acid batteries, which creates toxic waste, is beneficial to the environment. This new class of batteries would lead to the reduction of the 50,000 tons of toxic lead released due to incomplete recycling of lead-acid batteries. The development of materials that enable lithium-ion batteries to be cost competitive with lead acid batteries could give US battery manufacturers a chance to compete against the Asian dominated rechargeable battery market.