Oct 15 (Reuters) - Silicon Valley startup Lyten

announced on Tuesday its plan to build the world's first

gigafactory for lithium-sulfur batteries in Reno, Nevada, as

companies seek to capitalize on the demand for more affordable

power sources for electric vehicles.

With battery costs significantly impacting EV prices,

automakers are increasingly looking for alternative technologies

to make such vehicles accessible to a wider market.

Lyten, backed by Chrysler-parent Stellantis ( STLA ) and

delivery services provider FedEx ( FDX ), said it would invest

more than $1 billion in the facility that would initially create

200 jobs, growing to more than 1,000 in northern Nevada.

Nevada's Reno is also home to a Tesla gigafactory that

produces battery packs and other components for its EVs.

Lyten's facility can produce up to 10 gigawatt-hours of

lithium-sulfur batteries annually at full scale and its first

phase will start production in 2027.

Efforts to reduce reliance on China for battery materials

have also encouraged companies to develop domestic supply chains

in North America, but industry experts have cautioned that

establishing a robust and independent supply chain for EV

battery cells will take several years.

Lyten, founded in 2015, has been assembling batteries at its

semi-automated facility in San Jose, California since May last

year.

The company said its lithium-sulfur cells have high energy

density, which could make it up to 40% lighter than lithium-ion

cells.

The startup said it has a pipeline of hundreds of potential

customers and its lithium-sulfur batteries would be used in

drones, micromobility, space and defense markets in the next two

years.