In recent weeks, the Department of Energy (DOE) has been assessing its financial commitments and has now officially announced the cancellation of $720 million in manufacturing grants. This decision impacts various companies, particularly those involved in battery materials production, lithium-ion battery recycling, and the manufacture of super-insulating windows.
The cuts follow an extensive review conducted by Energy Secretary Chris Wright, who evaluated contracts initiated during the Biden administration. A DOE spokesperson, Ben Dietderich, remarked that these projects “missed milestones” and “did not adequately advance the nation’s energy needs,” according to a report by E&E News.
These grant funds were originally authorized by Congress as part of the Bipartisan Infrastructure Law passed in 2021, with most of the allocations being made in 2023 and 2024. Notably, the previous Trump administration had leveraged grants awarded between Election Day and Inauguration Day to justify the cancellation of other funding initiatives.
Three startups have been hit by these cuts, all selected for funding well before the upcoming 2024 presidential election.
Ascend Elements has been developing an innovative recycling technology designed to convert manufacturing waste and end-of-life batteries into essential materials for domestic lithium-ion battery production. In October 2022, Ascend was awarded $316 million to support a $1 billion facility in Kentucky. Government records indicate that $206 million has already been disbursed. The company plans to proceed with its initiatives using alternate funding sources to offset any financial shortfalls.
Anovion received a grant of $117 million to establish a facility producing synthetic graphite for lithium-ion battery anodes, addressing the fact that 75% of the global supply chain for synthetic graphite is controlled by Chinese manufacturers. The new plant is slated for construction in Alabama, though only $13.8 million has been disbursed so far, according to federal data.
Additionally, LuxWall specializes in producing windows that provide insulation comparable to solid walls, a breakthrough that could significantly reduce energy consumption and lower utility bills. The DOE had allocated $31.7 million for the establishment of a factory on a site that once housed a coal plant near Detroit. Although this award was granted in November 2023, only $1 million has been disbursed to LuxWall; however, they successfully inaugurated the first phase of their factory in August 2024.
TechCrunch has previously reported on the DOE’s plans to cancel not just these grants but also other contracts, highlighting the complexities and challenges faced by clean energy startups.
These grants were intended to help these startups navigate the challenging “valley of death” phase, which often stymies promising companies as they transition from the technology development stage to commercial viability. Establishing first-of-their-kind factories can be a daunting financial task for startups, and government grants are crucial in drawing private investors to support these ventures. Once operational, such facilities can serve as models for future manufacturing plants, thereby strengthening the nation’s manufacturing capabilities.
