Over the past few weeks, the Department of Energy has been reviewing the possibility of canceling billions of dollars worth of contracts. The federal agency has now confirmed it is terminating $720 million in manufacturing awards. These cuts affect companies that produce battery materials, recycle lithium-ion batteries, and manufacture super-insulating windows.
Energy Secretary Chris Wright has been examining contracts established during the Biden administration. A department spokesperson stated that the projects missed their milestones and did not adequately advance the nation’s energy needs.
All the money for these grants was originally authorized by Congress as part of the Bipartisan Infrastructure Law passed in 2021. The majority of the funds were awarded in 2023 and 2024. The current administration has cited grants awarded between Election Day and Inauguration Day as justification for canceling awards.
Three startups are affected by this decision, all of which were selected for grants well before the 2024 presidential election.
Ascend Elements has been developing a recycling technology to convert manufacturing waste and old batteries into materials needed for domestic lithium-ion battery production. The company was awarded $316 million in October 2022 for a facility in Kentucky. Federal records show that $206 million has already been disbursed to the company. Ascend Elements stated it is moving forward with its plans using other funding sources to cover the shortfall.
Anovion was awarded $117 million to establish a domestic supply of synthetic graphite for lithium-ion battery anodes. Currently, Chinese suppliers control most of this supply chain. The startup’s plant is planned for Alabama, and to date, only $13.8 million has been disbursed according to federal data.
Another startup, LuxWall, manufactures windows that insulate buildings as effectively as solid walls, a breakthrough that could reduce energy use and utility bills. The Department of Energy awarded the company $31.7 million in November 2023 to build a factory near Detroit. Only $1 million has been sent to the company, which opened the first phase of its factory in August 2024.
These grants were intended to help startups navigate the difficult transition from technology development to commercial deployment, often called the valley of death. First-of-a-kind factories are challenging for startups to finance, and such government grants were designed to encourage private investment. Successful facilities can serve as a model for future factories, strengthening the country’s manufacturing base.