Energy Department axes awards to battery and energy-efficiency startups, raising concerns over clean tech progress and federal support consistency.
Background: DOE Cancels $720 Million in Manufacturing Awards
The Department of Energy (DOE) has confirmed it is canceling over $720 million in grants meant to boost U.S. manufacturing in key clean tech sectors. The cuts hit companies involved in battery materials, lithium-ion recycling, and super-insulating window production.
These awards were funded under the Bipartisan Infrastructure Law of 2021, with most of the funds issued in 2023 and 2024.
Why the Grants Were Canceled
According to DOE spokesperson Ben Dietderich, the projects were terminated for “missing milestones” and failing to adequately advance national energy goals.
The decision aligns with a broader review ordered by Energy Secretary Chris Wright, focusing on grants issued during the Biden administration.
- The review follows a precedent set during the previous Trump administration, which scrutinized awards made between Election Day and Inauguration Day.
Who’s Affected: Startups at the Forefront of Innovation
Three notable clean tech startups are among those affected by the funding withdrawal:
- Ascend Elements:
- Grant Awarded: $316 million (of $1B project)
- Funding Disbursed: $206 million
- Focus: Recycles battery manufacturing waste into usable materials.
- Status: Continuing with private investment to offset the funding cut.
- Anovion:
- Grant Awarded: $117 million
- Funding Disbursed: $13.8 million
- Focus: Domestic production of synthetic graphite for battery anodes.
- Importance: Counters Chinese dominance in this critical supply chain.
- Status: Facility planned for Alabama remains in development.
- LuxWall:
- Grant Awarded: $31.7 million
- Funding Disbursed: $1 million
- Focus: Super-insulating windows capable of significantly reducing energy use.
- Status: First factory phase opened in August 2024 in Detroit.
Implications: Startups Stranded in the “Valley of Death”
These grants were designed to help startups bridge the “valley of death”—the high-risk stage between technology development and commercial scalability.
- Federal funding is often the trigger that enables private investors to participate, helping first-of-a-kind factories get built.
- Without this support, startups risk stalling or failing, even with promising technology.
A Blow to Domestic Manufacturing & Energy Independence
Canceling these grants may undermine U.S. efforts to reshore critical supply chains in batteries and energy-efficient technologies.
- The clean energy transition relies on local innovation.
- These factories could have served as blueprints for future U.S.-based production.
Political and Economic Undercurrents
While the DOE cited technical shortcomings, the timing and selection of cuts raise questions about the politicization of energy investments.
- Many affected awards were made before the 2024 election, challenging the idea that they were rushed or poorly vetted.
- The move may shake investor confidence in public-private partnerships if federal backing appears unstable.
What’s Next for Clean Tech Startups?
Startups like Ascend Elements are moving ahead with alternative funding, but not all companies may find a financial lifeline.
- The loss of DOE backing could delay or cancel planned projects.
- Long-term impact may include slower innovation adoption, job losses, and reduced global competitiveness.
