trump doe confirms it’s canceling over $700m in manufacturing grants

Department of Energy Cancels Manufacturing Awards

Recent actions by the Department of Energy involve the rescission of billions of dollars in contractual agreements. The federal agency has now officially confirmed the cancellation of $720 million in manufacturing awards.

Impacted Sectors

These reductions will affect businesses involved in the production of battery materials, the recycling of lithium-ion batteries, and the creation of highly efficient, super-insulating windows.

Rationale for the Cuts

Energy Secretary Chris Wright has been conducting a review of contracts established during the Biden administration. According to a statement by spokesperson Ben Dietderich to E&E News, the projects in question “failed to meet established milestones” and “did not sufficiently contribute to the advancement of national energy objectives.”

Funding Source and Precedent

The financial resources for these grants were authorized by Congress through the Bipartisan Infrastructure Law enacted in 2021. The majority of these funds were allocated in 2023 and 2024. Notably, the Trump administration previously cited similar reasons – grants awarded during the transition period between administrations – to justify the cancellation of awards.

Startups Affected

A total of three startups are included in this round of cuts, and all were initially selected for grants prior to the 2024 presidential election.

Ascend Elements

Ascend Elements is dedicated to perfecting a recycling process that transforms manufacturing byproducts and end-of-life batteries into the essential materials needed for domestic lithium-ion battery production. In October 2022, the company received $316 million towards the construction of a $1 billion facility in Kentucky.

Federal records indicate that $206 million has already been provided to Ascend Elements. The company has stated its intention to proceed with its plans, utilizing alternative funding sources to offset any potential shortfall.

Anovion

Anovion was granted $117 million to re-establish domestic production of synthetic graphite, a critical component in lithium-ion battery anodes. Benchmark Mineral Intelligence reports that Chinese suppliers currently dominate the synthetic graphite supply chain, controlling 75% of it and producing 97% of all synthetic graphite anodes. The planned facility for this startup is located in Alabama, and $13.8 million has been disbursed to date, as per a federal database.

LuxWall

LuxWall develops windows that provide insulation comparable to solid walls, representing a significant advancement that could substantially reduce energy consumption and lower utility costs. The DOE awarded the company $31.7 million to establish a manufacturing plant at the site of a former coal plant near Detroit. While the award was made in November 2023, only $1 million has been released to the company, according to government records. LuxWall initiated the first phase of its factory operations in August 2024.

Previous Reporting

TechCrunch previously reported on the Department of Energy’s efforts to terminate these and other contracts.

The "Valley of Death" and Manufacturing Base

These grants were designed, in part, to help startups overcome the “valley of death” – a common challenge for companies transitioning from technological development to commercialization. Securing financing for first-of-a-kind facilities is often difficult for startups, and these government grants aimed to attract private investment. Successful implementation of these projects could serve as models for future facilities, strengthening the nation’s manufacturing capabilities.