trump’s doe proposes cutting billions in grants for gm, ford, and lots of startups

Potential Funding Cuts Impacting Startups and Automakers

The Department of Energy is considering substantial reductions in federal funding, potentially impacting numerous startups and major automotive manufacturers like Ford, General Motors, and Stellantis. This decision stems from actions taken by the current administration.

Proposed Grant Cancellations

An analysis by TechCrunch of an internal, non-public document reveals that over $500 million in contracts awarded to more than a dozen startups could be rescinded. These proposed cuts specifically target grants allocated through the Bipartisan Infrastructure Law.

These potential cancellations are in addition to over $7.5 billion in contracts the administration previously indicated it would cut last week. Many of these proposed reductions have not been previously reported.

Affected Companies Beyond Startups

The impact extends beyond startups. Several established companies are also facing potential grant losses totaling hundreds of millions of dollars. These include Daimler Trucks North America, Ford, General Motors, Harley-Davidson, Mercedes-Benz Vans, Stellantis, and Volvo Technology of America, as confirmed by sources to TechCrunch.

Significant Losses for General Motors

General Motors could potentially forfeit at least $500 million in grant funding originating from the Domestic Manufacturing Conversion Grant program. These funds were earmarked for retooling the Lansing Grand River Assembly Plant in Michigan.

The automaker announced plans in July 2024 to transition the plant to the production of electrified vehicles, encompassing both hybrid and fully electric models.

Impact on Startup Operations

The scale of some of these awards suggests that their cancellation would significantly affect the operations of the recipient startups. While some cuts were previously disclosed, many remain unannounced.

TechCrunch has contacted several of the companies involved and will provide updates as responses are received.

Large-Scale Awards at Risk

Two awards exceeding $100 million are on the list for potential cancellation. A $189 million grant was awarded to Brimstone, a materials startup, to facilitate the construction of a facility for producing Portland cement, alumina, and other materials with reduced carbon dioxide emissions.

Another substantial award, totaling over $100 million, was granted to Anovion, a Chicago-based startup focused on establishing a domestic supply of synthetic graphite for lithium-ion batteries. Currently, Chinese companies largely control the graphite market.

Battery Material and Cement Innovations Threatened

Li Industries, a battery materials startup, received $55.2 million under the Bipartisan Infrastructure Law to develop a process for recycling LFP batteries, aiming to reduce reliance on Chinese supply chains.

Several other cement startups are also facing potential cuts. Sublime Systems, based in Somerville, Massachusetts, was awarded $86.9 million to build a plant producing ultra-low-carbon cement. Furno, developing a modular cement kiln, risks losing its $20 million grant for a demonstration plant in Chicago.

Building Materials and Energy Efficiency

Companies in the building materials sector are also affected. CleanFiber and Hempitecture, manufacturers of insulation for residential and commercial buildings, could lose $10 million and $8.4 million, respectively.

Skyven Technologies, specializing in industrial heat pumps, and Luxwall, producing super-insulated windows, are facing potential losses of $15 million and $31 million, respectively.

Potential Conflict with Administration Goals

At least one proposed cancellation appears to contradict the administration’s stated objectives of achieving energy and AI leadership. TS Conductor, which could lose $28.2 million in grant funding, develops advanced conductors for electric lines capable of doubling or tripling transmission capacity.

This technology has the potential to alleviate grid bottlenecks and enhance the reliability of power supply to data centers.