Battery recycling company Ascend Elements files for bankruptcy

Ascend Elements said Friday it has begun Chapter 11 bankruptcy proceedings in the United States, a major blow to investors who pumped nearly $900 million into the company.

Ascend CEO Linh Austin announced the decision in a LinkedIn post late Thursday night. He said the company faces “insurmountable” financial challenges.

Ascend’s filing comes amid a decline in the U.S. electric vehicle market and is likely to be exacerbated by the Trump administration’s decision to cancel a $316 million grant intended for the Kentucky facility that was under construction. At the time, $204 million had been disbursed, but Ascend had to look for additional capital to make up the shortfall.

The electric vehicle market in the United States has experienced difficulties recently. Although sales rose before the end of the tax breaks in September last year, they have not fully recovered. Analysts expected that customers who may have bought this year pulled their purchases forward to take advantage of the credit, but that did not help allay automakers’ concerns.

Since then, several automakers have canceled their plans to produce new electric vehicles in the United States. For example, Volkswagen said yesterday that it would end production of the ID.4 at its Chattanooga, Tennessee, plant in favor of the gas-powered Atlas.

Ascend has developed a process to extract critical and valuable metals from scrap and end-of-life batteries. She says her process limits the number of steps needed to convert shredded waste into feedstock for new cathodes.

The company is building a 1-million-square-foot facility in Kentucky that has been plagued by lawsuits and delays, according to local reports.

Like many battery-related startups, Ascend was entering a tough and challenging space. The largest market for battery materials is electric vehicle cells, but automakers have long lead times, and their specifications are known to change over time. Chinese manufacturers, who benefit from consistent and generous government support, dominate the market and keep costs down.

Other recyclers like Redwood Materials have focused on reusing some of the packaging that flows through their sourcing network. The startup has developed a way to integrate a range of different packaging types into larger, grid-scale batteries capable of powering data centers. The stationary storage market has expanded significantly in recent years, allowing Redwood to generate near-term revenue while continuing to build its recycling business.