The US Department of Energy confirms it has canceled more than $700 million in manufacturing grants

Over the past few weeks, the Department of Energy has been looking at canceling billions of dollars worth of contracts. Now, the federal agency has confirmed that it has canceled $720 million in manufacturing awards.

The cuts affect companies that make battery materials, recycle lithium-ion batteries, and make super-insulated windows.

Energy Secretary Chris Wright combed through contracts concluded during the Biden administration. The Energy Department claimed the projects “missed the mark” and “did not adequately meet the nation’s energy needs,” Energy Department spokesman Ben Dietderich told E&E News.

All of the grant funds were approved by Congress as part of the bipartisan infrastructure bill passed in 2021. The bulk of the funds were awarded in 2023 and 2024; Previously, the Trump administration had used grants awarded between Election Day and Inauguration Day as justification to revoke awards.

There are three startups on the list, all of which were selected for grants well before the 2024 presidential election.

Ascend Elements is improving recycling technology that can transform manufacturing waste and end-of-life batteries into materials needed to make lithium-ion batteries domestically. In October 2022, the company received $316 million for a $1 billion facility in Kentucky.

$206 million has already been disbursed to Ascend Elements, according to federal government records. The company said it is moving forward with its plans using other sources of financing to make up for any shortfall.

Anovion has secured $117 million to reboot technology to produce synthetic graphite for lithium-ion battery anodes. Chinese suppliers control 75% of the synthetic graphite supply chain and produce 97% of all synthetic graphite anodes, according to Benchmark Mineral Intelligence. The startup’s factory is scheduled to be built in Alabama, and so far only $13.8 million has been disbursed, according to a federal database.

Another startup, LuxWall, makes windows that insulate buildings as well as solid walls, a feat that could lead to lower energy use and lower people’s utility bills. The Department of Energy awarded the company $31.7 million to build a plant on the site of an old coal plant near Detroit. The award was awarded in November 2023, although only $1 million was sent to the company, according to government records. LuxWall opened the first phase of its factory in August 2024.

TechCrunch previously reported on the DOE’s efforts to cancel these and other contracts.

The goal of these grants was, in part, to launch startups through a “valley of death” that can capture many promising companies as they move from technology development to commercial deployment. It’s not easy for startups to finance first-of-its-kind factories and facilities, and government grants like these have encouraged private investors to contribute capital. Once operational, it could serve as a model for future factories, strengthening the country’s industrial base.