The pipeline of US battery materials projects is stalling

The once-rapid investment in battery materials in the US is stalling. Some companies are downsizing, delaying, or canceling projects that don’t fit with the Donald J. Trump administration’s priorities. For other firms, tariffs, technological hurdles, and a lack of demand are preventing projects from moving forward. The result is an industry in partial retreat.

Fueled by a flood of government support in the Inflation Reduction Act (IRA), companies announced 19 US battery component or mineral extraction projects, representing $6.7 billion in planned investment, during the first 6 months of 2023, according to data compiled by the Big Green Machine, a Wellesley College initiative tracking clean technology investments. Since Trump took office, companies have announced only 3 new US projects.

The Trump administration’s campaign to cut government spending on clean technology is signaling to companies that they should slow investment, says Jay Turner, an environmental historian who leads the Big Green Machine. “As soon as Trump was elected, it was clear that the policy environment was going to become very unfavorable,” he says. “Even before he took office, companies were starting to retrench.”

In May, the US Department of Energy (DOE) announced that it would conduct reviews of 179 projects that received DOE awards, with a particular focus on those funded in the final days of the Joe Biden administration.

One is a plant in Connecticut planned by Nanoramic Laboratories to produce a new type of battery binder. Nanoramic won a grant through the DOE’s Office of Manufacturing and Energy Supply Chains (MESC) in December 2024. All MESC grants are now under review, says Matthew Fenselau, the firm’s general counsel, and Nanoramic is working with the DOE to advance through the process.

Two others are a plant that Orbia is building in Louisiana to make the battery electrolyte salt lithium hexafluorophosphate and a facility the company is planning in Georgia as part of a joint venture with Syensqo that will make the battery binder polyvinylidene fluoride. On a conference call earlier this year, Orbia CEO Sameer Bharadwaj warned investors that it was waiting to see what would happen to the MESC grants supporting the projects.

Both had already been delayed last year because of drivers’ slow adoption of electric vehicles. Bharadwaj said on the recent conference call that he still believed the projects were good long-term bets.

“The electrification of transportation has begun,” he said. “Regardless of what we see in terms of policies from the Trump administration, energy storage markets remain robust.”

Loans issued for battery projects through the DOE's Loan Programs Office (LPO) are also at risk. The zinc-based long-duration battery firm Eos Energy closed a $306 million LPO loan in December; it began drawing on those funds but says the department is now reviewing the loan. “We’re in regular contact with DOE. We’re working through the process with them,” CEO Joe Mastrangelo told investors on a May conference call.

Aspen Aerogels canceled plans in February for a Georgia facility that would have manufactured aerogel thermal barriers for batteries. It had been conditionally approved for a $670 million loan through the LPO. On a conference call, Aspen executives told investors that the company would instead invest in smaller projects in Rhode Island, Mexico, and China.

The silicon anode firm Group14 Technologies hoped to start production at its plant in Moses Lake, Washington, in 2024, but the company is waiting for more clarity about Chinese tariffs on US goods, as most of the company's potential customers are in China.

The trade war between the US and China has cooled since the peak of tensions in April, and CEO Rick Luebbe says Group14 aims to start production in 2026. “We still see uncertainty,” he says. “We're prepared to re-accelerate the buildout if conditions stabilize.”

In March, fellow silicon anode producer Amprius Technologies announced that it would monitor changes in battery demand, costs, and tariffs before starting construction on a plant in Colorado and that it may scrap the effort altogether.

The situation is murkier for companies further up the supply chain that are developing projects to mine battery metals or refine them into battery chemicals. Some mining firms argue that the Trump administration’s emphasis on minerals could help mines reach production faster. In March, Trump issued an executive order containing several measures intended to increase mineral production, and the administration has since added lithium projects from Controlled Thermal Resources, Standard Lithium, and Albemarle to a program that could speed up the permitting process.

But Milo McBride, a fellow at the Carnegie Endowment for International Peace who researches the geopolitics of critical minerals, says Trump’s mining initiatives are only part of the picture.

Even when government incentives were flowing during the Biden administration, companies were reluctant to invest in the expensive facilities that turn mined material into battery chemicals. Piedmont Lithium canceled plans for a DOE-supported lithium chemical facility in Tennessee last year because of low prices, and Albemarle delayed a major lithium project for the same reason. Backing mining projects without simultaneously supporting processing into chemicals could leave the US with a half-completed supply chain, McBride says.

“Mineral processing, which is definitely the strategic choke point for the US right now, has really not seen the level of policy attention that it deserves,” he says.

Turner says the slowdown in US battery materials investment is not just a reaction to the Trump administration’s new policies. The IRA prompted a massive number of new battery facility announcements, he says, and there simply wasn’t enough demand to support them all.

In February, Ascend Elements announced that it was scaling back its plans for a battery materials campus in Kentucky. The company originally planned to use two MESC grants to build a facility that would produce cathode materials and their precursors. The company is returning the DOE grant for the cathode portion because of low demand.

In addition to declining government support and weak demand, new entrants into the battery industry are competing against experienced Asian firms. The windfall of grants and tax credits was supposed to help them catch up, but some firms have struggled to get their technology running smoothly.

ICL announced plans to build a lithium iron phosphate (LFP) cathode materials plant in Missouri in 2022 but hasn’t made much progress. In a February conference call with investors, Raviv Zoller, who was then CEO, said the plant would be set back at least 14 months. The delay is partly due to the challenge of using LFP manufacturing technology from Taiwan-based Aleees rather than a Chinese partner. For a project in Spain, ICL is partnering with Shenzhen Dynanonic, a major Chinese LFP producer, and expects the technology to be ready faster.

Evan Hartley, a battery supply chain analyst at the research firm Benchmark Mineral Intelligence, says it’s often difficult for new entrants like ICL and Ascend to match the quality provided by established battery materials manufacturers in Asia.

“Producing cathode material at a commercial scale proved to be a little more challenging than first anticipated,” Hartley says. “The finished product, from a technical perspective, faced a fair bit of competition that it couldn’t match.”

But Chinese companies with sophisticated technology face their own issues. In 2022, a subsidiary of Gotion High-Tech announced plans for an LFP cathode plant in Wayne County, Michigan. But some members of the surrounding community raised questions about the plant's potential environmental impact and the firm’s connection to China. Earlier this year, opponents of the plant won control of the local government and are trying to nix it. The plant is on pause until the issue is resolved, according to the Pioneer, a local newspaper.

Turner says that despite the rising number of delays and cancellations, it’s not all doom and gloom for the US battery industry—especially in the long term. LG Energy Solution recently opened an LFP battery plant in Michigan, and Toyota is set to open a large battery cell plant in North Carolina. Both plants should generate demand for more battery components in the US.

“We're going to see more projects moving forward despite the headwinds,” Turner says. “There are a lot of players that are trying to weather this uncertainty and plan for a transition in the industry, and that’s going to take longer than expected.”