The U.S. Department of Energy (DOE) has canceled $700 million in federal battery and manufacturing grants, marking the second wave of funding reversals this month and signaling a more stringent approach to industrial subsidies.
The move follows an $8 billion grant withdrawal announced on October 2, raising questions about how the Biden administration is recalibrating its industrial policy under the Inflation Reduction Act (IRA).
According to E&E News, the latest cancellations affect five companies, including four in the battery supply chain—Ascend Elements, American Battery Technology Co. (ABTC), Anovion, and ICL Specialty Products—alongside Detroit-based glass manufacturer LuxWall. The DOE stated that the decisions were based on projects being “negative investments” or failing to meet key “milestones,” though it did not disclose which companies fell into each category.
The Office of Manufacturing and Energy Supply Chains, which oversees these grants, has been under pressure to demonstrate accountability amid record public funding for clean energy manufacturing. Together with the IRA and CHIPS Act, the DOE has directed hundreds of billions of dollars toward reshoring critical supply chains, including batteries, semiconductors, and advanced materials. However, these recent cancellations highlight the department’s willingness to reassess projects that may not deliver on promised outcomes.
Among the affected companies, Ascend Elements had been awarded the largest share—$316 million—to build a battery components facility in Kentucky. The company confirmed that it has already received $206 million, which remains unaffected by the cancellation. CEO Linh Austin told E&E News that the company plans to proceed using existing funds, suggesting that the DOE’s move may not derail its short-term operations.
ICL Specialty Products, which received $197.3 million for a phosphate powder plant in St. Louis, said in an SEC filing that it is “reviewing” the DOE’s decision. Anovion, awarded $117 million to build a synthetic graphite plant in Alabama, and American Battery Technology Co., with $57.7 million for a Nevada lithium hydroxide facility, have also been affected. ABTC, which had received $5.7 million before the cut, said it plans to appeal the decision, noting that the President’s National Energy Dominance Council had recently selected its project for expedited permitting.
Meanwhile, LuxWall, a startup developing energy-efficient glass technology, lost its $31.7 million grant for a planned Detroit factory and also intends to appeal. The company’s project had been positioned as part of a broader push to decarbonize the building materials sector—an area less visible but increasingly critical to overall emissions reduction.
The DOE’s sudden reversals may reflect both fiscal tightening and an effort to mitigate political risk. As federal clean energy spending accelerates, scrutiny from lawmakers and watchdog groups has intensified over how grants are awarded and monitored. Industry observers note that the DOE’s opaque explanation—citing “negative investments” and “missed milestones” without further context—underscores the tension between the urgency to deploy capital and the need to ensure returns on public funding.
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