Defense Funding Revives U.S. Battery Startups After EV Incentive Cut

When the One Big Beautiful Bill eliminated tax breaks for electric-vehicle batteries, many U.S. startups faced a sharp drop in projected sales. In response, the Department of Energy unveiled a $500 million grant initiative to bolster a home-grown battery supply chain focused on national-security needs. Coreshell, a battery-materials venture, was awarded $50 million to expand its metallurgical silicon-anode manufacturing, while Lilac Solutions earned $100 million to construct a processing facility on Utah’s Great Salt Lake capable of producing 5,000 metric tons of lithium carbonate annually by 2028.

Nth Cycle also received $100 million to build a plant that will recycle black-mass from used lithium-ion batteries into new lithium and nickel compounds. Executives say the Pentagon’s demand for lightweight, high-performance batteries is now a primary market, although automotive manufacturers still plan future growth. The grants reflect a broader governmental view that, despite skepticism toward EVs, batteries remain essential to modern defense capabilities.