Ascend Elements announced Friday that it has begun Chapter 11 bankruptcy proceedings in the United States, a major blow to investors who have poured nearly $900 million into the company.
Ascend CEO Lynne Austin announced the decision in a post on LinkedIn. He said the company faces “insurmountable” financial challenges.
Ascend’s filing comes amid a softening U.S. electric vehicle market, likely exacerbated by the Trump administration’s decision to cancel a $316 million subsidy for a Kentucky facility under construction. At this point, $204 million had been paid, but Ascend needed to find additional capital to make up the shortfall.
The US EV market has recently been in a difficult situation. Sales soared before the tax credit expired last September, but have not fully recovered. Analysts expected potential buyers this year to bring forward their purchases to take advantage of credit, but that didn’t help ease automakers’ fears.
Since then, several automakers have scaled back plans for new EVs in the United States. For example, Volkswagen announced 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 valuable critical minerals from scrap and used batteries. The company says its process limits the number of steps required to convert shredded waste into new cathode precursor material.
The company is building a 1 million-square-foot facility in Kentucky, but has been plagued by lawsuits and delays, according to local reports.
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Like many battery startups, Ascend was entering a difficult and cutthroat industry. The largest market for battery materials is EV cells, but lead times for automakers are long and specifications are known to change over time. Chinese manufacturers, benefiting from stable and generous state support, are dominating the market and driving down costs.
Other recycling startups, such as Redwood Materials, have pivoted to reusing some of the packs that flow through their sourcing networks. The startup has developed a way to incorporate different types of packs into large grid-scale batteries that can power data centers. The stationary storage market has exploded in recent years, allowing Redwood to generate short-term revenue while continuing to build out its recycling business.
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