Ascend Elements announced Friday that it has filed for Chapter 11 bankruptcy in the U.S., a major blow to investors who had sunk nearly $900 million into the company.
Linh Austin, AscendIts CEO, announced the decision at a post on LinkedIn late Thursday night. He said the company faced “insurmountable” financial challenges.
Ascend’s filing comes amid a slowdown in the U.S. electric vehicle market and was likely exacerbated by the Trump administration’s decision to cancel a $316 million grant intended for a facility in Kentucky that was under construction. At the time, $204 million was disbursed, but Ascend had to seek additional capital to cover the shortfall.
The electric vehicle market in the U.S. has taken a bad turn recently. Although sales rose before the tax credits ended in September last year, they have not recovered enough. Analysts predicted that customers who might have bought this year went ahead with their purchases to take advantage of the credit, but that did little to assuage automakers’ fears.
Since then, several automakers have withdrawn their plans for new EVs in the US. For example, Volkswagen said yesterday that it is ending 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 end-of-life batteries. He says his process reduces the number of steps needed to convert shredded waste into precursor materials for new cathodes.
The company is building a 1 million-square-foot facility in Kentucky that has been plagued by lawsuits and delays, according to local references.
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Like many battery-related startups, Ascend was entering a challenging and incredible industry. The largest market for battery materials is cells for EVs, but automakers have long lead times and their specifications are known to change over time. Chinese manufacturers, benefiting from steady and generous government support, dominate the market and drive down costs.
Other recycling startups, such as Redwood Materials, have turned to reusing some of the packages that flow through their supply chain. The startup has developed a way to integrate a number of different types of packs into larger, grid-scale batteries capable of powering data centers. The fixed storage market has exploded in recent years, allowing Redwood to generate short-term revenue while it continues to build its recycling business.
