The US Department of Energy announced it is awarding $500 million in grants to strengthen the domestic battery supply chain, explicitly framing the money around reducing reliance on foreign sources and advancing “American energy dominance” — not clean-energy or EV-adoption goals. The timing is not incidental: the grants arrive months after the One Big Beautiful Bill eliminated federal EV and battery incentives that many of these same startups had built their multi-year business plans around.
Three named recipients illustrate the shift. Coreshell received $50 million to expand manufacturing of its metallurgical silicon anode material. Lilac Solutions landed $100 million to build a lithium-processing facility on Utah’s Great Salt Lake, targeting 5,000 metric tons of lithium carbonate annually by 2028. Nth Cycle received $100 million to build a facility refining “black mass” recovered from recycled lithium-ion batteries. None of the three needed to mention electric vehicles to justify the funding.
Batteries Without the EV, Reframed as a Security Asset
A Coreshell spokesperson put the pivot plainly: “Defense applications of lithium-ion batteries are absolutely playing out in discussions.” Nth Cycle CEO Megan O’Connor was similarly direct: “We’re seeing clear demand drivers from the defense sector. But there’s still that in the automotive space as well.” The Pentagon’s own battery spending is a real and growing market on its own terms — drones, tactical radios, torpedoes, and fighter jets all depend on advanced battery chemistry, and the Defense Logistics Agency’s battery budget has grown sharply from roughly $200 million annually in 2021, even as the broader US automotive industry is still expected to spend nearly $18 billion on battery manufacturing this year despite the incentive cuts.
That $18 billion figure matters because it shows the underlying industrial base didn’t collapse when the incentives disappeared — it simply lost its fastest-growing customer segment. Manufacturing capacity built for EV-scale demand doesn’t become worthless overnight just because a subsidy ends; it becomes underused capacity that a company can, if its underlying product is genuinely versatile, redirect toward whichever buyer is currently willing to pay for it. That redirection is exactly what’s playing out at Coreshell, Lilac Solutions, and Nth Cycle simultaneously, within the same DOE grant round.
A Lesson in Not Building a Business Around One Customer’s Policy Preference
What makes this pivot notable isn’t that battery technology suddenly stopped mattering for EVs — it’s that the companies best positioned to survive a sudden policy reversal turned out to be the ones whose underlying technology, better anode materials, lithium processing, battery recycling, was never actually EV-specific to begin with. The startups most exposed to the incentive cut are the ones whose entire value proposition was priced against a subsidized EV market that no longer exists in its previous form; the ones with technology genuinely useful to multiple industries had a second customer to pivot toward when the first one changed the rules.
The scale of the reframing is worth sitting with: the same underlying lithium-ion chemistry that a policymaker can label a “clean energy subsidy” in one political climate becomes a “national security priority” in the next, without a single materials scientist changing what they’re actually building. That’s not cynicism about either framing — both are genuinely true simultaneously — it’s a plain observation that the same hard technology can be marketed, and funded, through whichever policy lens happens to be ascendant in a given year, and companies that can speak fluently in more than one of those lenses have durably more fundraising and procurement options than ones that can’t.
Coreshell’s move is also instructive on the capital side: alongside the $50 million DOE grant, the company brought on ADS Ventures, the venture arm of aerospace and defense contractor ADS, as a new investor — a direct, structural signal that its cap table is now shaped by who its next real customers are likely to be, not just who believed in its original EV-battery pitch. That kind of investor realignment, arriving at the same time as the government grant, is a much stronger signal of a genuine strategic pivot than a grant announcement alone would be.
What This Means for Philippine Founders
The Philippines’ own EV push — from the e-jeepney modernization program to EV-adjacent financing incentives — carries the same structural risk this story illustrates: a business model built entirely around a single government subsidy or mandate is only as durable as the political coalition that keeps voting for it. Filipino founders building climate-tech, battery, or clean-mobility ventures should ask the same question these American startups were forced to answer under pressure: does the underlying technology have a second, subsidy-independent customer, logistics, telecom backup power, agricultural equipment, disaster-response infrastructure, if the policy environment that currently favors it shifts? Building that optionality in from the start is cheaper than discovering it’s necessary after an incentive gets pulled.
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