The clean tech boom in the U.S. is hitting the brakes — and hard. A fresh report from Rhodium Group and MIT shows that in Q2, more clean tech manufacturing projects were canceled than actually announced. Let’s break that down: companies scrapped a jaw-dropping $5 billion worth of projects, while new investments only added up to $4 billion. On top of that, actual investments (the real money moving, not just flashy announcements) dropped another 15%. Ouch.
So, what’s going on? A lot of this slowdown ties back to the GOP’s reconciliation bill, which pulled the rug out from under the Inflation Reduction Act. Remember, the IRA was the big piece of legislation that lit a fire under U.S. clean tech by offering juicy tax credits and incentives. Without those supports, companies are now hitting pause, especially in high-cost areas like EV and battery production.
The latest round of cancellations? Mostly battery factories — the very backbone of the EV revolution. Earlier in the year, the cancellations were more focused on EV production lines, but now it’s batteries taking the hit. Ironically, despite the cuts, battery manufacturing still managed to attract $8 billion in new investments in Q2. It’s messy, but batteries remain the heart of this clean tech tug-of-war.
Here’s the bigger picture: U.S. manufacturing overall is showing cracks. For the first time since 2020, investments in new factories fell for two straight quarters. That’s a big shift compared to just two years ago when the Inflation Reduction Act had manufacturing growth at its strongest since the late 1970s.
Now here’s the kicker — while U.S. GDP grew at a healthy 3.3% in Q2 (better than expected), the slowdown in manufacturing investments could signal shaky ground ahead. In other words, the economy looks strong on paper, but if clean tech and factory investments keep stalling, the long-term outlook might not be so shiny.
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