Saijel Kishan, Bloomberg News
The vast land on Route 85 was intended to be a symbol of American-made manufacturing. The billion-dollar battery factory has risen, bringing thousands of new jobs. The business announced “Get ready for Arizona,” and the governor said the state was excited and even the US president had yelled at the project.
But here, a 214-acre lot will be empty in Buckeye Boom Town, less than an hour from Phoenix. Work on the site has begun, said Shelby Lizaraga, who manages the gas station next door.
Four years after fanfare, battery maker Kore Power Inc. abandoned plans for the Buckeye factory. The company’s chief executive has resigned and has been promised a $850 million federal loan.
The Core is not alone in its destructive ambitions. In Massachusetts, a wind turbine cable plant set up to be built on the site of a former coal power plant has been scrapped. In Georgia, construction of facilities that would create parts for electric vehicle batteries was hanging along the way. In Colorado, lithium-ion battery manufacturers said they will not move forward at their factories, at least for now.
They are one of dozens of planned green factories that have been cancelled, either lagging or shrinking, all hit by rising prices, high interest rates and slow-growing EV demand. According to research firm Atlas Public Policy, Green Factory Investment, which was announced since 2021, has shelved about 9% of Green Factory investments that were announced since 2021. Energy Secretary Chris Wright said his agency is not planning to advance some of the massive loans made to the green manufacturing plant during President Joe Biden’s term.
There is another major threat to this sector right now. Trump’s massive tax and spending package rolls back Biden’s generous green subsidies.
It will be signed into law by Trump on Friday and presenting credits to produce solar and wind energy before it is designed to expire. Additionally, the federal tax credit for electric vehicles will be terminated in September this year, not 2032.
Under Biden, Democrat Congress passed the bipartisan infrastructure law and the Inflation Reduction Act in 2021, dumping hundreds of millions of dollars in clean energy projects incentives. New factories from South Carolina to Michigan and Arizona have been announced, with EVs, batteries and clean energy components set to be fired. Biden and Democrats tried to bring manufacturing back to the US, become independent from the fast-acted, electrified China and bring back a competitive country.
Many of the projects are in red and purple states, protecting their policy against GOP attacks. That idea has now collapsed. (Among Congress members who voted for Trump’s bill were Paul Gozard, a Republican representing the Buckeye.)
Trump said the country has signed it “is going to become a rocket ship economically.” However, fallout could include more clean energy projects and the work they provide, or the work they can have. Tesla Inc. chief Elon Musk accused the X package of “severely damaging” to “future industry.”
It would hurt research firm Rhodium Group’s Hannah Hess’s economic growth, boost his reliance on overseas manufacturers, and slow down other countries investing in green technology.
“There’s also the risk of marginalized investments, a significant amount of money,” she said.
Lithium-ion battery manufacturers such as Kore are facing knock-on effects from the gradual outs of solar and EV credits, in addition to strict rules regarding the use of foreign components. According to the research group Energy Innovation, the former will result in fewer grid batteries installed over the next 10 years. The end of EV credits could halt consumers’ desire for electric vehicles. Furthermore, there is a demand for driving batteries.
Buckeye, a former agricultural town named by Ohio settlers, is a breeding ground for building activity. Near the Kore site is a suburban sprawl, which will become a characterisation of the rapid growth of the Phoenix region. Concrete is poured into the foundation, and rebar piles are stacked on construction sites, where the desert area is transformed into a new area.
Kore executives were scrutinizing 300 sites across the country before settling in Buckeye. The land was cheap, close to major ports on the west coast, and Arizona’s arid climate did not undermine the chemistry of lithium-ion batteries. The company announced the plant in 2021, and plans to begin construction that year, and deploy the battery in 2023. Become Buckeye’s biggest employer and creates 3,000 jobs.
However, as management came up with construction plans, inflation increased costs, but higher interest rates made funding more expensive. And the project fell into the same slow permits that stall projects across the country.
In an interview with Core, Jay Bellows, the current CEO of Core, said that costs increased from $1 billion to $1.25 billion, so he made adjustments to manage expenses and worked proactively to maintain the project. “We were trying to move as quickly as possible,” Bellows said. “But in the end, the costs were really high.” The battery maker was later given a loan commitment from the energy sector.
Kore was approved to proceed with construction in 2024 almost a year after wanting to start producing the battery. And if Trump wins the election, uncertainty threw in the fate of federal green incentives.
At Buckeye’s city hall, about ten minutes from the Kore site, Mayor Eric Orsborn found things to be wrong. The project’s timeline continued to grow long, and delays were drawn out. “Things slipped a little more, I slipped a little more,” he said in an interview in his office.
Core then said it had finished plans to build it in Buckeye 10 days after Trump was sworn in. According to Atlas Public Policy, it was one of 53 of the 715 green factories announced since 2021 that were cancelled.
Matt Shanahan of Marathon Capital, an investment bank focused on the energy transition, says that as policies turn manufacturers into volatile, policy shifts have become darker as manufacturers become volatile. “The rules have changed,” he said.
The pace of cancellations and delays depends on how the market responds to the law, he added, but early-stage projects are particularly at risk. “I think it’s very challenging right now to break the ground with new facilities,” he said, with the surge in data center demand, energy storage could be more resilient.
Kore is currently hunting for existing buildings to move, and with power and infrastructure in place, it saves money and makes it easier to get to the market, Bellows says. Looking back, he said he learned the need to move faster and more efficiently. The company tried, he said, “It’s a long and laborious process and goes to a fully operated factory from the dirt.
Still, other green facilities in the area are moving forward. Queen Creek is currently under construction of a $3 billion EV battery facility with LG Energy Solutions in Queen Creek, a rapidly growing community about 80 miles west of Buckeye. Cranes line up towers in vast areas, and bulldozers kick up the wings of desert dust like a forklift. This project faces its own challenges. Construction was suspended for a while last year, as plans for a larger factory were abolished last year.
However, the factory is currently scheduled to open next year, with LG expected to employ 1,500 workers by 2027. In an April press release, the company said it aims to contribute to the “local battery ecosystem” and will hire it locally.
“It’s a manufacturing powerhouse,” Queen Creek Mayor Julia Wheatley said in an interview, adding that the town is taking a lot of interest in businesses looking to move closer to the factory.
On a Monday in late June, the empty core plot was burnt with heat of over 100f. The nearby desert gave way to farmland, discount shops and nearby plots lined with palm trees. The dairy cows were shaded from the heat, and trucks were stacked on hay bas.
Crossing the road, Joe Skogg, who runs a trucking company, said he wanted to pitch his business to its core. However, he did not see cancellation as a set-off in a growing region. “Back in five or ten years. There will be more manufacturers and warehouses and fewer farms,” he said.
Orsborne, the mayor of the Buckeye, said he was disappointed but not disappointed. He is passionate about the Buckeye population boom that has spurred California’s ports, with big box retailers and cinemas openings, and the core shovel-enabled sites with power, water and infrastructure that are now installed, making them even more appealing for other businesses who want to move around.
“Maybe another green energy will be,” he said.
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