Where Clean Technology Capital Is Going, and Why Projects Are Delayed

The ledger for 2026 so far

Start with two numbers from the same report. The clean energy trade group E2 counted $35.4 billion in cancelled US clean manufacturing investment and 52,533 cancelled jobs from the start of January 2025 through June 2026, against $25.5 billion and 36,457 jobs announced over the same stretch (E2, Clean Economy Works, published 20 July 2026). Across manufacturing and power generation together, E2 tallied 214 cancelled, closed or downsized projects since January 2025, about $84.3 billion of lost investment and 160,561 lost jobs, with the generation data running through May 2026.

Now hold those beside a third number. BloombergNEF found that global energy transition investment reached a record $2.3 trillion in 2025, up 8% from 2024 (BNEF, Energy Transition Investment Trends 2026, 26 January 2026). The money is still flowing, and in larger amounts than ever. It is moving to different places, different technologies and different kinds of buyers, and the gap between those two pictures is where most of the delay in our industry lives.

This issue follows that money. We look at what the 2025 US budget law changed, what automakers have written off, where battery factories are now being announced, how venture capital has reorganized itself around the power grid, and what all of it means for the person who wants to buy an electric car next year. We close with a longer view, because capital cycles of this kind have happened before, and the record of how they ended is useful to anyone building through one.

What the 2025 budget law changed

The single largest driver of the US numbers is policy. Public Law 119-21, signed on 4 July 2025 and widely called the One Big Beautiful Bill Act, ended the three main vehicle credits early. According to the Internal Revenue Service, the new clean vehicle credit (30D), the used clean vehicle credit (25E) and the commercial clean vehicle credit (45W) are not allowed for any vehicle acquired after 30 September 2025 (IRS, FS-2025-05, 21 August 2025). A vehicle counted as acquired once a written binding contract was signed and a payment made, so buyers who signed and paid by 30 September could still claim the credit on later delivery.

Charging infrastructure received a little more time. The IRS guidance says the alternative fuel refueling property credit (30C) is not allowed for property placed in service after 30 June 2026 (IRS, FS-2025-05, 21 August 2025). That date has now passed, so any charging site financed on the assumption of that credit has had to find the value somewhere else.

The manufacturing credit, 45X, survived with new conditions. Law firm Kirkland and Ellis summarized the changes in August 2025: wind components sold after 31 December 2027 lose the credit, metallurgical coal becomes eligible through 2029, and the critical minerals credit steps down to 75% in 2031, 50% in 2032 and 25% in 2033 before ending in 2034 (Kirkland and Ellis, August 2025). For tax years beginning after 4 July 2025, a company that is a prohibited foreign entity, or that receives material assistance from one, is ineligible. From tax years beginning after 2026, components must be integrated into a secondary eligible component at the same facility and sold to an unrelated party, with at least 65% of that secondary component's direct material costs coming from US-made primary components.

Power generation credits were split by technology. Under the same Kirkland summary, wind and solar projects had to begin construction by 4 July 2026 or be placed in service by 31 December 2027 to keep the 45Y and 48E credits. Energy storage sits in the longer schedule, with the credit phasing to 75% for construction beginning in 2034, 50% in 2035 and zero from 2036. The clean hydrogen credit, 45V, ends for facilities that begin construction after 2027.

Read together, the law tells capital fairly clearly where it is welcome. Storage, grid-adjacent equipment and domestically integrated supply chains keep their runway, and consumer EV demand support is gone. The cancellation numbers that follow are, in large part, investors responding to that signal.

Automakers write down the first wave

The Rhodium Group and MIT Clean Investment Monitor counted $23 billion of US clean manufacturing cancellations across 24 projects in 2025, and 97% of that, about $22 billion, was in the EV supply chain (Rhodium Group and MIT CEEPR, Clean Investment Monitor Q4 2025, 19 February 2026). The fourth quarter of 2025 alone saw $8 billion cancelled, the largest quarterly total the monitor has recorded. Those cancellations show up on automaker balance sheets as charges.

General Motors took $1.6 billion in the third quarter of 2025 to retool its Orion Assembly plant for combustion vehicles, then $6 billion in the fourth quarter, including $4.2 billion in cash for supplier settlements and contract cancellations (WardsAuto, reporting GM's results of 27 January 2026). That is about $7.6 billion across the second half of 2025. Ford announced on 15 December 2025 that it would take about $19.5 billion in charges tied to its EV overhaul, most of it in the fourth quarter of 2025, ending production of the all-electric F-150 Lightning in favor of an extended-range version (Bloomberg Law, 15 December 2025).

Stellantis followed on 6 February 2026 with charges of €22.2 billion, about $26.2 billion, including $7.7 billion in cash payments over four years (Axios, 6 February 2026). Volkswagen Group's 2025 annual report records about €4.7 billion of charges and goodwill impairment tied to the realignment of Porsche's product strategy, which pushed back several of its electric models (Volkswagen Group, Annual Report 2025). Honda said on 12 March 2026 that it expected total losses of up to 2.5 trillion yen, about $15.7 billion, from reassessing its electrification strategy, a plan that cancels three planned US battery electric models, the Honda 0 Saloon, the Honda 0 SUV and the Acura RSX, and writes down some Chinese operations (Honda, 12 March 2026; Reuters, 13 March 2026).

We read these charges as the cost of building for a demand curve that policy then moved. Each one also contains a reallocation. Ford said on 15 December 2025 that it would spend about $2 billion over two years to repurpose Kentucky battery capacity into a 20 GWh lithium iron phosphate storage business, shipping from 2027 to grid customers first and data centers second (TechCrunch, 15 December 2025). The same factory floor is being pointed at a different buyer.

Battery capital moves to Asia and Europe

The global battery picture looks very different from the American one. Rhodium Group's global monitor found that announced battery manufacturing investment held at roughly $23 billion in each of the first two quarters of 2026, about double the level of the first half of 2025 (Rhodium Group, Clean Investment Monitor Global H1 2026, 10 September 2026). United States announcements in the same half came to $915 million, a record low and the lowest since the Inflation Reduction Act passed in 2022.

Announcements outside China, Europe and the US rose about eightfold from modest levels in the second half of 2025, led by Indonesia, Japan, South Korea and Vietnam (Rhodium Group, 10 September 2026). In China, stationary storage or mixed-use facilities made up 41% of announced battery investment in the first half of 2026, up from 30% in the second half of 2025. Total global clean investment in the first half of 2026 was 17% below the first half of 2025 by Rhodium's count, so battery factories are holding up better than the wider category.

Europe is rebuilding through partnerships. On 28 September 2026 Gotion's board approved three joint ventures with Volkswagen's battery company PowerCo worth about €3.22 billion in total: a cell plant in Sagunt near Valencia in Spain, a cell plant in Šurany in Slovakia, and a lithium iron phosphate cathode plant in Kenitra in Morocco (electrive, 28 and 29 September 2026). The investment agreement was reported as unsigned at the time, and the deal still needs shareholder and regulatory approval. Gotion now cites 8.4 GWh a year for the Slovak plant, against the 20 GWh it announced for the site in 2025, and Volkswagen is selling a 5.3% stake in Gotion, leaving it with about 19%.

That structure, a European automaker sharing ownership with a Chinese cell maker and a North African materials site, reflects lessons from the last cycle. Northvolt, once Europe's flagship cell company, filed for bankruptcy in Sweden on 12 March 2025 (Northvolt, 12 March 2025). Europe's battery announcements in the first half of 2026 were 20% below the second half of 2025, according to Rhodium, and the projects that are moving tend to carry an experienced manufacturing partner and staged financing.

The global totals keep rising

Step back from factories and the aggregate numbers keep climbing. BNEF's 2025 figure of $2.3 trillion broke down as $893 billion for electrified transport, up 21%, $690 billion for renewable energy, down 9.5%, and $483 billion for grids (BNEF, 26 January 2026). China invested $800 billion, the European Union $455 billion, up 18%, and the United States $378 billion, up 3.5%. Clean energy supply investment exceeded fossil fuel supply investment by $102 billion.

The International Energy Agency's forward estimate points the same way. Its World Energy Investment 2026 report, published on 28 May 2026, estimates total global energy investment of $3.4 trillion in 2026, up 5%, with about $2.2 trillion going to renewables, nuclear, grids, storage, low-emission fuels, efficiency and electrification and about $1.2 trillion to oil, gas and coal (IEA, 28 May 2026). Grid investment is estimated at around $550 billion, up nearly 20% from 2025, and power-sector battery spending at more than $100 billion. Nuclear spending is above $80 billion a year, with 78 GW under construction in 15 countries.

Inside the United States the quarterly data has also turned. Rhodium counted $75 billion of US clean investment in the second quarter of 2026, up 22% from the first quarter and the second-highest quarter on record (Rhodium Group, Clean Investment Monitor US Q2 2026, 11 August 2026). Manufacturing investment of $8 billion rose 4% from the prior quarter, ending six straight quarters of decline. Rhodium put total US clean investment for 2025 at $278 billion, up 5% from 2024 (Rhodium Group, 19 February 2026).

The pattern across all three trackers is consistent. Capital is concentrating in grids, storage, firm power and markets with steady policy, and it is thinning in US consumer vehicle supply chains.

Venture money follows the electrons

Private markets have made the same turn, with an extra push from data center demand. Sightline Climate counted $40.5 billion of climate tech venture and growth investment in 2025, up 8%, while deal count fell 18% to 1,545, the fewest since 2020 (CTVC and Sightline Climate, 6 January 2026). Energy took $14.4 billion, up 31%, and fission and fusion together accounted for 44% of energy funding, both at record highs.

The first half of 2026 accelerated the trend. Currence, the firm formerly called Sightline Climate, reported $26.1 billion of climate tech venture investment in the first half, up 55% on the first half of 2025 and the strongest first half since 2022 (ESG Today, 16 July 2026). Data center projects took 34% of all climate funding, up from 3% a year earlier, and deal count fell 25%. PitchBook, which uses a different definition, counted $14.9 billion of climate tech VC deal value in the second quarter of 2026 and $29.2 billion for the half, with six megadeals above $450 million in the quarter (PitchBook, Q2 2026 Climate Tech Report, 11 August 2026).

Exits have opened as well. PitchBook put first-half 2026 climate tech exit value at $28.2 billion, already above the whole of 2025, driven by initial public offerings from Sigenergy, X-energy and Fervo Energy (PitchBook, 11 August 2026). Currence counted a record 152 exits in the half, up 68% (ESG Today, 16 July 2026). BNEF's broader measure found climate tech companies raised $77.3 billion of private and public equity in 2025, up 53%, ending three years of decline, while early-stage venture funding fell for a third year (BNEF, 26 January 2026).

The trackers disagree on totals because they count different things, and we cite each on its own terms. They agree on direction. Money is going to fewer, larger companies that sell firm power, grid equipment, storage and cooling to buyers with large and immediate electricity needs.

What delay means for the driveway

For a household, investment delay arrives as a shorter list of models and a higher effective price. Kelley Blue Book reported that EVs were 10.5% of US new car sales in the third quarter of 2025, as buyers rushed to sign before the 30 September credit deadline, and 5.8% in the fourth quarter (Kelley Blue Book, 13 January 2026). For the full year EVs were 7.8% of sales, against 8.1% in 2024.

The model list has narrowed in specific ways. Ram cancelled its all-electric 1500 REV pickup on 12 September 2025, citing slowing demand for electric pickups (Automotive News, 12 September 2025). Chevrolet ended its BrightDrop electric vans in October 2025, and Ford is replacing the all-electric F-150 Lightning with an extended-range version (Motor1, 2026 discontinued EV list; Bloomberg Law, 15 December 2025). Honda's three cancelled US models in March 2026 remove a mainstream Japanese brand's next generation from the plan (Reuters, 13 March 2026).

Demand has also shown resilience. Rhodium estimated US consumer spending on zero-emission vehicles at about $23 billion in the second quarter of 2026, up 28% from the first quarter and only 3% below a year earlier, with the federal credit already gone (Rhodium Group, 11 August 2026). Battery cost is part of the reason. BNEF's annual survey put the average lithium-ion pack price at a record low of $108 per kWh in 2025, down 8% from 2024, with battery electric vehicle packs at $99 per kWh and stationary storage packs at $70 per kWh (BNEF, 9 December 2025).

For owners, the practical effects are easy to name. Fewer new nameplates means fewer used EVs three to five years from now, longer gaps between model refreshes, and a charging build-out that now depends on private economics after the 30C deadline. Buyers who want an EV in 2027 will likely find good choices, mostly from companies with cost structures built around cheap cells, and a thinner range of trucks and vans.

Every change becomes the new normal

In the spirit of James Burke, whose BBC series Connections (1978) traced how one invention quietly enables the next, we find it useful to look back at another infrastructure boom that ended in a crash. In 1840s Britain, Parliament authorized 805 miles of new railway in 1844, 2,700 miles in 1845 and a record 4,538 miles in 1846, according to the mathematician and historian Andrew Odlyzko (Odlyzko, Collective hallucinations and inefficient markets, 2010). By the end of 1850 about £250 million had been invested, close to half of British GDP, and annual railway spending in 1847 was more than twice the nation's military budget.

The shareholders did badly. Odlyzko records shares in the York and North Midland falling from a high of 120 to 20, and London and North Western shares about 55% below their peak at the end of 1849. He estimates investor losses at roughly a third of the capital raised, around £80 million, and average dividends on ordinary railway shares were 1.83% in 1850 against hoped-for returns near 10% (Odlyzko, 2010 and 2024).

The track stayed. Odlyzko describes a British network of about 2,400 miles in 1845, and his later paper lists 6,621 miles of railway in 1850, about 2.8 times as much in five years (Odlyzko, 2010; Odlyzko, The railway mania of the 1860s, 2024). Trains ran on many of those lines for well over a century, and the network grew to its peak in the early twentieth century. The people who paid for the boom lost money, and the people who came after inherited cheap, durable infrastructure.

The economist Carlota Perez gave this pattern a structure in Technological Revolutions and Financial Capital (2002). She describes each great surge, including the age of steam and railways that she dates from 1829, as passing through an installation period, when financial capital pours into the new technology and often inflates a bubble, and then a deployment period, when production capital takes over and the technology spreads through the whole economy. Between them sits a turning point of crisis and institutional adjustment, and in her account the broad gains to society tend to arrive after the turning point.

We think clean technology in 2026 looks like a sector working through a turning point in some markets while still in installation in others. US consumer EV supply chains are repricing after a policy shift. Grids, storage and firm power are still drawing new money at record levels.

The mathematics explains why the infrastructure outlasts the losses. In 1936 the aeronautical engineer Theodore Wright published Factors Affecting the Cost of Airplanes in the Journal of the Aeronautical Sciences, showing that unit cost falls by a steady fraction each time cumulative production doubles. That relationship, now called Wright's law, means every factory that runs, including those that later fail as businesses, moves the whole industry down the curve. Compounding does the rest: at the 8% annual pack price decline BNEF measured for 2025, prices would halve in a little over eight years.

Each change in technology feels like disruption to the people living through it, and then it becomes the background of ordinary life. Railways became timetables, then commuting, then the shape of cities. The batteries, transformers and transmission lines being financed this year will become just as ordinary, and the useful question for us is how to be one of the companies still standing when that happens.

What we take from it

We build, sell and fund products in this market, so we read the data with our own decisions in mind. These are the moves we are making, and the ones we would suggest to a founder, operator or investor working through the same cycle.

1. Match each product to the buyer whose budget is growing. Grid operators, utilities, storage developers and data center builders are where the 2026 money is, according to the IEA, Rhodium, PitchBook and Currence, and a vehicle or component company can often sell the same technology to them.
2. Model every plan without the credit it currently depends on. The 30D, 25E and 45W credits ended for vehicles acquired after 30 September 2025 and 30C ended for property placed in service after 30 June 2026, so any business case should clear its hurdle rate on hardware cost and operating savings first.
3. Treat supply chain origin as a product feature. The 45X rules on prohibited foreign entities and integrated components reward documented, domestic and allied sourcing, and buyers now ask for that paperwork early in procurement.
4. Build in stages with a manufacturing partner. The Gotion and PowerCo ventures and the Ford storage conversion both reuse existing plants and staged financing, which keeps capital exposure small until demand is proven.
5. Price on the learning curve. With pack prices at $108 per kWh in 2025 and falling, according to BNEF, contracts and product roadmaps should assume cheaper components each year and capture value in integration, software and service.

The railway investors of 1845 left Britain a network that ran for generations, and the capital being written down in Detroit and Tokyo today is already being recycled into storage plants and grid hardware. Our job is to read where the money is moving, build things that compound in value as costs fall, and be ready when the deployment period arrives in each market we serve.