EV battery startup Our Next Energy to exit most of its factory space

Core Insights - Our Next Energy is planning to vacate a significant portion of its factory space in Van Buren Township, Michigan, where it had intended to invest $1.6 billion and create 2,112 jobs, due to uncertainties in the electric vehicle (EV) market [1][2] - The Michigan Economic Development Corp. has halted further payments of taxpayer funds, totaling $70.2 million disbursed so far, under the current agreement supporting the project [2][7] - The company has adjusted its business strategy in response to delays in automotive contracting and a lack of demand for EVs, which has led to a dramatic pullback in investments from automakers [3][5] Company Developments - Our Next Energy initially aimed to establish a domestic lithium iron phosphate battery plant, supported by $237 million in taxpayer subsidies, to provide a more sustainable battery option for automakers [4] - The company has created approximately 70 jobs and invested $117.6 million in eligible costs under its agreement with the state, employing a total of 180 people in Novi, Michigan [6] - The company will continue to operate its cell production pilot line in Van Buren Township despite the planned reduction in factory space [6] Economic and Regulatory Context - The demand for EVs has not materialized as expected, leading to a collapse in the business case for battery plants, exacerbated by the rollback of EV tax credits and fuel emission regulations by the Trump administration [5] - The Michigan Economic Development Corp. is in ongoing discussions with Our Next Energy to assess the potential impacts on the incentive agreement, while no new disbursements will be made until the agreement is updated [7]