A new study by Rhodium Group and MIT shows that cleaner tech manufacturing investments have been cancelled more than announced in the US in the second quarter. The company has cancelled a project worth $5 billion, but only $4 billion in new investments were announced.
Not only announcements, but actual clean high-tech manufacturing investments also fell by 15%.
Pullback is triggered by the GOP settlement bill. This eliminated a key part of the inflation reduction law. The last quarter was second only to the first quarter of this year, with investments worth $7 billion cancelled.
The latest project to get x was primarily a battery factory, the report says. The industry has encountered new headwinds as one big beautiful bill eased the rise in demand for electric vehicles and eliminating production tax credits to bring out key support for many projects.
The first quarter cancellations were primarily focused on EV production, while battery production was responsible for the majority of production in the second quarter. Still, battery manufacturing remains a key driver for new investments, reaching $8 billion in the second quarter.
The pullback reflects wider cuts in manufacturing investments across the US economy, according to data from the US Bureau of Economic Analysis. Expenses on new factory buildings fell by about a quarter in both the first and second quarters, the first period of consecutive declines since 2020.
Just two years ago, about a year after the passage of the Inflation Reduction Act, the story was very different. Investment in new manufacturing structures reached 2.22%, the biggest change in new investments since 1978.
TechCrunch Events
San Francisco
|
October 27th-29th, 2025
The news is that the US economy grew faster than expected in the second quarter, with gross domestic product rising 3.3%, up from the 3% initially reported by the Bureau of Economic Analysis. Still, if manufacturing investments continue to decline, the long-term strength of the economy may be duller than it looks.
