In the second quarter of 2025, the cancellation of clean tech manufacturing plans surpassed new investment announcements for the first time since tracking began in 2018, according to Rhodium Group and MIT analysts. Developers canceled approximately $5 billion worth of manufacturing investments, while only $4 billion in new projects were announced, marking a significant decline from previous quarters. The bulk of the cancellations were related to electric vehicle (EV) and battery manufacturing plans, influenced by policy changes under the Trump administration aimed at ending EV incentives. Notably, General Motors decided to move away from plans to produce EVs at its Orion Assembly Plant in Michigan.
Policy Drives Cancellations
Policy Drives CancellationsThe decline in new project announcements and the scrapping of existing ones were attributed to policy uncertainties, including proposals to terminate tax credits for clean vehicles and impose restrictions on materials from foreign entities of concern. The quarter saw the lowest number of new battery and EV manufacturing announcements since early 2021.
Clean Tech Investments Hold Steady
Despite the decline in new project announcements, actual investments in clean tech manufacturing, energy production, and industrial emissions-cutting projects remained steady at $68 billion, with retail consumer purchases (such as EVs, rooftop solar and heat pumps) and installations accounting for half of this total. The report highlights the contraction in the pipeline of new project announcements across various segments, including utility-scale solar, and anticipates further activity as buyers and developers respond to the changing incentive landscape and hope to utilize credits before they expire under the new budget law.