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Li-Cycle's batteries are running low

Rows of low battery symbols

Illustration: Megan Robinson/Axios

Li-Cycle's latest troubles this week underscore the tough road ahead for hardware-heavy startups facing high interest rates and costly construction.

Catch up fast: The battery recycling startup yesterday said it hired Moelis to seek financing options and strategic alternatives.

Between the lines: Like many startups building factories instead of software, it's reliant on financing that's gotten far more expensive, a problem compounded by sky-high construction costs.

Separately: Li-Cycle isn't alone in the struggle. European battery maker Freyr said in its latest earnings call that it had failed to secure anticipated funding from either Norway's government or the European Union.

  • Unlike with Li-Cycle, Freyr indicated that it was having some trouble with its manufacturing process related to one of its core battery technologies.

What we're watching: Li-Cycle's Rochester site had received a $375 million conditional loan commitment from the Department of Energy's Loan Programs Office.

  • The full value of that loan is contingent on Li-Cycle hitting certain milestones. The Toronto-based company hasn't yet met the requirements to receive any of the potential $375 million, a DOE spokesperson previously told Axios.
  • Li-Cycle did not immediately return a request seeking comment.
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