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Last fall, battery recycling and materials company Redwood Materials quietly walked away from a $2 billion loan offered by the Department of  Energy, the company tells Axios.

Why it matters: Redwood was one of seven companies named in a story that says the DOE under the Trump administration plans to announce canceled loan and loan guarantee commitments.

Most of the seven loan commitments named have already been abandoned in moves initiated by the companies.

Zoom in: "We were right at the finish line and had the opportunity to close, but made a unilateral decision after a careful consideration of Redwood's business priorities," says Alexis Georgeson, VP of government relations and communications.

Redwood applied for the DOE loan in 2021 and was awarded a conditional commitment for $2 billion in 2023. The company stopped pursuing the loan in the fall of 2024, while the Biden administration was still in office.

After applying for the loan in 2021, Redwood raised $2 billion in private funding and in 2024 generated nearly $200 million in revenue. 

"Given our financial strength, continuing with the loan just didn't provide benefit any longer," says Georgeson. "We've actually never received any federal funding."

The intrigue: In addition to Redwood, the other LPO awardees named include Sunnova, Aspen Aerogels, Kore Power and International Recycling Group. All of these companies have said they're stopping pursuit of the DOE loans for various reasons.

That the DOE under the Trump administration is looking to highlight these abandoned loans as cancellations shows how difficult it appears to be to directly cancel loans, particularly finalized ones. 

At the same time, the administration's freezing of IRA funds and tariff threats have caused major volatility for some of these companies, potentially affecting the loans. 

The DOE said in a response: "No decisions have been made on any of these loans."

Zoom out: Under the Biden administration, the DOE's LPO program focused on streamlining its process to be more entrepreneur-friendly. 

But the office was also mindful of making sure it issued loans using rigorous due diligence and stringent terms that could withstand scrutiny and avoid a Solyndra scenario, the solar company that LPO supported under the Obama administration. That meant some loans could take a long time to finalize.

A startup's business forecasts and plans can change significantly over the course of months and years. Business changes can cause delays for government loans, and delays are onerous for a fast-moving, nimble startup.

What's next: We'll be watching for news from LPO about any cancellations as well as if the office intends to issue any new loans to sectors like nuclear, geothermal or carbon capture.  

Why Redwood Materials canceled its DOE loan

After three years of waiting, business plans and markets change.

An aerial view of Redwood Material's battery recycling facility in Reno, Nevada.

Redwood Materials' battery recycling campus outside of Reno, Nevada. Photo: Courtesy of Redwood Materials

Last fall, battery recycling and materials company Redwood Materials quietly walked away from a $2 billion loan offered by the Department of Energy, the company tells Axios.Why it matters: Redwood was one of seven companies named in <a class="gtmContentClick" data-vars-link-text="a story" data-vars-click-url="https://www.semafor.com/article/05/19/2025/us-plans-to-cancel-7-conditional-commitments-for-clean-energy" data-vars-content-id="b82fd62b-dee2-40b5-9cf3-086ff1e31917" data-vars-headline="Why Redwood Materials canceled its DOE loan" data-vars-event-category="story" data-vars-sub-category="story" data-vars-item="in_content_link" href="https://www.semafor.com/article/05/19/2025/us-plans-to-cancel-7-conditional-commitments-for-clean-energy" target="_blank">a story</a> that says the DOE under the Trump administration plans to announce canceled loan and loan guarantee commitments.

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Why Redwood Materials canceled its DOE loan

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