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The end of consumer electric vehicle tax credits isn’t great, but clawing back federal funding has been even worse.

Trump’s One Big Beautiful Bill took a huge bite out of the climate economy. One segment that emerged largely unscathed, however, is advanced climate tech. Companies working on nuclear, geothermal, battery storage, biofuels, and carbon capture may be shaken by the volatile business environment and a tad worried about provisions such as foreign entities of concern rules that could make their supply chains more complicated. But as of now, they can pretty much proceed with business as usual.
There is one big exception to that, however: The growing ecosystem of electric vehicle charging startups. Not only did OBBBA take a hammer to consumer EV tax credits, Trump also paused funding for key federal charging initiatives on his first day in office. While the startups I talked to were notably blasé about the former situation, executives are seriously worried about how attempts to clawback funding for charging infrastructure will impact the industry as a whole.
The outlook isn’t entirely bleak. Highway fast charging — generally the domain of larger companies such as Tesla, Electrify America, and ChargePoint — has actually seen solid growth so far this year despite the obstacles. But figuring out how to make charging work in urban centers and outlying communities has been a hot market for venture-backed companies over the past few years. And now some of them are facing a moment of reckoning.
“Cities are still pushing forward, but I would say there is a capital-C caution that’s being applied,” Tiya Gordon, founder of the curbside EV charging company It’s Electric, told me. “I think they feel that they need to get it right, and this is true for us as well as a startup. There’s not a margin for error in this environment.”
It’s Electric’s core innovation is siphoning off spare electrical capacity from buildings in cities to run its curbside Level 2, a.k.a. non-fast-charging EV charging network, negating the need for what can be a lengthy and complex grid interconnection process. The company then shares a portion of its revenue with the building owners who agree to the arrangement.
Just days before Trump took office, the startup was awarded $2.2 million from the Department of Transportation’s Charging and Fueling Infrastructure program to deploy curbside charging in Washington, D.C., legally obligated money that the new administration is now trying to rescind. That award remains in legal limbo. “We are proceeding as if we can’t count on that,” Gordon told me. “It’s sand through your fingers in an hourglass.”
That funding came on top of the company’s numerous awards from the Joint Office of Energy and Transportation, an interagency collaboration between the Department of Energy and the Department of Transportation created under the Bipartisan Infrastructure Law. Now the Joint Office has been effectively dismantled as former employees took deferred resignations and Trump has tried to revoke the funding awarded to It’s Electric and other startups.
All of this threatens to shut down a significant source of capital for It’s Electric, as Gordon told me nondilutive funding — largely from federal and state grants — represents nearly half of the company’s total capital raised to date.
Gordon said she sees states stepping into the breach, as climate leaders such as California and New York have thus far stood by their EV expansion plans. But Gordon has already noticed cities employing more diligence than ever when it comes to selecting partners. “They’re really going deep, they’re really taking time, they’re not rushing into any awards. So time is a big factor that represents caution,” she told me. And when it comes to the amount of chargers that cities seem to be looking to build, “the numbers are a little bit more modest.”
She mainly credits this pullback to the whiplash that Trump’s attempt to rescind funding for EV charging has caused. Compared to that, whatever deceleration the end of EV tax credits will cause in consumer uptake is a secondary concern.
“Honestly, that doesn’t really impact us at all,” Jeffrey Prosserman, CEO at Voltpost told me of the tax credits. His company retrofits lampposts in cities and suburbs, turning them into Level 2 EV charging platforms. “At the end of the day, EV adoption will either increase X or Y percent in a given year, but it’s going to continue to increase year over year. We’re past the tipping point, going from early adopters into the mainstream,” he told me.
EV prices are still falling, large businesses still want to electrify their fleets, and self-driving cars — which are far better suited to electric drivetrains — are still getting people excited, all of which should continue to fuel demand for a charging buildout. So while Prosserman acknowledged that nixing the consumer tax credits could “slow adoption by a couple percentage points,” he’s optimistic that the next political cycle will see a resurgence in support.
Like Gordon, however, he is quite concerned about the holdup in funding for both the Charging and Fueling Infrastructure program, or CFI, and its sister initiative, the National Electric Vehicle Infrastructure program, or NEVI. “It creates challenges for the EV charging companies like Voltpost, but it really fundamentally creates challenges for the cities and the general public who expected to have access to charging through these programs,” he told me. “That’s not to say that there isn’t a path forward. It’s just that the path that effectively the entire sector was operating on for the last few years has been reconfigured.”
NEVI is a $5 billion program that aims to build out a national charging network along highways, while CFI allocates $2.5 billion to deploy charging infrastructure in cities, towns, and hard-to-reach areas. Both were stood up in 2021 by the Bipartisan Infrastructure Law.
Politicians, industry analysts, and transportation officials alike have heavily critiqued these programs over the years for appearing to lack urgency, as building a network from scratch has proven to be an enormously complex and cumbersome undertaking. The former executive director of the joint office, Gabe Klein, said at a conference last year that the NEVI program wouldn’t really hit its stride until sometime between 2026 and 2028. Then Trump entered the White House and paused funding for both initiatives, creating a major roadblock for “the entire U.S. EV sector,” Prosserman told me.
Much like It’s Electric, Voltpost started the year by winning its own CFI funding to deploy its chargers in the broader Washington, D.C. region and also secured a number of awards through the Joint Office of Energy and Transportation. With all of that money now tied up in lawsuits challenging Trump’s attempts to freeze the programs, Voltpost’s plans for growth have slowed. “We’re taking a more conservative approach for this year,” Prosserman told me, saying that while the company will eventually seek to raise a Series A it’s “not actively raising that Series A right now, given the macro situation.”
Prosserman said he’s been disappointed to see the general pullback in climate tech venture funding in the first half of 2025. “You have a group of investors who frankly said they are mission aligned, but are now taking a pause, not a stop, given the macroeconomic conditions, and having to wait until the dust settles to see how to reconfigure their portfolios,” Prosserman said. For now, he told me that Voltpost is leaning into its private-sector partnerships such as those with AT&T and Zipcar.
Not all charging companies have experienced this whiplash of funding awards and rescissions, though. SparkCharge, which makes portable, battery-powered fast chargers for commercial fleets and businesses, hasn’t received any NEVI or CFI grant money. The startup primarily serves customers by dispatching off-grid chargers on-demand or setting up stand-alone deployments, which are not core focus areas of either program.
The startup’s Chief Financial Officer David Piperno told me he’s glad that SparkCharge hasn’t relied on such capital, as it’s managed to “become a profitable enterprise with zero incentives, no state funding, no government funding.” That, he said, has allowed the company “to take a different approach to EV charging and be more innovative and have a variable pay-as-you-go model.” So far that seems to be working out pretty well, as it announced $30.5 million in new funding in May through a combination of equity financing and a venture loan.
Reaching former President Joe Biden’s goal of installing 500,000 publicly accessible EV chargers by 2030 still might be a longshot, though, especially as long as the Trump administration continues to target all things EV-related. And yet, charging executives remain relatively upbeat about the sector’s long-term fortunes.
“If you drive one of these vehicles, compared to what you had before, it’s just a superior car, right?” Piperno said, arguing that should continue to power steady consumer growth, even if it doesn’t happen as quickly as experts once predicted. While growth in EV sales increased by 40% in 2023, that slowed to just about 10% last year, as concerns over the availability of charging infrastructure, price, and range persist. “I think everyone thought that [the EV adoption] curve was going to be a lot faster. But I think that’s really normalized over the past few years already, and we don’t, quite frankly, see it normalizing much more than it has.”
At least now, executives told me, there’s more certainty regarding the policy landscape than at the beginning of the year. That holds especially true for startups that are willing and able to operate under the assumption that they might never see much of their recently awarded federal funding — at least anytime soon.
“The expression was, wait and see, wait and see, wait and see,” Gordon told me of Trump’s first months in office and the uncertainty around EV incentives and funding programs. “And now we waited and we saw, and it’s gone. And so we mourn and we move on, right?”
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On Thea Energy’s $100 million Series B, plus more of the week’s big money moves.
Nuclear is once again a dominant theme this week, with fusion startup Thea Energy landing a $100 million Series B that will help it expand its magnet manufacturing capabilities. While $100 million is nothing to scoff at, it somehow sounds modest alongside some of this year’s other deals, which include a $450 million Series A for Inertia Enterprises and $240 million for Shine Technologies. This week also brought the news that small modular reactor startup Newcleo plans to go public via SPAC later this year, bringing to mind the exuberance of the 2021 SPAC boom, in a deal expected to net a cool $429 million.
Elsewhere, gridtech company Utilidata raised fresh capital after (surprise!) pivoting to the data center market, while a standalone battery storage developer and operator is betting there’s still plenty of money to be made in the increasingly crowded ERCOT market.
Thea Energy officially joined the growing ranks of fusion companies to surpass $100 million in total funding this week, raising a $100 million Series B round led by the U.S. Innovative Technology Fund to scale its magnet manufacturing operations as it targets a demonstration reactor by 2030. Thea is a part of the Department of Energy’s Milestone-Based Fusion Development Program, which seeks to accelerate efforts for commercial fusion power. In January, the DOE certified Thea’s preconceptual pilot plant design, making it the first of the program’s eight awardees — who will split $46 million in federal funding — to see its reactor architecture validated.
Unlike many top-funded fusion startups, which are building donut-shaped tokamak reactors, Thea Energy is betting on a stellarator design. Traditional stellarators resemble a helical tokamak, which require manufacturing and installing dozens of huge, twisted magnets, but Thea’s approach deviates from the norm. Instead, it relies on hundreds of small, planar magnets arranged in the more familiar donut-shaped configuration, which the company’s artificial intelligence software controls individually. That enables Thea to create the same complex magnetic field within a far simpler and more manufacturable shell.
Thea plans to use the new capital to build a second facility in New Jersey to complement its existing lab and to double its headcount as it seeks a site for its demo reactor later this year. The startup is aiming to bring its subsequent commercial pilot online by 2034, on par with the timeline laid out by fusion industry leader Commonwealth Fusion Systems. According to Gaetano Crupi, USIT founder and billionaire investor Thomas Tull “believes the stellarator is the right architecture for commercial fusion, and Thea Energy is the company that makes it commercially viable.” As Crupi put it in a press release, that’s because “Thea Energy’s breakthroughs shift complexity from precision mechanical fabrication to software-defined controls.”
Newcleo is the latest small modular reactor startup seeking a quick pathway to the public markets via a SPAC merger, announcing plans to list on the Nasdaq in the second half of the year after merging with a blank-check firm. The deal values the European fuel and reactor developer at $2.4 million, and is expected to deliver about $429 million in fresh capital. It comes just months after Newcleo raised $88 million in a growth financing round as the company expands into the U.S. market while continuing to fund projects across Europe.
Newcleo stands out in the crowded SMR field through its fuel and cooling strategy. It plans to run its 200-megawatt reactors on recycled fuel made from nuclear waste products like recovered plutonium and depleted uranium, and cool its reactors with liquid lead rather than water. Because liquid lead has such a high boiling point, lead-cooled reactors can operate at atmospheric pressure, reducing the need for the complex, high-pressure systems used in conventional nuclear plants and potentially improving safety along the way.
The company has already raised over $760 million to date, and CEO Stefano Buono told the Wall Street Journal that the pending SPAC could carry it through 2028 or 2029. Even that won’t be enough, however, for Newcleo to reach its target of opening a fuel factory by 2031 and bringing a commercial reactor online the following year. Not to mention that SPACs — a once rare go-to-market strategy — have a checkered history in the SMR industry. After NuScale went public via SPAC in 2022, its flagship project collapsed, taking its stock down with it and underscoring the risks that pre-revenue companies face when their early failures unfold in the public markets. On the other hand, shares of Sam Altman-backed startup Oklo’s have surged since it went public via SPAC in 2024, reaching a market cap over $11 billion, though it also has yet to build a reactor.
Newcleo’s capital push may also be tied to its strategic partnership with Oklo, as it has preliminary plans to invest up to $2 billion to develop advanced nuclear fuel facilities in the U.S. in partnership with the SMR pioneer. Earlier this week, the DOE selected Oklo — and by extension, Newcleo — to enter “advanced negotiations” to receive surplus weapons-grade plutonium for use in reactor fuel.
What’s that I hear? Another climate tech company has pivoted to the data center market? While Utilidata — an artificial intelligence-powered gridtech company — initially set out to give utilities granular insight into household-level electricity usage and grid data, it’s now raised a $40 million extension round to accelerate its shift into the data center market. As I wrote following last year’s initial $60 million tranche of Series C funding, Utilidata initially set out to get its hardware module inside residential smart meters — which it managed to do at pilot scale — to enable faster fault detection and eventually even automate load management at the household level.
Now, Utilidata is taking this same principle and applying it to the booming data center market, where so many climate tech companies are finding their first customers. The company developed its AI platform in collaboration with Nvidia, installing its modules on server racks to help data centers optimize power allocation across its facility. The company says it measures power consumption a million times per second, such that if usage on one rack is low, it can reroute electricity to parts of the data center that need it. Much like electric grids, data centers also overbuild their capacity to ensure they can handle sudden spikes in demand or hardware failures. Utilidata wants to tap into that headroom by managing power flow in real time.
Utilidata’s first commercial data center deployment is set to go live next month in Montreal in partnership with European AI cloud provider NexGen Cloud, with the startup targeting a 50% increase in the data center’s usable processing power. It also plans to use this latest funding to increase headcount by 25% this year as it builds out operations at its new Ann Arbor headquarters, which opened in February.
In some later-stage funding news, battery energy storage developer, owner, and operator Goshe Energy Storage just secured up to $40 million in strategic financing from S2G investments. As I wrote last week, S2G recently raised a $1 billion fund aimed at helping growth-stage companies commercialize, though this latest commitment actually comes from a different arm of the firm — its Special Opportunities team. This division focuses on non-dilutive financing, in this case providing Goshe with a HoldCo loan backed by the company’s portfolio of energy storage projects. Rather than lending to a specific project, a HoldCo loan gives Goshe flexible capital that can be used to fund its broader growth.
Founded in 2022, Goshe specializes in acquiring late-stage battery storage projects and getting them over the finish line by securing capital and managing the construction process into commercial operations. Thus far, all of its announced projects are in Texas’ ERCOT electricity market. Alongside this financing announcement, Goshe said that its first project — a 100-megawatt battery storage plant in Bexar County, Texas — is now fully operational after securing $288 million in project financing. The company also expects to bring its second project, a 180-megawatt storage facility, online in the following few months, with two additional ERCOT projects slated to begin construction later this year.
This funding is the latest sign that infrastructure investors have grown comfortable backing battery energy storage projects, with a record 24.3 gigawatts of new battery storage capacity projected to come online in the U.S. this year alone. The wholesale ERCOT market, however, is no longer the guaranteed moneymaker that it was just a few years ago. Between January 2024 and January 2026, ERCOT more than tripled its battery storage capacity, driving battery revenues down as the market has become increasingly crowded. In this landscape, there may be a growing number of stranded projects for Goshe to acquire, though it’ll also have to be increasingly selective.
The American climate movement is beginning to look a lot like AI doomers versus the techno-optimists. It’s a dynamic that is winning local bans – and very little else for now.
On one side, you’ve got the left-leaning insurgent grassroots movement against data centers. In many cases this push is in the name of climate action and environmental justice, with activists citing the risks of pollution from gas-fired power and the potential for strain on existing electricity supplies. But in many, many other cases, this movement is decidedly not about climate action; instead it’s a movement addressing everything from energy prices and power over large corporations to AI use generally.
Or, perhaps the anti-data center movement’s big tent is best summarized in this quote from comedian and activist Ilana Glazer: “The thing that is genuinely waiting for us on the other side of AI and data centers is the collective.”
On the other end of the spectrum, you have a raft of data center-curious centrists, liberals, and, for lack of a better term, capitalists. This diametrically oppositional political force wants to ensure data centers continue being built as states and the federal government figure out how to make policy surrounding them. Yes, they want regulations, but they’ll have to qualify even supporting the idea of a single full state – any state – pausing data centers.
“I tend to find myself in the middle of all of this AI and data center policy, because I don’t think a heavy-handed approach in either direction is smart or productive,” said Tre Easton, vice president of public affairs for the Searchlight Institute, a policy think tank geared toward pushing Democrats into positions more broadly popular in the general electorate. “If you’re doing moratoria in one state and Meta says, okay, fine, they’ll go to a different state where they’ll run roughshod.” He added: “This buildout is happening. Let’s just make the rules. Put out rules of what this should look like.”
I spent weeks talking to activists fighting data centers to better understand their end goals. Right now what folks want to talk about most is moratoria, until industry-specific regulation is in place governing all things energy, water, noise, and labor.
“Our motto is ban, legislate, regulate,” said Ben Dziobek, founder of Climate Revolution Action Network, which is fighting data center expansion in New Jersey. Dziobek’s organization is one of roughly five dozen in the Garden State that have called on newly-elected Democratic Gov. Mikie Sherill to institute a moratorium on data centers, including state representatives from The Nature Conservancy and ACLU.
When I asked Dziobek what he’d like to see after a moratorium, the answer was clear: he wants to see Big Tech pay for the energy transition. “It would be beneficial if we could get companies who are using more load than entire states to build out the clean energy future. Someone’s gotta pay for this. The largest companies in the world have to come in.”
Undoubtedly this movement is increasingly influential and rooted in a now bipartisan concern about data centers founded in valid concerns about data center impacts and the rise of AI. But at least right now, In New Jersey, and so many other Democrat-controlled states, this movement has won little ground outside the local level and no statewide Democratic leader (e.g. governor) has made a data center moratorium their raison d'être. Neither have I seen the push for a moratorium pick up steam in any state known as a deep blue bastion for climate policy. Its greatest achievements by the numbers are the cancellation rate of projects that have faced local pushback (37%, according to Heatmap Pro), the city-wide moratoria in large left-leaning bastions like Denver, and the sheer existence of a federal data center moratorium bill led by progressive celebrities like Sen. Bernie Sanders and Rep. Alexandria Ocasio-Cortez.
In fact, what I am seeing is Democratic statewide leaders rejecting efforts to curtail their development or regulate energy and water usage. In California last year, Gov. Gavin Newsom vetoed a bill requiring data center developers to report their water use. In New York, Gov. Kathy Hochul has so far shrugged off a push for her to back a three-year moratorium on new data centers. In Massachusetts, Gov. Maura Healey supports continuing to foster the state’s data center buildout and the state is preserving its data center sales tax exemption at a time when GOP leaders in other states want to repeal similar subsidies. Colorado legislators abandoned a push to regulate data centers earlier this month, after Washington state did the same.
Perhaps infamously in Maine, the Democrat-led state legislature nearly enacted a two-year moratorium on data center development only to be vetoed by Gov. Janet Mills. Democrats then failed to override the veto.
Some Democratic leaders are taking up the light-touch approach. On Wednesday, Pennsylvania Gov. Josh Shapiro released long-awaited principles for data center developers seeking fast-track permitting processes with state agencies. Under these policies, companies can get permitted more quickly if they abide by a number of energy, water, and labor standards.
On a granular level, even this policy quietly represented a disappointment for climate activists. One of the principles called for data centers to get at least one third of their power from “clean” sources by 2035 – which sounds nice until you realize Shapiro only two years ago was calling for utilities to get at least half of their electricity from carbon-free sources by then. Food & Water Watch, a national group calling for country-wide data center moratoria, blasted a press release going after Shapiro to the media after the principles were released: “[This] is a naive effort to placate widespread data center opposition. It won’t work.”
For climate activists, the best case scenario right now may be blue states taking up bills to regulate the sector as opposed to a blanket moratorium, where the push for a pause functions as leverage. Often these bills are focused on energy costs for consumers, not environmental protection, like in Oregon where last year legislators enacted a measure requiring data center companies to pay for their share of electricity demand. In Vermont this week, the state legislature passed a similar bipartisan data center bill focused on energy affordability, with some restrictions on fossil fuel generation. (Republican Gov. Phil Scott is expected to sign it.)
Indeed, the climate movement’s smartest play could be to push legislation requiring facilities not only pay for their power but ensure it is zero-carbon emissions. So far, Democrat-led bills that would accomplish this goal gained steam this year in other states but struggled to become law before the end of the legislative session too (Washington, for example).
In Illinois, the bill is known as the POWER Act, but despite lots of Democratic support behind it, it’s languishing in committee limbo ahead of the end of legislative session this week. One can imagine Illinois Gov. J.B. Pritzker getting a bill like the POWER Act into law and then running for president as The Guy Who Made Data Centers Cleaner. Heaven knows that’s why folks like Hannah Flath, climate communications manager for the Illinois Environmental Council, are so bullish on the bill. “I think it’ll eventually become law. Just not this session.”
I asked Flath why her organization was so focused on this bill as opposed to a data center moratorium. “We just don’t think it is politically feasible. Especially given how attractive these things are to our governor and some state lawmakers,” she said. “Currently, I view climate work as harm reduction work. This is perhaps a cynical view to have but that’s unfortunately where we’re at. How can we ensure changes happening in the world bring more benefits than they do harms?”
But Flath said that as a push for moratoria grows, it provides pressure on state policymakers to act: “What we’re offering state legislators now is a middle ground solution.”
I suppose for now, we’ll have to see if this side can come together on any solution – let alone a middle ground.
And more of the week’s top news around development fights.
1. Jefferson County, Alabama – A law firm is alleging that police in the city of Birmingham retaliated against a woman for suing developers of a data center. It might just be a wake-up call for data center developers.
2. Mason County, Kentucky – This county is the site of yet another eminent domain debacle and I suggest you pay attention to it because it’s now represented by an outgoing congressman with nothing left to lose: Thomas Massie.
3. Montgomery County, Missouri – A Google data center project celebrated by the White House is facing harsh local backlash.
4. Iron County, Utah – Yet another county is banning data centers and solar energy.
5. Oconto County, Wisconsin – At least one developer is definitely thanking their lucky stars for state primacy over renewable permitting in the Badger State.