Ascend Elements, a battery recycling company, has entered Chapter 11 bankruptcy protection proceedings in the United States. Investors were also hit hard as about $900 million in investment funds became tied up, TechCrunch reported on April 10 local time.

Ascend Elements' bankruptcy protection filing came amid a slowdown in the U.S. electric vehicle market. The Trump administration's cancellation of a $316 million subsidy that had been set aside for a Kentucky plant was also cited as a factor that deepened the funding crunch. At the time, $204 million had been disbursed, and the company had to seek additional capital to cover the shortfall.

The U.S. electric vehicle market has recently been weak. Sales rose ahead of the end of a tax credit last September, but a recovery afterward was not clear. Automakers are also cutting their EV plans in the United States. Volkswagen said on April 9 it would halt production of the ID.4 made at its Chattanooga, Tennessee, plant and switch to producing the gasoline-powered Atlas.

The company had been building a 1 million-square-foot plant in Kentucky, but lawsuits and construction delays continued locally. The battery materials market was also challenging. The market for EV battery cells can face long development cycles by automakers, and required specifications can change. Chinese companies have dominated the market and reduced costs on the back of steady state support.

Ascend Elements' bankruptcy protection filing highlighted the market reality that it is difficult to defend a business with battery recycling technology alone.