Kore Power has a new plan after canceling $1.2B battery plant in Arizona

Last week, energy storage startup Kore Power confirmed that it canceled plans to build a $1.2 billion battery plant in Buckeye, Arizona, that it had been working on for years. This revelation, first published in local news, seemed like the latest in a string of setbacks for Western companies trying to forge a battery supply chain in the U.S. and Europe to counter China’s dominance over global production.

At the same time, founder and CEO Lindsay Gorrill announced on LinkedIn that he is stepping down, noting ​“I’m confident it is the right time for the company to embrace its next chapter.” A spokesperson told reporters Kore Power is pursuing ​“a restructuring to provide more benefit to our customers.”

Such auguries rarely portend well for a startup breaking into a difficult, low-margin commodity business. It seemed, for a moment, that the U.S. was getting its own version of Northvolt, the Swedish company that filed for bankruptcy last fall after trying to build a fleet of battery factories in Europe and North America.

But Jay Bellows, who assumed the position of CEO on Monday after three years as president, told Canary Media in an exclusive interview that Kore Power is not walking away from domestic battery-cell manufacturing. Instead, the company hopes to sell its construction-ready property in Buckeye and has begun a nationwide search for existing factory sites to retrofit into a battery plant.

“If we don’t have to wait for a factory to be built and [can] go into an existing facility, that’s huge for us,” Bellows said. ​“You can do a lease and move forward really quickly. I do feel like this will expedite the process for us.”

Retrofitting an existing site could take around a year and a half if key resources like utility hookups are already in place, Bellows said. Besides speed to market, this new approach should ​“save a lot of money.”

Why is Kore Power making this pivot now rather than setting out with this plan initially? Broader political trends may have something to do with it.

Kore Power spent the last three years pursuing a loan from the Biden administration’s Department of Energy. Satisfying the DOE’s Loan Programs Office was ​“quite arduous,” Bellows said, and cost the company several million dollars. In the end, Kore secured a conditional loan for 80% of factory construction costs, up to $850 million.

The Loan Programs Office sprinted to finalize billions of dollars of loans in the last weeks of the Biden administration, but Kore Power’s loan did not make it across the finish line. The Trump administration quickly froze all grants and loans for clean energy initiatives, dimming the prospects for any new loans going out the door.

Thus, Kore Power finds itself heading into the second Trump era without a hefty federal loan in its war chest. Construction costs are now higher than when Kore Power began factory development, Bellows noted. Meanwhile, Chinese producers have kept honing their craft, and battery-pack prices have tumbled lower than ever, ratcheting up the pressure on new U.S. battery aspirants.

Given the state of play heading into 2025, Kore Power’s leadership concluded that the time had come to shelve its $1.2 billion plan to build a state-of-the-art factory from scratch. Outgoing CEO Gorrill was involved in making that decision, said Bellows, who insisted the former executive’s retirement was about taking a well-earned break after ​“years and years of energy and effort.”

The news dealt a blow to economic development plans in Buckeye, the city outside Phoenix that Kore had worked with for years to bring the factory to fruition. But Bellows was sanguine about the future of that site. Buckeye is growing at a rapid clip, he said, and the Kore Power land comes cleared for construction, with grid power and access to the highway.

“It will be gobbled up quickly,” Bellows said, adding that several buyers have already expressed interest.

Even with an existing structure to work from, developing a battery factory is no walk in the park. The dearth of battery-cell production in the U.S. rules out the possibility of snagging a facility outfitted for that purpose, so Kore Power will have to find the best fit among the population of empty industrial buildings.

Battery factories need specific width and height dimensions to accommodate cell production lines, said energy storage analyst Ravi Manghani, who tracks the industry’s supply chain at data firm Anza Renewables. Utilities across the country are struggling to keep up with fast-growing demand from large industrial users, so to avoid lengthy grid upgrades to power the factory, the site needs to have housed some other ravenously energy-consuming activity.

Kore will also need to assemble a workforce capable of high-precision, highly automated battery cell manufacturing; the company had said it would hire 3,000 workers in Buckeye. There are only so many hubs in the U.S. where workers have any experience in battery production. And the prospective community needs to be amenable to signing environmental permits for the chemicals involved in this process.

“Once you factor in all the key requirements you need in a manufacturing facility and the number of brownfield sites, you’re probably counting them on your fingertips,” Manghani said.

U.S. battery cells are still struggling to match the low costs out of China, even with tariffs and supportive tax credits from the Inflation Reduction Act, Manghani said. But Section 301 tariffs on Chinese grid-battery imports are set to rise from 7.5% to 25% in 2026, and President Donald Trump just added a blanket 10% increase on Chinese imports across the board. Thus, U.S. battery producers should be able to sell at an advantage to domestic consumers next year, Manghani said, provided the IRA tax credits stay in effect.

Manghani said the U.S. currently lacks any large-scale production for lithium-iron-phosphate batteries, the chemistry increasingly favored for grid storage due to its safety and cost advantages. But his firm expects two lithium-iron-phosphate cell factories to open this year. Kore Power won’t be the first to reach that milestone but could follow in a couple of years if its revised plans work out.