Scaling Tech vs. Scaling Business: Why the US Can Invent Batteries But Not Manufacture Them
When Natron Energy, a startup once hailed as a pioneer in sodium-ion batteries, announced its liquidation earlier this year, the news barely made headlines outside of energy circles. But the story carries a weight far beyond one company’s demise. Natron’s collapse is not just about a promising technology cut short; it’s a cautionary tale about the structural weaknesses in America’s clean-tech ecosystem.
For decades, the United States has excelled at inventing — churning out breakthrough battery chemistries, novel designs, and bold startups with visionary claims. Yet, again and again, those inventions fail to make the leap from lab-scale prototypes to globally competitive manufacturing. Natron joins a lineage of American energy startups that promised the future and ended up in liquidation papers.
If the U.S. is serious about energy independence and climate goals, it must confront this uncomfortable truth: America is good at inventing batteries but bad at building them.
The US Innovation Engine
On paper, the United States should be the natural leader in energy storage. Its universities and federal labs produce cutting-edge research. Venture capital flows into climate tech. Engineers and scientists continue to push boundaries of what batteries can be.
Natron’s sodium-ion chemistry was a great example. Unlike traditional lithium-ion cells, Natron’s batteries used abundant sodium, sidestepping reliance on lithium, cobalt, and nickel — metals with volatile supply chains dominated by China. Sodium-ion promised lower costs, better safety, and potential applications in grid storage where weight and energy density mattered less than stability and price.
This is the type of innovation the U.S. excels at: identifying the next frontier. In labs, on whiteboards, and in pitch decks, the future looks electric and American.
But between the spark of invention and the flame of commercial viability lies a gulf the U.S. repeatedly fails to cross.
The Commercialization Bottleneck
Turning a battery prototype into a profitable product requires something far more complex than intellectual brilliance. It demands factories, supply chains, skilled technicians, and patient investors willing to endure years — sometimes decades — of losses before profits arrive.
Unlike software startups, which can scale globally with a few data centers and clever marketing, battery companies live and die by their ability to manufacture at scale. A new chemistry proven in a lab is only the beginning. Each step toward commercialization — pilot lines, small-scale manufacturing, customer testing, and eventually gigafactory-level production — multiplies the required capital.
This is where Natron and many of its peers stumble. Venture capital, the lifeblood of Silicon Valley, was never designed for this kind of slow, capital-intensive business. VC investors expect growth hockey sticks and clear exit strategies within five to seven years. Batteries, however, demand patience, infrastructure, and resilience against commodity price swings.
Aquion Energy, which also worked on alternative chemistries, ran out of money in 2017 despite technological promise. A123 Systems, once the darling of advanced lithium-ion, filed for bankruptcy in 2012 after struggling to scale. Each collapse follows the same arc: brilliant invention, premature hype, insufficient capital for industrialization, and eventual liquidation or acquisition at fire-sale prices.
China’s Scaling Moat
While American startups burn out, China continues to pull ahead. Over the past two decades, China has methodically built a complete battery ecosystem — from raw material mining and refining to large-scale cell manufacturing and recycling.
Government support has been decisive. Subsidies for manufacturers, guaranteed demand through state-owned utilities and automakers, and patient state-backed capital have created an environment where battery companies can focus on scaling rather than survival. The result? China now controls over 75% of global lithium-ion cell production capacity and dominates the refining of critical minerals like cobalt and graphite.
This dominance is not merely about cheap labor, as some assume. It’s about deliberate industrial strategy. Gigafactories in China operate at a scale and efficiency that makes it nearly impossible for a small American startup to compete on cost. Even if Natron had succeeded in scaling a pilot line, its sodium-ion cells would have faced head-to-head competition with Chinese manufacturers who could undercut pricing while ramping production far faster.
Policy vs. Reality in the US
The United States has not been entirely asleep. The Inflation Reduction Act (IRA) of 2022 injected historic levels of funding into clean energy, including incentives for domestic battery production. Tax credits, grants, and subsidies are designed to close the competitiveness gap.
But policy in America has two problems: scale and stability.
First, the sheer size of investment needed to build a robust battery manufacturing ecosystem dwarfs current funding. A single gigafactory can cost upwards of $5 billion. Supporting the entire supply chain — from mining and refining to recycling — requires hundreds of billions more. Federal funding is a down payment, not a comprehensive strategy.
Second, U.S. policy is vulnerable to political cycles. Industrial planning in China stretches decades; in the U.S., it often struggles to survive midterm elections. For startups like Natron, that uncertainty is fatal. Building a battery business requires confidence that incentives, regulations, and demand signals will remain consistent long enough for investments to pay off. Without that, investors balk, and startups fold.
The Pattern of Failures
Natron’s liquidation is only the latest chapter in a long-running saga of American clean-tech failures. Solyndra, a solar company that collapsed in 2011 despite federal backing, became a political football. A123 Systems filed for bankruptcy despite once being hailed as the future of U.S. batteries. Aquion, EnerVault, 24M Technologies — the list of casualties is long.
Each failure chips away at investor confidence. Each fuels a narrative that clean-tech hardware is “too risky” for American capital. And each time, the cycle repeats: innovation at the front end, collapse at the back end, and another opportunity ceded to global competitors.
What Needs to Change
If the U.S. is to avoid watching its clean-tech leadership erode entirely, it must rethink how it supports battery startups. The solution is not more Natron-style headlines but systemic change.
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Patient Capital Models
Battery companies need financing that looks more like infrastructure investment than venture capital. Sovereign wealth funds, pension funds, and federal guarantees can provide long-term support that matches the slow scaling curve of industrial hardware. -
Public-Private Partnerships
The government can reduce risk by co-investing in gigafactories and supply chains. This is not about “picking winners” but about ensuring the ecosystem exists for any potential winner to thrive. -
Workforce and Infrastructure
Even with capital, battery scaling requires skilled engineers, technicians, and manufacturing workers. The U.S. must invest in training programs, technical colleges, and regional hubs that build concentrated expertise in energy storage manufacturing. -
Supply Chain Strategy
Critical minerals remain a bottleneck. Without secure access to lithium, nickel, cobalt, and graphite — or alternatives like sodium and iron — U.S. battery ambitions will remain dependent on foreign supply chains. Long-term contracts, strategic reserves, and partnerships with allied nations are crucial. -
Policy Certainty
Clean-tech investment thrives on predictability. The U.S. needs a bipartisan commitment to energy industrialization that can survive political transitions. Without it, startups will always be exposed to sudden shifts that leave them stranded.
Innovation Without Scale Is a Dead End
Natron’s liquidation is not an isolated story — it is a mirror held up to America’s industrial reality. The United States can invent world-class batteries, but it has yet to prove it can manufacture them at scale. Unless that changes, America’s role in the energy transition will be limited to being a laboratory for others to commercialize.
If innovation is the spark, scale is the fire. Right now, the U.S. has plenty of sparks but little flame. To build a future of true energy independence and climate leadership, America must learn not just to invent the battery of tomorrow but to manufacture it, profitably and sustainably, today.
