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Government Grants
12 Months Ended
Dec. 31, 2025
Government Assistance [Abstract]  
Government Grants Government Grants
Inflation Reduction Act of 2022 (“IRA”)
On August 16, 2022, President Biden signed the Inflation Reduction Act of 2022 into law. The IRA has significant economic incentives for both energy storage customers and manufacturers for projects placed in service after December 31, 2022. Starting in 2023, there are PTCs, which can be claimed on battery components manufactured in the U.S. and sold to U.S. or foreign customers. The tax credits available to manufacturers include a credit for ten percent of the cost incurred to make electrode active materials in addition to credits of $35 per kWh of capacity of battery cells and $10 per kWh of capacity of battery modules. These credits are cumulative, meaning that companies will be able to claim each of the available tax credits based on the battery components produced and sold through 2029, after which the PTC will begin to gradually phase down through 2032.

One Big Beautiful Bill Act (“OBBBA”)
On July 4, 2025, President Trump signed the One Big Beautiful Bill Act into law, introducing several modifications to the energy-related tax incentives originally established under the Inflation Reduction Act. The OBBBA introduces new limitations related to the sourcing of materials from a prohibited foreign entity starting for taxable years beginning after July 4, 2025. These provisions restrict eligibility for credits where material assistance is received from such entities. Additionally, the PFE-related restrictions include ownership and effective control related provisions concerning 'specified foreign entities' and 'foreign-influenced entities'. The Company has evaluated the OBBBA enacted during the year and determined there is no impact on the financial statements. The Company is evaluating the future impact of the OBBBA; however, it does not anticipate a material impact from either the material sourcing or ownership-related provisions. The Company will evaluate additional guidance as it becomes available.
Since the PTC is a refundable credit (i.e., a credit with a direct-pay option available), the PTC is outside the scope of ASC 740. Therefore, the Company accounts for the PTC under a government grant model. On December 4, 2025, the FASB issued ASU 2025-10, which adds guidance to ASC 832 on the recognition, measurement and presentation of government grants. Early adoption is permitted. The Company’s accounting policy is to analogize to IAS 20, Accounting for Government Grants and Disclosure of Government Assistance, under IFRS Accounting Standards until the Company formally adopts ASU 2025-10. Under IAS 20, once it is reasonably assured that the entity will comply with the conditions of the grant, the grant money is recognized on a systematic basis over the periods in which the entity recognizes the related expenses or losses for which the grant money is intended to compensate. The Company recognizes grants once it is probable that both of the following conditions will be met: (1) the Company is eligible to receive the grant and (2) the Company is able to comply with the relevant conditions of the grant.
The PTC is recorded as the applicable items become finished goods and the conditions in the preceding paragraph are met.
During the second quarter of 2025, the Company entered into tax credit purchase agreement to sell and transfer all of the remaining PTCs related to the production and sale of battery cells and battery modules and electrode active materials produced in calendar year 2024, that were eligible to be claimed on the Company’s tax return. The transferred tax credits were sold at 90% of their value and the cash purchase price of the PTCs was $2,055.

During the fourth quarter of 2025, the Company entered into tax credit purchase agreement to sell and transfer all of the PTCs related to the production and sale of battery cells and battery modules produced through September 30, 2025, that were eligible to be claimed on the Company’s tax return. The transferred tax credits were sold at 90% of their value and the cash purchase price of the PTCs was $10,592.
Cash was received from the buyers in April and November of 2025, after the completed registration requirements were filed through the IRS‑provided electronic portal, inclusive of registration numbers needed to claim the credit on the Buyer’s tax return. Upon the receipt of the cash payments, the Company recorded offsets to the PTC/Grant Receivable account. There were minimal differences between the recorded fair value of the PTC receivable and the amount of consideration received. Any differences will be recognized as an adjustment to cost of goods sold.
The Company recognized PTC credits of $21,259 and $3,789 for the years ended December 31, 2025 and 2024, respectively, as a reduction of cost of goods sold on the Consolidated Statements of Operations and Comprehensive Loss. As of December 31, 2025 and 2024, grant receivable related to the PTC in the amount of $11,028 and $2,283, respectively, is recorded in the Consolidated Balance Sheets.