ABAT Stock Plunges 28.42% as U.S. DOE Cancels $52M Lithium Funding

The share price of American Battery Technology Co. (ABAT) plummeted to its lowest level since October 2025 on October 16, 2025, with an intraday decline of 28.42%. This sharp reversal followed a dramatic 132% rally over seven trading days after the company cleared a key regulatory hurdle for its Tonopah Flats Lithium Project in Nevada, which briefly elevated its market capitalization to $1.3 billion.

The abrupt downturn was triggered by the U.S. Department of Energy’s decision to cancel a $52 million 2023 grant intended to fund a lithium hydroxide production plant. This move, announced just days after the regulatory breakthrough, exposed the company’s heavy reliance on federal funding for capital-intensive projects. The cancellation not only erased recent gains but also slashed ABAT’s year-to-date returns from over 300% to 800%, underscoring the fragility of its valuation amid shifting policy landscapes.

While the Tonopah Flats project had positioned ABAT as a key player in domestic lithium production and battery recycling, the loss of the DOE grant raises critical questions about its ability to secure alternative financing. The company’s strategic focus on battery metals and recent inclusion in the Russell 3000® Index highlight its long-term industry relevance, but short-term volatility reflects broader uncertainties in the energy transition sector. Political and regulatory shifts, particularly under the Trump administration’s climate agenda, further amplify risks for firms dependent on government support.

Investors now face a balancing act between ABAT’s technological advancements and its vulnerability to external financial disruptions. The company’s recent accolades, including a 2025 Voltas Award for recycling innovations, signal potential, yet its market position remains precarious without sustained funding. As the battery metals industry evolves, ABAT’s ability to navigate political and economic headwinds will determine whether its recent setbacks are temporary or indicative of deeper structural challenges.