Michigan battery maker Our Next Energy laid off 29 employees earlier this month after its largest electric vehicle customer "suddenly and unexpectedly cancelled its contract," the company told state employment officials.

The Novi-based firm said in a notice to Michigan's employment agency that it laid off engineers, managers, technicians and others on Jan. 6. The state didn't get the layoff notice until a week later, but Our Next Energy said it wasn't able to provide the usual 60 days of notice required by federal law due to the unnamed EV customer's sudden departure.

Our Next Energy representatives didn't immediately respond to a request for comment Wednesday.

On Jan. 7, a day after the layoffs, the company said it was suspending its EV battery investments and would focus on making batteries used for rail, defense and utility-scale energy storage systems instead. It said the changes resulted in a 45% workforce reduction.

The Our Next Energy pivot comes as the U.S. EV battery industry at large struggles with demand that hasn't met expectations. The company, however, sees growing demand in the other areas for domestically-made batteries, which "is expected to enable cash-flow breakeven by the end of 2026."

“Our business turnaround in 2025 focused on fundamentals — reducing operational costs, diversifying away from automotive EVs, and securing new purchase orders that demonstrate strong product-market fit,” Founder and CEO Mujeeb Ijaz said in the Jan. 7 announcement.

Our Next Energy originally planned to outfit a large building in Van Buren Township for EV and other battery production, and it was awarded up to $237 million in state taxpayer subsidies for the project. But much of the building remains vacant and is listed for lease. Ijaz told The Detroit News in November that about 50 employees were working on battery cell production in one part of the building, but 60% of the building, originally slated for EV battery production, was being repurposed by the landlord.

As of late last year, the Michigan Economic Development Corp. said it had disbursed $70 million in subsidies for the project. Payments were paused as the agency sought to understand the company's next plans. The agency said Wednesday it has made no further payments to the company.

The company said it's finished retooling to make a new type of lithium iron phosphate battery cells at the Van Buren Township facility. The new type of batteries are "engineered for extreme operating environments," the firm said, for defense drones, underwater systems and deep-sea mining platforms.

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