Why new plants are built but not producing

Manufacturing plant construction delays increasingly appear after the building is finished, when power, permits, tools and customer qualification must converge on one start of production date. Leading manufacturers are managing that final stretch as one network of priced obligations shared by every team and vendor involved.

ManufacturingSegeta Insights
Manufacturing
The number$$1.3M

a day of delayed start of production at a 20 GWh battery plant

What is at stake

Each month of SOP slippage on a composite 20 GWh battery cell plant could put about $$38 million at risk.

Where days are lost
  1. Building handover and utility energization
  2. Tool and line installation
  3. Qualification and PPAP

The construction of a new plant and the launch of production are usually managed as consecutive projects, with a formal handover between them. In practice they overlap, and the dates that decide start of production (SOP), including permanent power, discharge and air permits, tool acceptance and customer approval through the production part approval process (PPAP), sit with utilities, agencies, equipment makers and customer quality teams. A building can therefore be finished while the plant remains months from saleable output.

Those months now carry a high price for owners and investors. A Financial Times analysis reported by the National Association of Manufacturers in August 2024 found that about 40 percent of the largest manufacturing projects tied to the Inflation Reduction Act and the CHIPS Act, worth $$84 billion, had been delayed or paused.1 This article examines where start of production delays originate, what each day costs and what plant and finance leaders can do now.

New plants are reaching launch as capital tightens and labor stays scarce

Construction spending on US manufacturing facilities ran at a seasonally adjusted annual rate of about $$169.8 billion in July 2026, down 21.2 percent from a year earlier.2 The decline is likely to reflect, in part, a wave of battery, semiconductor and EV plants moving out of heavy construction and into fit-out, commissioning and ramp, where schedule risk shifts from the general contractor to the operator. The capital that remains is less forgiving: E2 counted $$34.8 billion of clean energy projects cancelled, closed or downsized in 2025, against $$12.3 billion of new announcements, and Rhodium Group recorded a further $$1.7 billion of cancelled clean manufacturing projects in the second quarter of 2026.34

Labor is the second constraint on every launch plan. The Manufacturing Institute and Deloitte estimate that US manufacturers could need 3.8 million new employees between 2024 and 2033, and that 1.9 million of those jobs could go unfilled.5 In 2023, TSMC pushed production at its first Arizona fab from 2024 to 2025, citing a shortage of skilled workers, before reporting high-volume production in the fourth quarter of 2024.67 Intel's Ohio campus, once due for completion by the end of 2026, now expects its first plant in 2030.8

Manufacturing plant construction delays concentrate at three handoffs

In our experience, the building is rarely the last item to finish on a new plant, and the capital at stake is concentrated in the plant types with the most complex launches. Amplify Cell Technologies described its 2026 decision in Mississippi as "deferring the installation of manufacturing capacity," moving production from 2027 to 2028 while construction continued.9 Three handoffs account for most of the days that separate a finished shell from saleable output.

Battery and EV plants accounted for most of the clean factory investment cancelled in 2025.

Exhibit 1Battery and EV plants led clean factory cancellations in 2025Investment cancelled, closed or downsized in 2025, $$ billions (sectors overlap)
EV21.6
Battery and storage21.1
Solar2.2
Hydrogen1.5
Wind1.3
Grid and transmission0.15

Source: E2, Clean Economy Works: December 2025 Analysis, 2026

01Building handover and utility energization

The general contractor turns over the shell against a certificate of occupancy, while the utility, the fire marshal and state environmental agencies control permanent power, water discharge and air permits on their own timelines. These dates usually sit in correspondence held by facilities and environmental, health and safety staff, outside the master schedule that the launch team uses.

02Tool and line installation

Coating, formation, lithography or stamping lines arrive from different equipment makers, each with its own installation crew, utility requirements and site acceptance test. A two-week slip in process water, compressed air or cleanroom certification can idle a vendor crew that is already committed to another customer's site.

03Qualification and PPAP

Customer quality teams need run-at-rate trials, capability studies and PPAP submissions before they release volume orders, and each depends on stable tools and trained operators. When those trials move, the customer's own vehicle or product launch moves too, and the plant's first revenue follows.

A connected launch model manages obligations across teams and vendors

Leading manufacturers are beginning to manage the months between building handover and SOP as a network of obligations, each with an owner, a deadline and a cost for every day it stays open. A live layer reads the systems already in use, including SAP or Oracle, Primavera P6 or Microsoft Project, equipment vendor reports, email and site messaging, and runs a four-step loop:

  1. Detect

    risk where it first appears, such as a utility notice that the permanent substation feed will energize late.

  2. Explain

    which installations, trials and customer milestones depend on it, from formation commissioning to the automaker's PPAP date.

  3. Recommend

    recovery options with owners and expected impact, such as a temporary power lease for commissioning or a resequenced line installation.

  4. Execute and track

    each agreed action to closure, measuring the SOP exposure retired in days and dollars.

The same record can give customers, equipment vendors, the utility and state incentive agencies one current view of dates and commitments. Artificial intelligence does the reading, linking and drafting across thousands of messages and reports, while plant heads, launch directors and finance leaders remain accountable for every judgment and commercial decision.

A delayed SOP can cost a 20 GWh battery plant about $$1.3 million a day

The cost of a start of production delay is the daily value a new plant forgoes or consumes when SOP slips, including lost contribution margin, deferred production incentives, financing carry on installed capital and the wages of a workforce hired ahead of output.

Each month of SOP slippage on a composite 20 GWh battery cell plant could put about $$38 million at risk.

Exhibit 2. Estimated daily cost of delay for a composite 20 GWh battery cell plant in early ramp

ComponentBasisEstimate per day
Contribution margin forgoneAbout 13,700 kWh a day, assuming 25 percent of nameplate in early ramp; assumed margin of $$14.50 per kWh, about 12 percent of a North American pack price 44 percent above China's $$84 per kWh 11About $$199,000
Section 45X production credit deferredSame output at up to $$35 per kWh for battery cells, where the plant qualifies 10About $$479,000
Financing carry on installed capitalCapital cost of about $$2.0 billion at more than $$100 million per GWh; assumes 80 percent spent at an 8 percent cost of capital 12About $$351,000
Hired workforce waiting on outputAssumes 1,000 production operators for 8 hours at $$30.21 an hour 13About $$242,000
TotalSum of the four componentsAbout $$1.27 million

Source: Segeta estimate based on Section 45X guidance, BloombergNEF, Benchmark Mineral Intelligence and Bureau of Labor Statistics data; ramp, margin and financing assumptions are illustrative.

On these assumptions, a 30-day slip puts about $$38 million at risk and a 60-day slip about $$76 million. Lower spending on materials, energy and scrap offsets part of that exposure, as do training builds and equipment vendor delay provisions, yet in our experience vendor provisions are capped and seldom cover delays caused by a utility or a permitting agency.

What plant heads and launch directors can do now

  1. 01Map the obligations between handover and SOP

    Start with the thirty to fifty commitments that would move SOP, from permanent power and air permits to site acceptance tests and PPAP, and name an owner on each side of every handoff.

  2. 02Price each launch milestone before it slips

    Attach a daily cost of delay to every milestone on the path to SOP, so a utility or vendor slip is discussed in dollars on the day it is reported.

  3. 03Put utility and permit dates in the launch schedule

    Energization, discharge permits and occupancy certificates belong in the same view as tool installation, updated from agency and utility correspondence as it arrives.

  4. 04Sequence hiring against verified line readiness

    Tie operator start dates and training cohorts to tool acceptance dates, so a slip in installation adjusts the hiring plan within days.

  5. 05Measure the time from signal to action

    Report monthly how many days pass between the first evidence of a launch risk and the assignment of a recovery action.

Manufacturers cannot control utility construction schedules, equipment makers' backlogs or the pace of their customers' programs. They can control how quickly a warning in one team's inbox becomes a decision across all of them. Plants that manage SOP as a set of live, priced obligations are likely to reach volume sooner and protect the incentives and customer programs that justified the investment.

Questions leaders ask

Why do new manufacturing plants start production late?

New plants often start production late because power, permits, tool installation and customer qualification sit with different teams and vendors. The building can be handed over on time while permanent energization, site acceptance tests or PPAP approval slip, and each of those dates usually lives in a different system or inbox from the master schedule.

What does a start of production delay cost a battery plant?

On illustrative assumptions, a delayed SOP for a 20 GWh battery cell plant in early ramp could cost about $$1.3 million a day. That estimate combines forgone contribution margin, deferred Section 45X credits, financing carry on roughly $$2 billion of installed capital and the wages of about 1,000 operators already hired.

What is PPAP and why does it affect start of production?

The production part approval process (PPAP) is the evidence package a supplier submits to show that a production process makes parts that meet customer requirements at rate. Customers usually release volume orders only after approval, so a late run-at-rate trial can move a plant's first revenue by weeks.

How many US manufacturing projects have been delayed?

A Financial Times analysis reported by the National Association of Manufacturers in August 2024 found that about 40 percent of the largest manufacturing projects tied to the Inflation Reduction Act and the CHIPS Act, worth $$84 billion, had been delayed or paused. Cancellations of clean energy factories continued through 2025 and 2026.

Notes and sources
  1. National Association of Manufacturers, "Many IRA, CHIPS manufacturing projects delayed," NAM, August 2024, nam.org.
  2. US Census Bureau, "Monthly construction spending, July 2026," US Department of Commerce, September 2026, census.gov.
  3. Michael Timberlake, "Clean Economy Works: December 2025 analysis," E2, February 2026, e2.org.
  4. Rhodium Group, "Clean Investment Monitor: US Q2 2026 update," Rhodium Group, 2026, rhg.com.
  5. The Manufacturing Institute, "Manufacturers need as many as 3.8 million new employees by 2033," The Manufacturing Institute and Deloitte, April 2024, themanufacturinginstitute.org.
  6. "TSMC delays $$40bn chip fab in Arizona due to skilled worker shortage," Data Center Dynamics, July 2023, datacenterdynamics.com.
  7. Arizona Technology Council, "TSMC computer chip fourth quarter results," Arizona Technology Council, January 2025, aztechcouncil.org.
  8. "10 factory construction projects that opened or were canceled," Manufacturing Dive, July 2025, manufacturingdive.com.
  9. "Amplify battery cell manufacturing JV faces more delays," Transport Topics, May 2026, ttnews.com.
  10. Orrick, "Section 45X of the Inflation Reduction Act: New tax credits available to battery manufacturers," Orrick, November 2022, orrick.com.
  11. BloombergNEF, "Lithium-ion battery pack prices fall to $$108 per kilowatt-hour despite rising metal prices," BloombergNEF, December 2025, about.bnef.com.
  12. Benchmark Mineral Intelligence, "Investment in battery gigafactories nears $$300 billion since 2019 as China extends battery dominance," Benchmark Source, January 2023, benchmarkminerals.com.
  13. US Bureau of Labor Statistics, "Average hourly earnings of production and nonsupervisory employees, manufacturing (CES3000000008)," via Federal Reserve Bank of St. Louis FRED, September 2026, fred.stlouisfed.org.