Aspen Aerogels makes fireproof insulation that sits between battery cells in electric vehicles, preventing thermal runaway when lithium-ion batteries overheat. Their PyroThin material—ultra-thin aerogel that's 99% air—had become the standard solution for GM's entire Ultium platform and was being designed into vehicles from Toyota, Stellantis, Mercedes, and Porsche. At roughly $900 per vehicle for large batteries, the economics were compelling. EV production was surging, and Aspen was riding the wave.

Then the wave crashed. The stock has fallen 80% from its highs, trading at levels that suggest investors believe the entire growth story was a mirage. What happened wasn't a technology failure or competitive displacement. It was something simpler and more brutal: their largest customer stopped buying.

When Your Biggest Customer Hits the Brakes

General Motors represented approximately 70% of Aspen's thermal barrier revenue. In October 2024, GM dramatically cut Ultium EV production, citing the need to determine "natural demand" without the artificial support of regulatory mandates. Post-election changes eliminated CARB waivers, weakened CAFE standards, and cast doubt on the $7,500 EV tax credit. Suddenly, automakers weren't forced to overproduce EVs for compliance. They could build what actually sold.

The numbers tell the story. Aspen's Q4 2024 revenue hit $123 million. Their Q1 2025 guidance? Between $75-95 million—a 60% collapse in the quarterly run rate. EBITDA guidance went from $25 million positive in Q3 2024 to potentially negative $14 million in Q1 2025. GM indicated EV demand would remain soft through early 2026, with 83,000 vehicles sitting in inventory at year-end. For Aspen, watching those unsold trucks and SUVs pile up meant watching their revenue evaporate.

The Strategic Retreat

In response, Aspen made the kind of decision that destroys growth stories overnight. They halted construction on Plant 2—a $670 million facility in Georgia designed to support revenue targets of $1.2-1.6 billion. This wasn't a delay; it was a complete reversal of their expansion strategy. Instead of building massive domestic capacity, they pivoted to a "modular" approach using external manufacturing in China.

The company cut 10% of its workforce, reduced annual costs by $35 million, and pulled fixed expenses back to 2023 levels. For 2025, full-year adjusted EBITDA guidance sits at just $7-15 million, compared to $90 million in 2024. This is a company in survival mode, not growth mode.

A Bet on Timing, Not Technology

The collapse wasn't about Aspen's technology becoming obsolete or competitors offering better solutions. The aerogel still works. The safety benefits remain real. Major automakers still plan to use it in future platforms. The problem is purely timing and market structure. Aspen built infrastructure and hired talent for an EV boom that regulatory changes and consumer hesitance put on pause.

The bull case requires believing EV adoption will resume after this reset, that GM and others will ramp production again, and that European automakers will finally launch their delayed platforms later in 2025. The bear case points to customer concentration risk, stranded capital investments, and the uncomfortable reality that without regulatory forcing functions, EV adoption might proceed much slower than the 2021-2023 hype suggested.

At current valuations, the market is pricing Aspen as if the EV transition might not happen at scale—or at least not fast enough for this company to survive long enough to see it. They're not building the future anymore. They're trying to outlast the present.