Fluence Energy, Inc.
For the period ended Mar 31, 2025. Filed May 8, 2025.
View on SEC.govAbout this filing
A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Mar 31, 2025 · Filed May 8, 2025
FLNC$5.40+2.5%Stored close · as of Nov 9, 2026
What changed in Risk Factors?
Read the current filingPrevious report: 10-Q
Period ended 2024-12-31; filed 2025-02-10.
0001868941-25-000015
Item 1A. Risk FactorsCurrent report: 10-Q
Period ended 2025-03-31; filed 2025-05-08.
0001868941-25-000060
Item 1A. Risk FactorsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 33 previous paragraphs and 47 current paragraphs.
28 unchanged; 4 reworded; 14 added; 0 removed; 1 previous and 1 current paragraphs rearranged.
Tables are not compared: 0 previous and 0 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (14)
Current report
Our business and customer demand for our offerings depends in part on government incentives and/or regulations relating to or mandating the use of renewable energy and/or energy storage. The reduction, elimination, modification, expiration, or determination of inapplicability of such government incentives or regulations could reduce customer demand for our energy storage solutions, which could lead to adverse effects to our business, operating results, and cash flows.
Current report
Federal, state, local, and foreign government bodies provide incentives and/or regulations relating to mandating or encouraging use of renewable energy and/or energy storage to owners, end users, distributors, system integrators, and manufacturers of renewable energy and energy storage products and solutions to promote renewable electricity and energy storage in the form of rebates, tax credits, other financial incentives, procurement requirements and market structures. The range and duration of these incentives and regulations varies widely by jurisdiction. Our customers typically use our energy storage solutions for grid-connected applications wherein power is sold under a power purchase agreement or into an organized electric market. The reduction, elimination, modification, expiration, or determination of inapplicability of government incentives or regulations related to mandating or encouraging the use of grid-connected renewable electricity and/or energy storage may negatively affect the competitiveness of our offerings relative to conventional renewable sources of electricity and could harm or halt the growth of our industry and our business. These incentives and/or regulations may expire on a particular date, end when the allocated funding is exhausted or be reduced or terminated as renewable energy adoption rates increase or as a result of legal challenges, the adoption of new statutes or regulations or changes to existing regulations, new regulatory guidance, or the passage of time. Reductions, modification, terminations, or determination of inapplicability of government incentives and/or regulations may occur without warning. There is no guarantee that such policies, regulations, and incentives will continue to exist in current form, if at all. The reduction, modification, elimination, or expiration of such government incentives and/or regulations or determination of inapplicability of such government incentives or regulations could reduce customer demand for our offerings, lead to a loss of customers and potential customer projects, and could harm our business, operating results, and cash flows.
Current report
For example, in August 2022, the United States passed the Inflation Reduction Act of 2022 (the “IRA”), which includes incentives that support the adoption of energy storage solutions and services, including the “technology neutral” Investment Tax Credit (ITC) and Production Tax Credit (PTC) for projects placed in service after calendar year 2024, and changes to the non-“technology neutral” ITC and PTC for projects that started construction prior to the end of calendar year 2024 and are placed in service after calendar year 2022. The ITC is available for investments in a qualified storage facility, a qualified renewable energy and storage facility, or a qualified renewable energy facility, and the PTC is available for investments in a qualified renewable energy and storage facility or a qualified renewable energy facility. Prevailing wage and apprenticeship requirements apply to receive the full ITC and PTC value, and the credit value can be further increased if the project also qualifies for the domestic content bonus credit, the energy communities bonus credit, or the low-income bonus credit (only projects less than 5 megawatts alternating current are eligible for the low-income bonus). The IRA also includes a manufacturing production tax credit for specific renewable energy and battery storage related products and components manufactured in the U.S. To date, the IRA regulations and guidance issued by the U.S. Department of Treasury and Internal Revenue Service associated with these various tax credits, including but not limited to the ITC/PTC, ITC/PTC prevailing wage and apprenticeship requirements, bonus credits, and manufacturing production tax credit, have provided substantive clarity; however, there continues to be some uncertainty on certain aspects of the IRA and the related guidance as well uncertainty relating to potential future changes to the IRA. Such uncertainty has in the past caused certain customers to take an extended period to evaluate, negotiate, and enter into a energy storage project and may cause customers to do so in the future or may cause customers to delay projects as they navigate such uncertainty regarding the IRA and the related guidance as well as uncertainty relating to potential future changes to the IRA, which could have a material negative effect on our results of operations.
Current report
In addition, if we are unable to provide energy storage solutions that qualify our customers for the ITC/PTC domestic content bonus credit under the IRA on the timeline and in such quantities that we currently anticipate, then there may negative impact to our reputation, ability to compete in the market, demand from our customers, and our financial condition. Our competitors may be able to build a more robust domestic supply chain than Fluence and may be able to offer customers U.S. domestic content products in greater quantity and on a speedier timeline than we may be able to if our production of our battery components in the U.S. (e.g., modules, cells, enclosures, thermal management systems, and battery management systems) are delayed or hindered or otherwise negatively impacted. Such impacts would adversely impact our results of operations as well as our brand and ability to compete.
Current report
The full impact of the tax credits in the IRA, its accompanying guidance, and potential future changes in law that may apply to our business and operations cannot be known with certainty and we may not recognize the full extent of benefits we currently anticipate. We are continuing to evaluate the potential overall impact and applicability of these tax credits and any potential future changes in law on our business and operations. To the extent that any impacts from the IRA tax credits are less beneficial than currently anticipated, it may materially and adversely impact our business, financial condition, and results of operations. For example, there is ongoing discussion in Congress regarding potential changes to the manufacturing production tax credit under the IRA that would place restrictions on eligibility if the taxpayer taking the manufacturing production tax credit is a “foreign entity of concern” (“FEOC”), which may include Chinese and Russian domiciled entities. How a FEOC is defined and what exact restrictions may be required are unknown at this time. If FEOC restrictions relating to the manufacturing production tax credit become law, it may have negative consequences on certain of our U.S. suppliers, due to their respective ownership structure, and/or pricing, depending on the structure and applicability of the restrictions. As a result, the direct risks to our business from FEOC status are uncertain at this time, but any such designation of our suppliers or manufacturers as an FEOC in the future may impact our supplier or manufacturer base and cost structure for components used in our domestic content offerings, may impact eligibility for our offerings to qualify as domestic content under the IRA and qualify for certain tax credits, and may cause us to fail to recognize the currently anticipated benefits of our domestic content production, which would have a negative impact on our business and results of operations.
Current report
The international markets in which we operate or may operate in the future have or may in the future put in place policies to promote renewable energy, including energy storage. These incentives and mechanisms vary from country to country. In seeking to achieve growth internationally, we have and may make investments that, to some extent, rely on governmental incentives and support in a new market. We may not be able to optimize the benefits offered by these incentives or realize the growth that we expect from investments in the incentives, particularly in relation to competitors whose products might benefit disproportionately from these incentives. There is no assurance that these governments will continue to provide sufficient incentives and support to the energy storage industry and that the industry in any particular country will not suffer significant downturns in the future as the result of changes in public policies or government interest in renewable energy, any of which would adversely affect demand for our energy storage solutions and services.
Current report
Changes in the global trade environment, including the imposition of new tariffs, changes to existing tariffs, and related general economic uncertainty, has impacted our business and operations and may adversely affect the amount or timing of our revenues, results of operations, and cash flows in the future.
Current report
In early 2025, the United States imposed significant new tariffs on nearly all products and components imported into the United States (including certain materials and components used in our energy storage solutions) and could propose additional tariffs or increases to those already in place, including current high tariffs on imports from China. The exact scope of any such tariffs that will remain in place or ultimately be implemented is not known at this time, and the ultimate impacts on our business and operations is uncertain.
Current report
Prior to these most recently enacted tariffs, in May 2024, the Biden administration announced a significant shift in the tariff framework for the energy storage industry. Under this new structure, the Section 301 tariff rate on lithium-ion non-EV batteries imported from China will increase from the current 7.5% to 25%, effective January 1, 2026. This change specifically targeted "batteries" as defined by U.S. Customs and Border Protection, encompassing battery energy storage systems, modules, and certain types of cells, including those used in our energy storage solutions. Under the May 2024 structure announced by the Biden administration, the Section 301 tariff rate on battery "parts"–including separators, electrolytes, cans, and electrodes remains at its current 25% level.
Current report
As of the filing date of this Report, covered imports relevant to our energy storage systems will be subject to the 125% China-specific “reciprocal tariff”, plus the current China-specific 20% “fentanyl-related tariff”, plus the 3.4% base tariff on all countries, plus the applicable Section 301 tariff. We have exposure to these tariffs, as we currently import components, including battery cells from China, into the United States for customers and projects in the United
Current report
States. Retaliatory tariffs imposed by other countries and the uncertainties surrounding domestic and foreign tariffs could also adversely impact demand for our products. If we fail to manage these dynamics successfully or mitigate the impact of tariffs, our gross margins and results of operations could be adversely affected. Although we have taken steps to ramp up domestic production of key products and components of our energy storage solutions in the United States to try to mitigate our potential exposure, there is no guarantee we will be able to do so successfully. We have and we may in the future also face unanticipated costs and delays in developing our domestic supply chain, and there is no guarantee we will be able to scale domestic production to the degree both in volume and as quickly as would be required to avoid material adverse impacts to the business and our results of operations from changes in the trade environment.
Current report
The economic uncertainty created by the rapid recent changes in tariff policy in the United States has and may continue to adversely impact the energy storage market and customer contracting activity. For instance, in response to this tariff-related uncertainty, we have mutually agreed with certain customers to delay entry into new energy storage solutions contracts and to pause active, currently signed contracts that are under project execution. We may also experience cancellation of customers’ orders of our energy storage solutions in the future due to such tariff uncertainty. Customer contracting behavior in response to the tariff-related uncertainty may in turn adversely impact our results of operations in the future.
Current report
In addition, currently there are ongoing investigations into certain additional tariffs on specific imports and trade practices that may result in tariffs and/or more restrictive trade duties and restrictions on components for our energy storage solutions that we import into the U.S. from overseas, including, but not limited to, an anti-circumvention and countervailing tariff investigation proceeding before the U.S. International Trade Commission and U.S. Department of Commerce regarding imported graphite active anode material (AAM) utilized in our energy storage solutions. Due to the uncertainty relating to the outcome of these various investigations, we cannot predict the ultimate impact the outcome of these investigations and any resulting tariffs or other trade actions could have to our business, financial condition, and results of operations.
Current report
The impact of the new tariffs announced in April 2025 is currently not reflected in our results of operations as of March 31, 2025. These existing or future tariffs or trade policy and resulting economic conditions may materially increase costs of certain components and our inventory costs, may increase our prices and reduce demand for our solutions, has and may further negatively affect our customers, suppliers, and manufacturing partners and their own respective businesses and operations, has and may further require significant attention from our management, and may significantly harm our business, prospects, financial condition, and operating results if we are unable to manage these impacts effectively.
Reworded paragraphs (4)
Previous wording
There have been no material changes with respect to our risk factors previously disclosed in our 2024 Annual Report, other than as set forth below. You should carefully consider the risks described in Item 1A. "Risk Factors" of our 2024 Annual Report, and all of the other information included in this Report, before making an investment decision. Our business, financial condition, and results of operations could be materially and adversely affected by any of these risks or uncertainties.
Current wording
There have been no material changes with respect to our risk factors previously disclosed in our 2024 Annual Report and in our Quarterly Report on Form 10-Q for the fiscal period ended December 31, 2024 filed with the SEC on February 10, 2025 (the “First Quarter Report”), other than as set forth below. You should carefully consider the risks described in Item 1A. "Risk Factors" of our 2024 Annual Report, Item 1A. “Risk Factors” of our First Quarter Report, and the risk factors below along with our unaudited condensed consolidated financial statements and the related notes, as well as our other public filings with the SEC, before making an investment decision. Our business, financial condition, and results of operations could be materially and adversely affected by any of these risks or uncertainties.
Previous wording
As of December 31, 2024, we had approximately $400.0 million of indebtedness outstanding under the 2030 Convertible Senior Notes, and no cash borrowings outstanding under the 2024 Revolver (excluding$99.3 million letters of credit outstanding thereunder), with remaining availability of $400.7 million, net of letters of credit issued. All borrowings and obligations under the 2024 Revolver will be effectively senior to our obligations under the 2030 Convertible Senior Notes to the extent of the value of the assets securing such borrowings and obligations, and structurally senior to the 2030 Convertible Senior Notes as the 2030 Convertible Senior Notes are not guaranteed by Fluence Energy, LLC, a borrower under the 2024 Revolver.
Current wording
As of March 30, 2025, we had approximately $400.0 million of indebtedness outstanding under the 2030 Convertible Senior Notes, and no cash borrowings outstanding under the 2024 Revolver (excluding $67.5 million letters of credit outstanding thereunder), with remaining availability of $432.5 million, net of letters of credit issued. All borrowings and obligations under the 2024 Revolver will be effectively senior to our obligations under the 2030 Convertible Senior Notes to the extent of the value of the assets securing such borrowings and obligations, and structurally senior to the 2030 Convertible Senior Notes as the 2030 Convertible Senior Notes are not guaranteed by Fluence Energy, LLC, a borrower under the 2024 Revolver.
Previous wording
2030 Convertible Senior Notes, is significantly dependent on the generation of cash flow by our subsidiaries and their ability to make such cash available to us, by dividend, interest payment on debt they owe to us (including interest payments on the 2.25% Intercompany Subordinated Convertible Note issued by Fluence Energy, LLC to Fluence Energy, Inc., dated December 12, 2024 (the “Intercompany Convertible Note”)), debt repayment, or otherwise. None of our subsidiaries will guarantee the 2030 Convertible Senior Notes and our subsidiaries will not have any obligation to pay amounts due on the 2030 Convertible Senior Notes or to make funds available for that purpose. Noteholders are not entitled to rights under the Intercompany Convertible Note. Fluence Energy, LLC’s failure to make interest payments thereunder will not itself constitute a default or event of default under the indenture governing the 2030 Convertible Senior Notes. We have pledged our interest in the Intercompany Convertible Note to secure our obligations under the 2024 Revolver, and the Intercompany Convertible Note is subordinated in right of payment to Fluence Energy, LLC’s obligations under the 2024 Revolver and its other indebtedness. Our subsidiaries may not be able to, or may not be permitted to, make distributions to enable us to make payments in respect of our indebtedness, including the 2030 Convertible Senior Notes. Each subsidiary is a distinct legal entity, and, under certain circumstances, legal and contractual restrictions may limit our ability to obtain cash from our subsidiaries. While the agreement governing our 2024 Revolver limits the ability of certain of our subsidiaries to incur consensual restrictions on their ability to pay dividends or make other intercompany payments to us, these limitations are subject to qualifications and exceptions. Additionally, the agreement governing our 2024 Revolver limits the ability of Fluence Energy, LLC to pay dividends or make other distributions to us, and substantially limits our ability to prepay or repay the principal amount of the 2030 Convertible Senior Notes with cash, upon conversion, maturity or otherwise. Furthermore, other holders of LLC Interests are entitled to participate pro rata with Fluence Energy, Inc. in dividends from Fluence Energy, LLC. In the event that we do not receive distributions from our subsidiaries, we may be unable to make required principal and interest payments on our indebtedness, including the 2030 Convertible Senior Notes.
Current wording
We conduct all of our operations through our subsidiaries, including Fluence Energy, LLC; Fluence Energy, Inc. is a holding company. Accordingly, payment of interest or repayment of principal on our indebtedness, including the 2030 Convertible Senior Notes, is significantly dependent on the generation of cash flow by our subsidiaries and their ability to make such cash available to us, by dividend, interest payment on debt they owe to us (including interest payments on the 2.25% Intercompany Subordinated Convertible Note issued by Fluence Energy, LLC to Fluence Energy, Inc., dated December 12, 2024 (the “Intercompany Convertible Note”)), debt repayment, or otherwise. None of our subsidiaries will guarantee the 2030 Convertible Senior Notes and our subsidiaries will not have any obligation to pay amounts due on the 2030 Convertible Senior Notes or to make funds available for that purpose. Noteholders are not entitled to rights under the Intercompany Convertible Note. Fluence Energy, LLC’s failure to make interest payments thereunder will not itself constitute a default or event of default under the indenture governing the 2030 Convertible Senior Notes. We have pledged our interest in the Intercompany Convertible Note to secure our obligations under the 2024 Revolver, and the Intercompany Convertible Note is subordinated in right of payment to Fluence Energy, LLC’s obligations under the 2024 Revolver and its other indebtedness. Our subsidiaries may not be able to, or may not be permitted to, make distributions to enable us to make payments in respect of our indebtedness, including the 2030 Convertible Senior Notes. Each subsidiary is a distinct legal entity, and, under certain circumstances, legal and contractual restrictions may limit our ability to obtain cash from our subsidiaries. While the agreement governing our 2024 Revolver limits the ability of certain of our subsidiaries to incur restrictions on their ability to pay dividends or make other intercompany payments to us, these limitations are subject to qualifications and exceptions. Additionally, the agreement governing our 2024 Revolver limits the ability of Fluence Energy, LLC to pay dividends or make other distributions to us, and substantially limits our ability to prepay or repay the principal amount of the 2030 Convertible Senior Notes with cash, upon conversion, maturity or otherwise. Furthermore, other holders of LLC Interests are entitled to participate pro rata with Fluence Energy, Inc. in dividends from Fluence Energy, LLC. In the event that we do not receive distributions from our subsidiaries, we may be unable to make required principal and interest payments on our indebtedness, including the 2030 Convertible Senior Notes.
Previous wording
Furthermore, if any of the conditions to the convertibility of the 2030 Convertible Senior Notes is satisfied, then we may be required under applicable accounting standards to reclassify the liability carrying value of the 2030 Convertible Senior Notes as a current, rather than a long-term liability. This reclassification could be required even if no noteholders convert their 2030 Convertible Senior Notes and could materially reduce our reported working capital.
Current wording
Furthermore, if any of the conditions to the convertibility of the 2030 Convertible Senior Notes is satisfied, then we may be required under applicable accounting standards to reclassify the liability carrying value of the 2030
Rearranged current paragraphs (1)
Current report — wording carried from elsewhere
Convertible Senior Notes as a current, rather than a long-term liability. This reclassification could be required even if no noteholders convert their 2030 Convertible Senior Notes and could materially reduce our reported working capital.
Rearranged previous paragraphs (1)
Previous report — wording carried elsewhere
We conduct all of our operations through our subsidiaries, including Fluence Energy, LLC; Fluence Energy, Inc. is a holding company. Accordingly, payment of interest or repayment of principal on our indebtedness, including the