Nuclear Renaissance: Can small Modular Reactors Overcome Manufacturing Hurdles?
The nuclear industry is experiencing a remarkable resurgence. After decades of stagnation, fueled by cost overruns and safety concerns, a new wave of innovation and investment is breathing life into the sector. in the final weeks of 2025 alone,nuclear startups secured $1.1 billion in funding [1], driven by growing investor confidence in the potential of smaller, more efficient nuclear reactors.This optimism comes as the world grapples with the urgent need for clean, reliable energy sources to combat climate change.
The Challenge with Traditional Nuclear Power
Traditional nuclear power plants are behemoths of engineering. Facilities like Vogtle 3 and 4 in Georgia, the newest reactors built in the U.S., are massive undertakings, requiring tens of thousands of tons of concrete, 14-foot-tall fuel assemblies, and generating over 1 gigawatt of electricity. However, these projects have been plagued by delays – eight years behind schedule – and ballooning costs, exceeding $20 billion [1]. These issues have cast a long shadow over the industry, hindering its ability to compete with other energy sources.
Small Modular Reactors: A New Approach
The new generation of nuclear startups is betting on a different approach: Small Modular Reactors (SMRs). The core idea is simple – shrink the reactor. SMRs are designed to be significantly smaller than traditional reactors, typically generating less than 300 megawatts of electricity. This smaller size offers several potential advantages. Instead of building one massive plant, utilities could deploy multiple SMRs to meet their energy needs, offering greater flexibility and scalability. Crucially, smrs are intended to be manufactured in factories and then shipped to the deployment site, leveraging mass production techniques to drive down costs.
The promise of mass manufacturing is central to the SMR concept. By standardizing designs and producing components at scale, companies hope to achieve economies of scale, reduce construction times, and lower overall project costs. However, the extent of these cost savings remains a subject of ongoing research [1]. Startups are banking on the assumption that these savings will be significant enough to make SMRs economically viable.
Manufacturing Realities: Lessons from Tesla and Beyond
While the concept of mass manufacturing is appealing, it’s far from straightforward. The experience of Tesla, a pioneer in automotive manufacturing, serves as a cautionary tale. Despite being in a well-established industry with a robust domestic supply chain, Tesla struggled for years to ramp up production of the Model 3 profitably. U.S. nuclear startups face an even steeper challenge. The U.S. has significantly eroded its nuclear manufacturing capabilities over the past several decades.
“I have a number of friends who work in supply chain for nuclear, and they can rattle off like five to ten materials that we just don’t make in the United States,” explains Milo Werner, general partner at DCVC, a venture capital firm investing in deep tech [1]. “We have to buy them overseas. We’ve forgotten how to make them.” This reliance on foreign suppliers introduces vulnerabilities into the supply chain and increases costs.
Werner, who previously held leadership roles in manufacturing at Tesla and Fitbit, emphasizes that accomplished manufacturing requires more than just capital. “When companies of any size want to manufacture something, they face two main challenges,” she says. “One is capital, which is frequently enough the biggest constraint as factories aren’t cheap. Fortunately for the nuclear industry,that shouldn’t pose much of a problem. They’re awash in capital right now.” However,the other,often overlooked,challenge is a shortage of skilled labor and experienced manufacturing expertise.
The Human Capital Gap
The U.S. has experienced a decline in industrial facilities construction over the past 40 years, leading to a loss of “muscle memory” in manufacturing. “We haven’t really built any industrial facilities in 40 years in the United states,” Werner observes. “As an inevitable result, we’ve lost the muscle memory. It’s like we’ve been sitting on the couch watching TV for 10 years and then getting up and trying to run a marathon the next day. It’s not good.”
This skills gap extends across all levels of the manufacturing organization, from machine operators and floor supervisors to CFOs and board members. The lack of experienced personnel poses a important obstacle to scaling up SMR production. However, Werner notes a positive trend: startups are increasingly building early-stage manufacturing facilities close to their technical teams. “that is pulling manufacturing in closer to the United States because it allows them to have that cycle of betterment.”
Modularity and Scaling for Success
To mitigate the manufacturing challenges, startups are embracing a modular approach. By designing SMRs with standardized, interchangeable components, they can start producing small volumes early on, gather data on the manufacturing process, and refine their techniques. “Really leaning into modularity is very important for investors,” Werner says. This iterative approach allows companies to demonstrate progress and build confidence with investors.
However,it’s crucial to recognize that the benefits of mass manufacturing don’t materialize overnight. Companies often overestimate the speed at which they can achieve cost reductions through learning and process improvements. “Often it takes years, like a decade, to get there,” Werner cautions.
The DOE’s Push for Accelerated Deployment
Recognizing the potential of SMRs, the Department of Energy (DOE) is actively supporting their development and deployment. In 2026,the DOE selected 10 companies to fast-track SMR development,with a goal of achieving criticality – the point at which a nuclear reactor sustains a chain reaction – by July 4,2026 [3]. The DOE will provide regulatory support and expedite licensing processes, while the selected startups will bear all costs. This initiative aims to dramatically reduce the time and cost associated with building new nuclear power plants [2].
Looking Ahead: A Cautiously Optimistic outlook
The resurgence of the nuclear industry, driven by the promise of SMRs, is a welcome development in the fight against climate change. However, realizing this potential will require overcoming significant manufacturing and supply chain challenges. The success of SMRs hinges on the ability of startups to secure funding, rebuild domestic manufacturing capabilities, and attract a skilled workforce. While the path forward is not without obstacles, the current level of investment and government support suggests that a new era of nuclear power may be on the horizon.