Where do small nuclear reactors really stand: from investor euphoria to real production obstacles

The nuclear energy sector is experiencing a moment of revival. In just a few weeks of 2025, small nuclear reactors attracted $1.1 billion in capital, driven by investors’ belief that scaled-down solutions can solve problems that have troubled the industry for years. But there is a gap between ambitions and production reality.

Traditional scale vs. new approach

Vogtle 3 and 4 in Georgia are symbols of both industry ambition and industry struggles. Each reactor is a massive structure containing tens of thousands of tons of concrete, fueled by 14-foot-high columns, generating over 1 gigawatt of energy. However, their construction has turned into a nightmare: eight years of delays and a budget overrun of more than $20 billion.

A new generation of nuclear companies sees this very differently. The theory is elegant: if you reduce the reactor size, you also reduce costs and construction times. Need more power? Add another module. This modular approach is meant to be — it allows for mass production techniques, and with each new unit, costs should decrease thanks to the learning curve.

The problem no one wants to admit

Economic theories fall flat against the wall of production reality. Milo Werner, general partner at DCVC and formerly responsible for deploying new products at Tesla, is clear: “I know people in the nuclear supply chain who can list 5 to 10 materials that we simply do not produce in the United States. We’ve forgotten how to make them.”

This is not an exaggeration. For four decades, the American industry has moved production overseas. As a result — a country with advanced technology cannot produce parts for its own reactors.

Capital versus skills — is priority love?

Every manufacturer faces two obstacles: capital and human resources. The nuclear sector’s capital situation looks good — Werner admits: “They currently have an excess of cash.” But talent? That’s a completely different problem.

The US has not built significant industrial facilities in four decades. Today, there is a shortage of production managers, process engineers, supply chain specialists — entire teams familiar with the industry. As Werner put it: “It’s like sitting on the couch for 10 years and then wanting to run a marathon the next day. It doesn’t work.”

It’s not just about operators. A whole layer is needed: plant directors, financial managers, board members. That’s missing.

Where is the future of production?

Werner observes a positive trend: many startups — not only from the energy sector — are beginning small-scale production close to their technical teams. This makes manufacturing geographically closer to innovation.

The key is modularity. Companies should start with small volumes, gather data from each iteration, and gradually scale. In an ideal scenario, data shows progress, reassuring investors. But Werner warns: the benefits of economies of scale do not come quickly. Sometimes it takes years, sometimes decades, before the actual cost reductions become visible.

So where do small nuclear reactors stand? Somewhere between financial optimism and the real challenge of rebuilding manufacturing skills that the US has lost over time.