US battery startups pivot to defense sector with $500 million in government funding
The U.S. Department of Energy has announced $500 million in funding for the domestic battery industry, with a significant portion directed to startups supplying the defense sector.
U.S. battery startups are increasingly turning to the defense sector for new opportunities and funding, as the nation aims to bolster its domestic supply chains. The Department of Energy recently announced a $500 million initiative to strengthen the U.S. battery industry's capabilities, seeking to reduce reliance on foreign suppliers and enhance national security.
A substantial amount of this funding is earmarked for companies developing batteries for defense applications, including drones, torpedoes, and infantry radios. Coreshell, a battery materials startup, received $50 million to expand its production of metallurgical silicon anode material, with a spokesperson noting the growing relevance of lithium-ion batteries in defense. The company has also secured investment from ADS Ventures, a defense supplier.
Other companies have also secured significant grants. Lilac Solutions received $100 million to build a lithium processing plant in Utah, aiming for large-scale production of lithium carbonate. Nth Cycle was awarded $100 million to construct a facility for extracting valuable materials from recycled lithium-ion batteries. Megan O’Connor, co-founder and CEO of Nth Cycle, highlighted demand from both the defense and automotive sectors.
While the electric vehicle industry has faced setbacks, the defense sector presents a consistent demand for advanced battery technology. The U.S. Defense Logistics Agency's annual battery procurement was already valued at $200 million in 2021. The new $500 million funding package underscores the government's strategy to prioritize domestic production and secure critical energy resources.