Defense: A High-Value Market for Next-Gen Batteries
The race to secure critical minerals supply chains is increasingly moving beyond electric vehicles (EVs) and grid storage, with defense emerging as a smaller but potentially lucrative market for advanced battery tech.
That was a key takeaway from an SC Insights webinar examining critical minerals, battery supply chains and the growing use of batteries across defense applications. Speakers Andy Leyland and Jose Hofer explained that while defense alone is unlikely to justify the construction of massive battery or mineral-processing facilities, sector demand could accelerate commercialization of higher-performance technologies such as solid-state and lithium sulfur batteries.
The distinction is important.
Defense represents a relatively small market compared to transportation and energy storage, but it can place a much higher value on energy density, weight, reliability and performance.
“The defense industry itself is typically pretty small compared to the total industrial base,” Leyland said, noting that the key to resilience is maintaining an industrial base that can be rapidly expanded when required.
Defense demand small, but growing
SC Insights groups defense, drones, robotics, aviation and personal mobility within the broader “high tech” battery industry. Hofer said the segment could see annual growth of around 20 percent over the next five years, with the possibility that actual growth could rise as high as 30 or 40 percent.
While the sector currently represents only a fraction of global battery demand, Hofer expects high-tech applications to become increasingly significant over the next decade.
That growth is being driven in part by lessons from recent conflicts, particularly the war in Ukraine, where drones have become an increasingly important military capability.
The scale of drone deployment illustrates the potential.
Ukraine is targeting production of between 5 million and 7 million drones this year, according to Leyland, compared with US production measured in the tens of thousands per month.
The comparison also highlights a broader issue facing western defense supply chains: the ability to move rapidly from peacetime production to wartime scale.
“Being able to go from one to the other comes down to having a strong industrial base,” Leyland said.
That industrial depth extends well beyond defense contractors. Batteries, critical minerals, processing capacity, equipment, skilled labor and financing all need to be available before a crisis emerges.
The battery technology gap
For many current defense applications, cutting-edge battery chemistry is not yet necessary.
Leyland noted that batteries deployed in the Russia-Ukraine conflict have largely been conventional lithium iron phosphate (LFP) or nickel-manganese-cobalt (NCM) cells readily available from commercial markets.
That could change as military platforms…
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