Military contracts could fund high-density batteries at premium prices, benefiting drone manufacturers over automakers.
An energy analyst suggests the Pentagon’s willingness to pay for triple-density batteries could solve funding challenges that electric vehicles have not. Defense budgets prioritize performance over cost, unlike automakers, creating a potential market for advanced battery technology.
AeroVironment (AVAV) holds a $1.1B funded backlog, while Ondas (ONDS) reported a 1,080% quarterly revenue increase. Both ride a proposed $54B FY2027 autonomous systems budget. Red Cat (RCAT), a smaller player, may also gain if battery density improves.
The thesis contrasts with EV markets, where cost constraints limit battery innovation. Military applications could accelerate breakthroughs, benefiting drone manufacturers first.