Battery startups defense is becoming a critical narrative in the US energy sector. After the One Big Beautiful Bill eliminated EV incentives, US battery startups found a lifeline in the defense world, powering drones, torpedoes, infantry radios, and fighter jets.
The Trump administration, despite its open disdain for EVs, acknowledges that batteries are inescapable. In Washington, national security now justifies many decisions—creating a vital opening for battery startups defense applications.
DOE Grants Bolster Battery Startups Defense Efforts
The Department of Energy announced Thursday it is awarding $500 million in grants to strengthen the US battery supply chain. The program aims to “reduce reliance on foreign sources, bolster national security, and advance American energy dominance.” Most of the funding went to startups.
This investment directly supports battery startups defense priorities. The grants help companies scale manufacturing, secure domestic materials, and reduce dependence on foreign supply chains—all while meeting military requirements.
Key Recipients of Defense-Focused Funding
Coreshell
Battery startups defense applications are “absolutely playing out in discussions,” a Coreshell spokesperson told TechCrunch. The materials startup received a $50 million DOE award to expand manufacturing for its metallurgical silicon anode material. Coreshell recently brought on ADS Ventures as an investor; its parent company, ADS, is a defense supplier working with autonomous systems.
Lilac Solutions
Lilac Solutions, which extracts lithium from brines, landed $100 million to build a processing facility on Utah’s Great Salt Lake. The plant will produce 5,000 metric tons of lithium carbonate annually by 2028—a key precursor for battery production. This directly supports battery startups defense supply chain needs.
Nth Cycle
Nth Cycle received $100 million to build a facility refining black mass from recycled lithium-ion batteries. The plant will produce lithium and nickel compounds for new batteries. “We’re seeing clear demand drivers from the defense sector,” Megan O’Connor, co-founder and CEO, told TechCrunch.
Why Battery Startups Defense Matters Now
Even in 2021, the U.S. Defense Logistics Agency was buying $200 million worth of batteries annually**. While dwarfed by the automotive industry’s expected **$18 billion in US battery manufacturing spending this year (according to Mordor Intelligence), defense demand provides stability.
The dynamic is unlikely to change. Though EVs face setbacks, automakers still roll out new models. Battery startups defense partnerships ensure consistent revenue while automotive markets recover.
The Strategic Pivot
A few years ago, batteries could have come from domestic factories built after the Inflation Reduction Act. But after the One Big Beautiful Bill gutted battery production incentives, the Pentagon needed alternatives. These new DOE grants may acknowledge that efforts to kill the American EV industry went too far.
Battery startups defense collaborations are filling that gap. Soldiers and drones still need lightweight, capable batteries from US sources. This defense lifeline helps battery startups defense companies survive and innovate while the broader market recalibrates.
The future is electric, but the timing is unsettled. For now, battery startups defense partnerships provide a pragmatic path forward—building a resilient, American-based supply chain that serves both national security and commercial needs.
