New investment supports U.S. efforts to scale domestic drone manufacturing and strengthen critical energy supply chains
The United States is racing to produce more U.S.-manufactured drones and reduce its reliance on foreign suppliers. A major part of that effort is securing the energy systems that power unmanned platforms. Packet Digital’s new win marks a strong step toward that goal.
Packet Digital announced that it has been awarded up to $50 million through the Department of Defense’s Accelerate the Procurement and Fielding of Innovative Technologies (APFIT) program. The funding will support the development and production of advanced lithium-ion battery cells for unmanned aerial systems (UAS), including platforms used by the U.S. Navy, Army, Air Force, and Special Operations Command.
This investment comes as the U.S. works to build a secure, reliable domestic supply chain for battery cells — technology that is essential for any scaled drone manufacturing effort.
Closing a Critical Energy Supply Gap
The U.S. defense ecosystem does not yet have a stable domestic source for high-energy lithium-ion cells. That gap limits the nation’s ability to scale drone production and weakens long-term supply chain security. Packet Digital’s APFIT award aims to change that.
Production is planned to begin in 2026 at the company’s Badland Batteries facility in Fargo, North Dakota. The move will give the defense industry a U.S.-made option for high-performance cells with “unmatched energy density and power performance.”
Terri Zimmerman, CEO of Packet Digital, said the company’s technology is designed to meet mission needs across domains.
“Our advanced high-power, high-energy density lithium-ion cell technology is a mission-critical enabler for extended-range UAS operations, space-based platforms, and submersible assets,” she said. “This capability directly enhances warfighter readiness by improving endurance, agility and energy resilience in contested environments.”
She also noted the scale of the challenge facing today’s defense supply chain.
“The U.S. currently lacks the manufacturing base for high-energy battery cells at the scale required for defense platforms,” Zimmerman added. “We are working every day to close that gap and ensure our warfighters have the tools they need.”
Supporting the Push for U.S.-Made Drones
The APFIT award also aligns with the Department of Defense’s broader push to accelerate domestic production of critical drone components. Over the last two years, federal agencies and Congress have increased support for U.S. manufacturers building flight-critical systems, airframes, sensors, and now batteries.
Energy storage is one of the most urgent bottlenecks. Drones cannot scale to meet defense demand without reliable access to high-performance batteries that meet military requirements for safety, endurance, and power output. A domestic source also helps reduce dependence on foreign suppliers and shortens logistics chains.
Strengthening this part of the supply chain supports U.S. efforts to compete globally as drone production ramps up.
Building Toward Full-Scale Production
Packet Digital’s expansion is expected to deliver a secure source of advanced energy storage for defense platforms. The company says the APFIT award “underscores a shared commitment to equipping America’s warfighters with the most reliable energy storage technology available.”
A stronger battery supply chain supports drone programs across the services and helps maintain the operational edge the U.S. seeks as innovation accelerates worldwide.
Packet Digital, founded in 2003, develops batteries, chargers, battery management systems, and power management tools used in aerospace, defense, and telecommunications. The company is headquartered in Fargo, North Dakota.
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Miriam McNabb is the Editor-in-Chief of DRONELIFE and CEO of JobForDrones, a professional drone services marketplace, and a fascinated observer of the emerging drone industry and the regulatory environment for drones. Miriam has penned over 3,000 articles focused on the commercial drone space and is an international speaker and recognized figure in the industry. Miriam has a degree from the University of Chicago and over 20 years of experience in high tech sales and marketing for new technologies.
For drone industry consulting or writing, Email Miriam.
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