In this articleQSFollow your favorite stocksCREATE FREE ACCOUNTLow-cost Unmanned Combat Attack System (LUCAS) drones are positioned on the tarmac at a base in the U.S. Central Command operating area.Source: U.S. CENTCOMAn Arizona-based battery startup led by a former General Motors executive is pivoting from making products for all-electric vehicles to ones for the aerospace and defense industries amid the war in Iran and growing demand for U.S. drones by the Trump administration.Sion Power expects to commercialize high-energy lithium-metal battery cells for drones and other defense-related products later this year after focusing on the development of all-electric vehicles for much of the past decade, according to CEO Pamela Fletcher. “We’re targeting to commercialize this technology,” Fletcher told CNBC exclusively. “We had hoped, and thought, that would be in automotive, and I think that possibility still exists, but the faster path, and frankly, a big need, is out there is in this defense space.”The decision is a unique example of how companies that bet on the unrealized adoption of all-electric vehicles are pivoting to different segments. Other companies have moved to the stationary storage and aerospace sectors to utilize unused battery production capacity for EVs. It also comes as automakers in the U.S. have significantly pulled back from pure EVs and taken billions of dollars in write-downs following slower-than-expected adoption of the vehicles and changes by the Trump administration to incentives that supported them.Sion Power’s planned “Licerion HE” lithium-metal battery cells will support both primary (single-discharge) and secondary (rechargeable) battery applications, according to the company.The battery cells are designed for next-generation drones, autonomous systems and other mission-critical platforms that require maximum energy in the smallest, lightest possible footprint, according to Fletcher.”Lithium-metal technology, which is what we developed, has high gravimetric energy, which means it’s a lot of energy in a lightweight pack,” said Fletcher, who began leading the company in 2024. “It works really well for things that fly.”Fletcher said Sion Power’s lithium-metal cells are engineered to deliver energy densities exceeding 500 watt-hour per kilogram, compared with approximately 300–350 Wh/kg for today’s most advanced lithium-ion technology.Such batteries can power drones or missiles as well as their on-board systems such as cameras, sensors and processors for combat, surveillance and other needs. Sion Power has a 110,000-square-foot facility in Tucson, Arizona, with pilot manufacturing capabilities. Fletcher said it’s currently producing Licerion HE cells for defense applications and converting its production cell line from automotive battery cells to defense products, which are smaller in size.Pamela Fletcher, General MotorsMario Anzuoni | ReutersThe company will continue to develop cells for other segments, such as EVs, but its main focus and growth right now is defense, which the company had been working on prior to focusing on EVs, Fletcher said. Fletcher, a former EV and growth business executive who left GM in 2022, said the opportunity in defense is comparable to the ongoing surge in demand for energy storage from data centers across the U.S.The privately held company does not plan to be a direct supplier to the U.S. government, but it hopes to sell its products to other certified contractors, Fletcher said. The move comes as the Trump administration’s Department of Defense is exploring increasing production of U.S.-sourced Low‑Cost Uncrewed Combat Aerial System, or LUCAS, drones.Such drones have been an integral part in the war between Russia and Ukraine as well as the war in Iran.”It’s evolved quite rapidly in the last three or four years, and now, even with the Iran war, things are changing even further,” Sion Power Chief Commercial Officer Mitch Hourtienne told CNBC. “There’s a lot of emerging applications coming out of, unfortunately, the Ukraine war, now the Iran war …
