U.S. Navy Awards Packet Digital $9.8 Million to Scale Drone Battery Production in North Dakota

North Dakota facility will manufacture NDAA-compliant battery cells for drones and defense systems

Packet Digital and its subsidiary Badland Batteries announced that the company has received $9.8 million as part of Phase 3 of a U.S. Navy contract focused on advanced batteries for logistics drones and unmanned systems.

The funding comes through the Navy’s Logistics UAS Family of Advanced Batteries program. The latest phase supports the transition from factory construction to large-scale battery cell production at the company’s manufacturing facility in Fargo, North Dakota.

The announcement highlights another step in the effort to expand domestic battery manufacturing for defense and unmanned systems applications. Battery supply chains have become a growing focus for the U.S. government as agencies seek to reduce reliance on foreign-made components and materials.

According to the company, the Badland Batteries plant will manufacture lithium-ion battery cells designed for drones, unmanned aerial systems, and other defense applications.

“Completing our factory build and moving into production ramp-up is a critical inflection point for our company, but more importantly for domestic battery manufacturing for national defense,” said Terri Zimmerman, CEO of Packet Digital. “Phase 3 is where years of planning, engineering and investment turn into high-rate production capability for the U.S. Navy, national defense and commercial markets.”

Focus on Domestic Supply Chains

The company said Phase 2 of the program included factory design, equipment selection, installation, and facility construction. With the facility now built, Phase 3 will focus on scaling production, validating supply chains, qualifying manufacturing equipment, and increasing production throughput.

The Badland Batteries facility is designed to support multiple lithium-ion chemistries. The company said this approach allows the plant to adapt to changing Navy mission requirements.

The announcement also reflects broader federal efforts to strengthen domestic manufacturing capacity for critical drone and defense technologies. U.S. policymakers and industry leaders have increasingly focused on NDAA-compliant supply chains for batteries, electronics, and drone components.

U.S. Senator John Hoeven said the project supports both national security and manufacturing jobs in the state.

“Packet Digital is playing a key role in strengthening our Navy’s unmanned systems capabilities with advanced, domestically produced battery technology,” said U.S. Sen. John Hoeven. “We worked to secure continued funding under this contract because it keeps that work moving forward in North Dakota, supports good-paying manufacturing jobs and helps ensure a secure supply chain while reducing our reliance on materials from adversaries.”

Battery Manufacturing for Defense and Commercial Markets

Battery performance remains a key factor for many drone applications. Military and commercial operators continue to seek longer flight times, faster charging, and more reliable power systems for aircraft operating in difficult environments.

The company said the Fargo facility represents a long-term investment in American manufacturing and workforce development. It also aims to provide a domestic source for battery cells used in defense systems.

“By scaling cell production in North Dakota, we are building durable industrial capability that the Navy can rely on today and expand on in the future,” Zimmerman said.

Founded in 2003, Packet Digital develops batteries, chargers, battery management systems, and related power technologies for aerospace, defense, and telecommunications customers.

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