The former General Motors executive is leading the defense industry’s electric vehicle battery startup pivot

An Arizona-based battery startup led by a former company GM The CEO is transitioning from manufacturing products for fully electric vehicles to manufacturing products for the aerospace and defense industries amid the war in Iran and increased demand for US drones by the Trump administration.

Sion Power expects to commercialize high-powered lithium metal battery cells for drones and other defense-related products later this year after focusing on developing fully electric vehicles for much of the past decade, according to CEO Pamela Fletcher.

“We aim to commercialize this technology,” Fletcher told CNBC exclusively. “We had hoped and believed that would be in the automotive space, and I think that possibility is still there, but the faster path, and frankly, a huge need, is in that defense space.”

This decision is a unique example of how companies betting on the unrealized adoption of fully electric vehicles are shifting to different sectors. Other companies have moved into the stationary storage and space sectors to take advantage of unused battery production capacity for electric vehicles.

U.S. automakers have largely pulled back from pure electric vehicles and taken billions of dollars in writedowns following slower-than-expected adoption of the vehicles and changes the Trump administration made to the incentives that support them.

Sion Power’s planned “Licerion HE” lithium metal battery cells will support both primary, single-discharge, and secondary, or 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 power in the smallest and lightest possible space, according to Fletcher.

“The lithium metal technology we developed has high gravitational energy, which means it packs a lot of energy into a lightweight package,” said Fletcher, who begins leading the company in 2024. “It works really well with things that fly.”

Sion Power’s lithium metal cells are designed to deliver a power density exceeding 500 Wh/kg, compared to about 300-350 Wh/kg for today’s most advanced lithium-ion technology, Fletcher said.

These batteries can power drones or missiles as well as onboard 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 currently produces Licerion HE cells for defense applications and is shifting its production cell line from automotive battery cells to smaller-scale defense products.

Fletcher said the company will continue to develop cells for other sectors, such as electric vehicles, but its main focus and growth now is defense, which is what the company was working on before focusing on electric vehicles.

The opportunity in defense is similar to the continuing increase in demand for energy storage from data centers across the United States, said Fletcher, a former electric vehicle business and growth executive who left GM in 2022.

Fletcher said the private company does not plan to be a direct supplier to the US government, but hopes to sell its products to other certified contractors. The move comes as the Trump administration’s Department of Defense explores ramping up production of low-cost, unmanned U.S. sourced drones, or LUCAS.

Such drones have been an integral part of the war between Russia and Ukraine as well as the war with Iran.

“It has evolved very quickly in the last three or four years, and now, even with the Iran war, things are changing even more,” Mitch Hortin, Scion Power’s chief commercial officer, told CNBC. “There are a lot of applications emerging, unfortunately, from the Ukraine war, and now from the Iran war.”

Several companies other than Sion Power, e.g The quantum landscapeyears of research and development of lithium metal batteries for cars, but until now there has been no large-scale commercialization of the use of this technology in the automotive sector.

Lithium-metal battery cells operate similarly to the lithium-ion cells currently in use, but have greater energy density, and possibly at a lower cost. But they could be more volatile and are seen as being further along than emerging solid-state batteries for cars, according to experts.

Sam Abu Al-Samid, vice president of market research at communications and consulting firm Telemetry, said that lithium metal cells can be used in different industries and use cases.

“It’s better for energy density,” said Abu Al-Samad, an engineer and battery expert. “It should also reduce cost.” “There’s no reason why it can’t be equally effective on small objects, especially objects that fly, like a drone.”

The biggest difference between defense and automotive is shelf life versus life cycle. Automotive batteries typically require hundreds of charge life cycles, while defense uses require only one to 20 cycles and can require a shelf life of three to eight years.

Sion Power has raised more than $200 million to develop lithium metal cells. Investors include the former South Korean battery maker LG Energy Solution Google The family office of CEO Eric Schmidt, Hillspur, and unnamed global automakers, according to the company.

The company, which was founded in 1989 as a branch of Brookhaven National Laboratory, said it plans to obtain more capital as it is expected to launch its products and increase its size during the second half of 2026 and until 2027.