Packet Digital Awarded $9.8 million U.S. Navy Contract to Scale Battery Cell Production

FARGO, N.D. (May 5, 2026) — Packet Digital, and its subsidiary Badland Batteries, a U.S.-based leader in advanced lithium-ion battery technology for drones, unmanned aerial systems (UAS) and other defense applications, announced today that it has been awarded $9.8 million as it moves to Phase 3 of its U.S. Navy contract under the Logistics UAS Family of Advanced Batteries program. This latest phase marks a significant milestone as the company transitions from factory design and construction to equipment commissioning, large-scale cell production and volume manufacturing.

This milestone follows the successful completion of Phase 2, which focused on cell manufacturing plant design, equipment selection, installation and facility construction. With the Badland Batteries factory now built, and commissioning underway, Phase 3 will focus on scaling production volumes, validating large-scale material supply chains, installing and qualifying production equipment, and ramping manufacturing throughput to meet Navy requirements.

“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.”

“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.”

The Badland battery cell manufacturing facility is designed to support multiple high-performance lithium-ion chemistries, ensuring flexibility to meet evolving Navy mission requirements. The cell plant also represents a significant investment in American manufacturing, workforce development and long-term defense readiness by strengthening the domestic defense supply chain with U.S.-made, NDAA-compliant battery cells.

“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.