Packet Digital awarded $27 million Phase III SBIR contract to bolster domestic battery manufacturing

FARGO, N.D. (April 8, 2026) — Packet Digital, the parent company of Badland Batteries, announced that it has been awarded a $27 million contract by the Naval Air Warfare Center Aircraft Division to scale domestic manufacturing of battery cells. This Small Business Innovation Research (SBIR) Phase III award marks a significant milestone in securing the United States’ supply chain for battery cells and packs tailored for UAS and drones.

The contract is a direct result of successful Phase I and II efforts. This program supplies procurement funds to transition fully developed, innovative products into active service. The award will accelerate the delivery of Packet Digital’s advanced, high-performance batteries for UAS, supporting the U.S. Navy, Army, Air Force, and Special Operations Command.

“This procurement award represents more than a contract — it’s the culmination of more than a decade of building the right capabilities at Packet Digital and Badland Batteries,” said Terri Zimmerman, CEO of Packet Digital. “The need for high‑performance, U.S.-manufactured UAS battery cells has never been clearer, and the investments we made years ago position us to meet that demand at scale.”

As global demand for advanced lithium-ion technology grows, this contract ensures the U.S. military maintains a competitive edge through reliable, domestically produced power sources, directly addressing a critical gap in the defense ecosystem’s supply chain for air, space, and underwater operations. To secure this technical superiority the Badland Batteries manufacturing facility in Fargo will begin production of U.S.-made battery cells in 2026. With the new Badland battery cell plant, Packet Digital will be the only one-stop-shop for battery manufacturing, including raw material procurement, design, testing, battery cell and PCB manufacturing, battery pack assembly, and warehousing and shipping.