A global defense revolution is underway based on swarms of autonomous, unmanned, AI- and battery-powered drone systems. Last month President Donald Trump signed the “Unleashing American Drone Dominance” executive order, and on July 10, Defense Secretary Pete Hegseth began to operationalize efforts to bolster domestic drone technology and manufacturing.
Unfortunately for the U.S. and the West, this entire revolution rests on a single point of failure: Nearly every autonomous system being deployed today is powered by batteries dependent on Chinese-controlled supply chains. If America cannot source and manufacture the batteries that power its drones and autonomous systems, its defense superiority is at risk.
The Ukraine conflict provides a real-time demonstration of warfare’s new reality. Ukrainian forces have used small, inexpensive drones to destroy Russian strategic bombers worth tens of millions of dollars. Ukraine has become an innovation lab for developing and producing Western drones, yet nearly all of them are powered by batteries dependent on China.
The Pentagon has gotten the memo. The Army is undergoing its largest restructuring since the Cold War, equipping each of its active-duty divisions with many thousands—and potentially millions, eventually—of drones. The Defense Department’s Replicator Initiative aims to rapidly field thousands of autonomous systems before the end of this year. Programs like the Defense Innovation Unit’s Project G.I. are fast-tracking the next generation of drone technology.
This change brings a stark reality. For the last 100-plus years, access to oil to power tanks, jets, ships, and supply chain lines has determined the outcome of wars. But in a world of unmanned autonomous systems, access to batteries and AI systems is the new competitive advantage. Unfortunately, with batteries, we are behind.
China’s battery monopoly
The legacy lithium-ion battery technology that dominates the market for drones and other defense applications requires cobalt, nickel, manganese, and graphite—materials that flow through supply chains controlled by Beijing, from mining to metals processing to battery manufacturing. In the case of graphite, a material found in nearly every battery today, China controls processing of greater than 95% of the global battery-grade market. This is not the result of free market competition. This is the result of decades of Chinese industrial policy and subsidies to build its global leadership in batteries.
Despite recent investments in the U.S. and EU to build battery manufacturing, China’s consolidation of the market continues to grow every year. Why? Because China has a monopoly on the supply chain and technology feeding these battery plants. Beijing has restricted exports of critical battery materials, flooded global markets to undercut competitors, and in some cases stopped supplying batteries to particular U.S. drone companies. In other words, China is wielding its monopoly control of the market.
Congress recognized this vulnerability when it passed the 2024 National Defense Authorization Act, which prohibits the Defense Department from procuring batteries containing Chinese-sourced materials beginning in October 2027. What was a potential vulnerability is now the current reality in 2025, and the U.S. collectively has not been investing fast enough or strategically enough to solidify a domestic battery supply chain.
The solution is U.S. next-generation batteries
Let’s face it. After nearly 30 years of industrial policy, China has won the battle for lithium-ion dominance. Replicating its strategy just plays into the hands of the monopoly leader at the cost of massively wasted resources. The better path is to leapfrog the lithium-ion technology altogether by accelerating the phase-in of next-generation battery technologies that depend on local supply chains.
Lithium-sulfur batteries represent one of the most promising—and immediately available—alternatives. Unlike conventional lithium-ion technology, lithium-sulfur batteries don’t require Chinese-controlled minerals and processes, such as nickel, cobalt, manganese, and graphite. Instead, lithium-sulfur is built from materials readily available in the U.S. as byproducts of the existing, massively scaled oil and gas industry.
Additionally, lithium-sulfur is a leap forward in energy density, which means a 30-50% lighter weight battery. In drone applications, every gram matters. A U.S.-sourced, U.S.-manufactured lithium-sulfur battery that flies further and carries more payload, paired with American innovation, is how America can lead the drone revolution.
Several U.S. companies have been racing to commercialize lithium-sulfur technology. Lyten is one of them. We began commercial drone battery production in the second quarter, sourced and manufactured in the U.S., with energy density superior to lithium-ion batteries. The pipeline of interested customers is growing daily across aerospace, defense, supply chain, and industrial sectors—clear evidence of pent-up demand for alternatives to today’s lithium-ion technology.
It’s time to invest through the Defense Production Act
Now is the time to move with urgency. The U.S. has a superior alternative to lithium-ion technology available today, utilizing a massively scalable, local supply chain, and the manufacturing infrastructure in place to rapidly scale with the right strategic investments. The Defense Production Act grants the federal government authority to accelerate domestic production of critical technologies for national security purposes. President Trump previously used the DPA to boost domestic production of medical supplies during the pandemic. The current battery crisis demands similar urgency.
Starting with drones, it’s time for America to make a statement globally and execute a U.S.-led battery revolution.
The opinions expressed in Fortune.com commentary pieces are solely the views of their authors and do not necessarily reflect the opinions and beliefs of Fortune.
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