Published by Forbes Business Council

From climate targets to national security priorities, batteries have become one of the most strategic commodities of the decade. They now sit at the center of industrial policy, supply chain realignment and the race to secure energy independence. For investors, this convergence of geopolitical urgency, innovation and accelerating demand is creating a new opportunity.

Nowhere is this transformation more visible than in the mobility, defense and space sectors. Advances in battery technology are redefining what is possible, powering electric and hybrid-electric aircraft, enabling more autonomous and agile defense systems and fueling the rapid expansion of next-generation electric vehicles. The global EV battery market is projected to reach $251.3 billion by 2035, growing at a CAGR of 9.6%. The global space battery market, estimated at $4.6 billion today, is set to more than double to $10.2 billion by 2033, while the defense battery market is forecast to reach $2.8 billion by 2028.

While much attention is focused on new chemistries, there has also been significant innovation in inactive materials and manufacturing processes. As a mechanical and industrial engineer who worked in the automotive industry before investing in the mobility and energy sectors, I’ve seen firsthand how difficult it is to transform traditional manufacturing methods. Transitioning away from lithium-based batteries, which have long been associated with fire hazards and increased mining demands, costs billions of dollars and requires a large-scale overhaul of global production systems.

Yet today’s battery technology, including advances in current collectors, separators and electrolytes, is reshaping battery performance and cost dynamics across all chemistries. This is making it increasingly likely that such changes could indeed take place. It is also generating interest from investors looking to see which technology changes could have a significant effect on key industries for the long term.

Electric Vehicles: The Consumer Gateway To Advanced Battery Technologies

Electric vehicles remain the most visible and influential driver of battery innovation. Globally, EV sales grew 35% quarter-over-quarter earlier this year. The International Energy Agency projects that U.S. EV sales could account for nearly a quarter of all passenger car sales by 2035.

This growth is forcing automakers to solve persistent challenges around range, charging time and cost. GM and Ford, for example, are competing to bring lithium manganese-rich (LMR) prismatic battery cells to market. By using more abundant and lower-cost minerals like manganese instead of cobalt and nickel, these batteries can potentially provide both economic and supply chain advantages.

Other industry leaders are betting on silicon-based battery technology, which could increase EV range tenfold and has the potential to reshape adoption curves. This shift is fueling rapid market growth, with the silicon anode market projected to grow from $4.9 billion in 2024 to $9.7 billion by 2034 at a CAGR of 7.1%. The funding environment reflects this commercial readiness. Sila, founded in 2011 by Tesla’s seventh employee, raised $375 million in its Series G funding round last year. By replacing graphite anodes with silicon, Sila achieves 20% higher energy density and is scaling production to build batteries for companies including Mercedes-Benz and Panasonic.

Defense And Aerospace: Mission-Critical Reliability

Defense and aerospace applications present a fundamentally different investment profile from consumer EVs. In this space, security and reliability are paramount, often commanding premium pricing and creating opportunities for higher-margin solutions.

Private equity and venture investment in aerospace and defense surged in early 2025, reaching $4.27 billion globally by mid-March, nearly matching the $4.31 billion invested in all of 2024. Public spending is also on the rise, with the European Union earmarking up to $920 billion for defense through 2030.

Investment timelines in this sector are shaped by lengthy qualification and procurement cycles, as well as complex regulatory frameworks. Companies that forge early relationships with defense contractors and navigate rigorous certification requirements can secure multiyear contracts with predictable revenue streams.

Space applications present an even more demanding operating environment. Batteries must withstand extreme radiation, vacuum conditions and significant temperature fluctuations, all while delivering consistent performance over long durations. Solid-state batteries are emerging as a strong contender for spacecraft and planetary missions due to their thermal and chemical stability, greater energy density and ability to endure extreme conditions. NASA is among the agencies investing in this technology, which avoids the liquid components in lithium-ion batteries that can lead to overheating, fire or gradual charge loss.

Another innovative area lies in integrating space batteries with renewable energy systems. This is already being demonstrated in multiple programs: NASA’s Artemis mission to establish a sustainable lunar presence by the late 2020s pairs advanced batteries with solar arrays; Maxar Technologies has deployed solar-powered battery systems for geostationary satellites; and Airbus Defence and Space has introduced a solar-battery hybrid system for its satellite platforms.

Investment Considerations Behind The Battery Revolution

The rapidly expanding battery market for energy storage spans both consumer products and mission-critical systems. Investors vetting companies may want to consider if they are capable of moving from laboratory breakthroughs to scalable manufacturing, while securing strategic partnerships that bridge the mobility, defense and aerospace ecosystems.

There are also important market constraints to consider. Beyond the commercialization hurdles faced by technologies that require changes in manufacturing processes, supply chain vulnerabilities remain a central concern. Many critical materials used in batteries, such as lithium, cobalt, nickel and graphite, are concentrated in a limited number of countries, heightening the risk of supply disruptions driven by geopolitical shifts and trade policy. Additional factors to monitor include safety risks linked to manufacturing defects and growing sustainability concerns across the value chain.

Despite these challenges, from my perspective as an investor in the deep tech and energy sectors and as an engineer in the automotive industry, one truth has remained constant: Even in industries as traditional and slow-moving as automotive, transformation does come. The key is to anticipate what lies beyond the next curve and to be positioned when it arrives.

The information provided here is not investment, tax or financial advice. You should consult with a licensed professional for advice concerning your specific situation.