Li-S Energy Powers Ahead with $7.8M Grant and Australia’s First Lithium Foil Line

Financial Performance and Grant Boost

Li-S Energy Limited (ASX: LIS) reported a significantly reduced net loss of $1.21 million for the six months ended 31 December 2025, down 55% from the prior corresponding period. This improvement was largely driven by a $7.8 million grant from the Australian Renewable Energy Agency (ARENA), which supports the company’s ambitious scale-up of lithium sulfur battery manufacturing. The grant not only strengthens the balance sheet but also accelerates the company’s pathway to commercial production.

Manufacturing Milestones and Technology Advances

During the period, Li-S Energy achieved a major milestone by commissioning Australia’s first lithium metal foil production line at its Geelong facility. This vertical integration of lithium foil manufacturing with battery cell production is a rare capability globally, offering advantages in cost reduction, supply security, and cell performance optimisation. The company expects to begin commercial sales of lithium metal foils and laminates to external customers in 2026.

On the product development front, Li-S Energy unveiled a next-generation power cell capable of discharging at over 3C, approximately 15 times the power output of typical lithium sulfur cells. This breakthrough could open new markets in multi-rotor drones and wearable systems, broadening the company’s addressable applications beyond high-energy density uses.

Strategic Partnerships and Market Expansion

Li-S Energy expanded its footprint in defence and aerospace sectors through collaborations with Praetorian Aeronautics, focusing on counter-drone battery systems, and UK-based MSubs Limited, targeting underwater and maritime vessel applications. The company also appointed Paladin Defense Services LLC as its U.S. representative to deepen engagement with American defence and government agencies, reflecting a strategic push into the critical U.S. market.

Participation in major defence exhibitions across London, Washington DC, and Sydney further enhanced Li-S Energy’s profile among key industry players and government stakeholders. These efforts align with the company’s goal to secure sovereign supply chains and establish itself as a trusted supplier in high-value, mission-critical battery applications.

Pathway to Commercial Scale Manufacturing

The ARENA grant funds a feasibility study and Front End Engineering Design (FEED) for Li-S Energy’s planned Phase 4 manufacturing facility, targeting up to 1GWh annual production capacity. The company has engaged Hatch, a global engineering consultancy with gigafactory experience, to deliver an investment-ready blueprint. This project aims to position Li-S Energy as a leading domestic manufacturer of advanced lithium sulfur batteries, reducing reliance on volatile international supply chains.

Alongside manufacturing scale-up, Li-S Energy continues to refine its battery management systems and pack integration, critical for partner adoption in defence, aerospace, and subsea applications. The company’s rapid in-house development cycle, completing cell iterations in under 10 days, provides a competitive edge in innovation speed and responsiveness.

Governance and Outlook

Leadership changes during the period included the appointment of Dr Lee Finniear as Managing Director and Andrew Davies as Chief Financial Officer, reflecting a strengthening of the executive team to support growth. The company declared no interim dividend, focusing resources on commercialisation and scale-up.

Looking ahead, Li-S Energy plans to commence shipping test cells to international partners pending regulatory approvals, with several partners ready to trial the technology. The company’s focus remains on advancing power cell development, completing Phase 4 studies, and securing financing for staged manufacturing expansion. These steps are critical to transforming Li-S Energy’s proprietary technology into a commercially viable and sovereign battery manufacturing enterprise.