Li-S Energy’s Power Cells reach US defence testing as scale-up plans gather pace

Power Cells move Li-S Energy beyond energy density

Li-S Energy Limited (ASX:LIS) is positioning its new high-power battery cells as the bridge between laboratory performance and commercial applications, after a year that included defence testing, drone validation and a $7.8 million scale-up grant. The company says its 10Ah and 11Ah Power Cells open applications that were not accessible with its original high-energy cells, particularly in drones, robotics and communications.

The technical claims are differentiated by operating profile. Li-S Energy says the 10Ah cell can deliver 2C continuous discharge and 5C peak discharge, while the 11Ah version reaches 7C continuous and 10C peak discharge. The company’s presentation cites continuous power density above 1,500 W/kg for the 10Ah cell and above 2,400 W/kg for the 11Ah cell, although the two products have different cycle-life characteristics and are aimed at different use cases.

The development builds on the company’s high-power cell milestone, where Li-S Energy said its 11Ah cell could deliver up to 50 times the power of traditional lithium-sulfur designs. The AGM materials say the cells have now been characterised and supported by datasheets, a step the company views as important for partner and customer evaluation rather than proof of commercial sales.

Defence evaluation adds a demanding customer test

Li-S Energy has shipped Power Cells to the US Department of Defense and says its first cells were delivered to the US Army DEVCOM C5ISR Center at Aberdeen Proving Ground in Maryland. The stated applications include unmanned aerial vehicles, land systems and soldier-wearable equipment, with testing intended to help identify programmes where lower battery weight, longer operating time or greater payload could matter.

That work sits alongside the company’s Pegasus flight milestone, which included a near two-hour flight over more than 75 kilometres on a single battery pack. In September, the Pegasus demonstrator flew in Queensland with V-TOL Aerospace and Halocell under a federally co-funded programme. Li-S Energy presents the flight as real-world validation, but the AGM materials do not disclose a resulting customer order or binding supply agreement.

Scale-up planning now reaches beyond the pilot line

The company’s manufacturing plan is moving into feasibility and front-end engineering design for a potential next-phase plant of up to 1 GWh. ARENA has awarded Li-S Energy a $7.8 million grant for that work, while the company says it has secured $22.4 million in federal grants and funding across its programmes, with $9.3 million yet to be received.

Li-S Energy reported $15.0 million in cash and cash equivalents at 30 June 2026, plus $0.6 million in interest-bearing investments. Chairman Ben Spincer said the balance sheet provided flexibility for development and scale-up preparation, while also acknowledging the need to maintain tight financial control as the company pursues new opportunities. The proposed route remains staged: optimise the current facility, complete the scale-up design, then consider a phased build and potential international joint venture or licensing options.

Commercial conversion remains the central test

Li-S Energy’s partner network now spans defence and commercial drone programmes, including work involving MSubs, Praetorian Aeronautics, Safesky Systems, EPE and Kea Aerospace. The company says its lithium-sulfur cells have also passed repeated simulated pressure testing equivalent to dives at 1,000 metres for MSubs applications. These activities broaden the technology’s evidence base, but most remain testing, collaboration or evaluation programmes rather than disclosed offtake contracts.

The board has also put a new four-year, at-risk long-term incentive structure to shareholders and introduced a minimum shareholding policy for directors and key management personnel. The governance changes arrive as management says the next two years will be critical: product designs must be locked down, grant-funded engineering work must be delivered, and collaborations must progress from testing towards commercial supply. Whether technical validation can become recurring revenue before the next scale-up cheque is required is now the more consequential question.