US-Korean Battery Alliance to Build NDAA-Compliant Batteries for Drones

WOBURN, MA – December 18, 2025 – In a significant move to reshape the global battery supply chain for aerial vehicles, US-based SES AI Corporation and South Korea’s Top Material have announced plans to scale up advanced battery cell manufacturing in South Korea. The collaboration is aimed squarely at the burgeoning drone and Urban Air Mobility (UAM) markets, with a critical focus on creating a secure supply chain compliant with strict U.S. defense regulations.

The partnership will leverage SES AI’s existing factory in Chungju, South Korea, combining its AI-enhanced battery technology with Top Material’s expertise in gigafactory-scale manufacturing. This initiative represents a direct response to geopolitical pressures and a technological push to power the next generation of electric aviation.

Securing the Skies: A Response to US Defense Policy

At the heart of this collaboration is the strategic necessity to comply with the U.S. National Defense Authorization Act (NDAA). Recent iterations of the NDAA have placed stringent restrictions on the Department of Defense's procurement of technologies from specific Chinese entities, including a prohibition on batteries from major Chinese manufacturers set to take effect in late 2027. These measures are designed to mitigate national security risks associated with a heavy reliance on foreign-controlled supply chains for critical components.

The Pentagon has long voiced concerns over the U.S. military's dependence on Chinese-made parts, particularly for battlefield technologies like unmanned aircraft systems (UAS). The vulnerability of such supply chains was starkly highlighted when Chinese sanctions disrupted battery sourcing for a prominent American drone manufacturer. With some estimates suggesting that up to 95% of the U.S. battery supply chain has links to China, the legislative push for alternatives has become urgent.

The SES AI and Top Material partnership is positioned as a direct solution to this challenge. By establishing a robust, cost-efficient, and secure battery supply chain based in South Korea—a key U.S. ally—the collaboration aims to provide SES AI’s drone customers with a dependable source of NDAA-compliant power sources. This move reflects a broader trend of 'friend-shoring,' where companies relocate manufacturing and sourcing to allied nations to build more resilient and politically stable supply chains for sensitive technologies.

Powering the Next Generation of Flight

Beyond the geopolitical drivers, the partnership is fueled by significant technological advancements and soaring market demand. The global drone battery market, valued at nearly $7 billion in 2023, is projected to surge to over $18 billion by 2032, propelled by the expanding use of drones in defense, logistics, agriculture, and surveillance.

The emerging Urban Air Mobility sector, with its electric vertical take-off and landing (eVTOL) aircraft, presents an even greater technological challenge. These vehicles require batteries with exceptionally high energy density (200-300 Wh/kg), immense power output for take-off, and rapid charging capabilities, all while ensuring stringent aviation-grade safety.

This is where SES AI’s technology comes into play. The company specializes in AI-enhanced lithium-metal (Li-Metal) batteries, which promise significantly higher energy density than conventional lithium-ion cells, translating to longer flight times and greater payload capacity. SES AI employs artificial intelligence across its entire process, from discovering novel electrolyte materials to optimizing manufacturing and predicting battery health and safety in real-time.

The Chungju facility, established in 2021 with support from the South Korean government, has already proven its capabilities. It produced the world’s first 100Ah Li-Metal battery for automotive applications in 2021 and, more recently, a 30Ah Li-Metal battery tailored for UAM applications in 2024, validating its technology for the demanding aerospace sector.

South Korea's Bid for Battery Supremacy

This collaboration does not exist in a vacuum. It is a key development within South Korea's ambitious national strategy to cement its position as a global leader in advanced battery manufacturing. The South Korean government and private sector have committed over $15 billion through 2030 to bolster the industry, with a focus on developing next-generation technologies like solid-state and lithium-metal batteries and quadrupling domestic production of critical materials.

These massive investments, which include tax breaks and potential cash subsidies, are designed to reduce the nation's dependence on Chinese minerals and materials while attracting high-tech international partnerships. By designating advanced battery technologies as a national strategic priority, South Korea is creating a fertile ecosystem for innovation and large-scale production.

The government's direct financial support for the establishment of the Chungju factory underscores its commitment to fostering this environment. By positioning itself as a stable and technologically advanced manufacturing hub, South Korea is becoming an indispensable partner for Western nations and companies seeking to de-risk their supply chains.

A Strategic Partnership Takes Shape

The planned collaboration is a synergistic union of complementary strengths. SES AI provides the cutting-edge, AI-powered battery designs, while Top Material contributes its deep expertise in end-to-end gigafactory engineering, manufacturing processes, and access to the local Korean materials and components network.

“We have operated our Chungju, South Korea facility since 2021 and have worked closely with Top Material on multiple programs over the past several years,” said Qichao Hu, Founder and CEO of SES AI, in a statement. “They are a trusted and proven partner to help us as we continue to scale our manufacturing capacity to support growing demand across drones and advanced mobility applications.”

This sentiment was echoed by Top Material's leadership. “We are thrilled that SES AI, with its outstanding battery design technology, and Top Material, with its accumulated battery manufacturing expertise, are collaborating to establish a battery production base for drones in Korea,” stated Whan Jin Roh, founder and CEO of Top Material. “We hope to further expand this partnership in the future and jointly challenge the global market.”

While the primary terms have been set out in a non-binding agreement, both parties are working towards a definitive agreement, which is targeted for the first quarter of 2026. The successful execution of this plan would not only provide a critical component for the future of aerial mobility but also mark a significant step in the global realignment of strategic technology manufacturing.