February 5th, 2026 | 08:15 CET
Setback, consolidation, and a new contender: Rheinmetall, DroneShield, and NEO Battery Materials
Drones are the future in both the military and civilian sectors. Rheinmetall also wants to be part of this. But Germany's largest defense contractor, known for its heavy military equipment, has recently had to swallow a disappointment. In contrast, NEO Battery Materials could finally take off. In recent months, the company has caused a stir with orders for its revolutionary batteries for applications in drones, robotics, and electromobility. Now it has brought two well-known corporations on board. And what about DroneShield? Things have quietened down somewhat for the high flyer from 2025. But there are opportunities for orders in its home country.
time to read: 4 minutes
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Author:
Fabian Lorenz
ISIN:
RHEINMETALL AG | DE0007030009 , DRONESHIELD LTD | AU000000DRO2 , NEO BATTERY MATERIALS LTD | CA62908A1003
Table of contents:
Author
Fabian Lorenz
For more than twenty years, the Cologne native has been intensively involved with the stock market, both professionally and privately. He is particularly passionate about national and international small and micro caps.
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NEO Battery Materials: Battery player for the West
Is NEO Battery Materials' stock finally breaking through? The company is still valued at less than CAD 100 million. Not only does it have revolutionary battery technology that sets standards in terms of performance, charging speed, and price. It already has orders from the drone, robotics, and e-mobility sectors and has started production at a factory in South Korea this year. So, revenue will be generated starting this year. NEO is also working with the Korea Institute for Defense Industry (KOIDI), an organization authorized by the South Korean Ministry of Defense to strengthen the national defense sector. This brings NEO into the country's defense industry ecosystem – an environment comprising the military, industry, research, and government agencies.
And then yesterday came the next bombshell: a partnership with zinc giant Korea Zinc and technology company Taesung. Together, they plan to commercialize advanced battery technology for drones, robotics, and micromobility.
The technology partnership focuses on optimizing critical performance parameters of lithium-ion batteries that are specifically relevant for drones, robotics, and micromobility. Copper foil is an integral part of lithium-ion batteries. The aim is to reduce weight and costs with composite copper foil and silicon anode materials. At the same time, the safety and service life of the batteries are to be improved. NEO Battery Materials sees the innovation as a direct complement to its revolutionary silicon anodes. A spokesperson for Korea Zinc stated the goal of presenting market-ready drone and micromobility batteries by the end of 2026. Competitive battery manufacturers outside China are essential. Even the typically sober researchers at Fraunhofer recently sounded the alarm that China is beginning to introduce trade restrictions on battery cells and their production chain, similar to what it has done with raw materials. With its partners in South Korea, NEO appears to be shaping up as a strong battery player for the West. The stock should benefit from this.
https://youtu.be/PLNIP9FtK58?si=DP6xDr4a7ECKHOmq
Rheinmetall: Comes up empty-handed with kamikaze drones for the German Armed Forces
Rheinmetall is already the largest German defense contractor and is also a leading player in Europe. However, it is better known for "heavy equipment" such as tanks and howitzers. When it comes to future technologies such as drones, the Düsseldorf-based company is not the first to come to mind. Rheinmetall wants to change that. Its recent efforts in this direction have tended to generate negative headlines. Various media outlets, including Bloomberg and Handelsblatt, recently reported that Rheinmetall has come up empty-handed in the German Armed Forces' latest drone project.
According to these reports, the German Armed Forces has commissioned the two start-ups Helsing and Stark Defence to produce kamikaze drones. The so-called loitering munitions are AI-controlled drones that can "circle" a target area for an extended period of time. Only when a target has been found and identified is an attack launched. This combines the characteristics of a drone (reconnaissance/surveillance) and a guided missile (precise strike). The drones from Helsing and Stark Defence are already in use in Ukraine.
The German Armed Forces have a total budget of EUR 900 million for kamikaze drones. Helsing and Stark are said to have received orders worth around EUR 300 million each. Rheinmetall could therefore still get a share of the action.
DroneShield: Share price remains volatile
When it comes to drones, it is, of course, necessary to talk about how to shoot them down. And in this field, investors can hardly ignore DroneShield. The shares of the Australian specialist in drone defense products were among the high flyers on the stock market last year. From less than AUD 1 at the beginning of 2025, it rose to over AUD 6 by October. What goes up quickly can also come down quickly. This is what happened to DroneShield, and within a few weeks, it plummeted to below AUD 2 due to double-reported orders and insider sales. DroneShield shares are now trading above AUD 3 again, but remain volatile.
Since the turmoil in the fall, the company has been noticeably more cautious in its communications. Most recently, there were reports of a collaboration with the Australian Department of Defense. According to these reports, DroneShield was selected as a supplier for Project LAND 156 – Line of Effort 3. Specifically, this involves defending against threats from small drones in the country. As a Category 2 supplier, DroneShield will be able to supply hardware, software, and services in the future. However, there are also partnerships with other suppliers.
Important for investors: Inclusion in the panel is not a contract and does not guarantee revenue. Individual locations are still being evaluated and will then be put out to tender separately. Only then can concrete orders be placed. Nevertheless, DroneShield emphasizes that the potential is likely to be "material" because demand for drone defense solutions is growing and there is a political tailwind. According to this, the Australian government plans to invest around AUD 1.3 billion in nationwide drone defense over the next 10 years.
NEO Battery Materials' battery technology is more than competitive, orders are in place, and production has started. This shows that it is more than just a start-up. The new partners should provide additional confidence and increase NEO's visibility among customers and investors. For investors with a bit of patience, something big could emerge here. For Rheinmetall, not being considered for the German Armed Forces' drone contract is not a disaster, but it is certainly a wake-up call. Diversification into future technologies is certainly the right move, but it is not a sure-fire success. When it comes to drone defense, investors can hardly ignore DroneShield – with all its opportunities and risks.
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