Russia to build major battery plant for drones with up to $120 million in state support

The Russian government will provide up to 10.46 billion rubles ($120.8 million) in subsidies for the construction of a lithium-ion battery plant that is expected to produce components for drones. Details of the preferential loan for Innovative Energy Systems (INESIS), a company controlled by drone manufacturer Transport Budushchego (lit. 'Transport of the Future'), was detailed in a government order dated Sept. 7. The Insider analyzed the document, under which federal budget money will go to state-controlled Sberbank in order to compensate the lender for income it is expected to forgo as a result of the loan to INESIS, which was issued at well below market rate. The cost of the construction itself could not be determined. The subsidies are spread over several years. Up to 491.9 million rubles is allocated for 2026, 1.78 billion rubles for 2027, 1.9 billion rubles for 2028, and nearly 2 billion rubles in 2029, while total subsidies through 2034 could reach 10.461 billion rubles. In practice, the funding is scheduled for 2026-2034, although the government's budget commitment for the project can remain in force until Dec. 31, 2040. INESIS manufactures batteries and is closely linked to Russia's drone industry. According to Russia's Unified State Register of Legal Entities, 85.81% of the company is owned by Transport of the Future LLC, which describes itself as one of Russia's largest developers and manufacturers of unmanned aircraft systems. In January 2025, Vladimir Putin took part in the opening of a research and production center for unmanned aircraft systems in Tolyatti, where Transport of the Future is the anchor resident. The company's plant in the city already operates production lines for lithium-ion batteries used in drones, as well as electronic circuit boards, electric motors, propellers, and other components. Transport of the Future has already received state support. The company participates in Russia's national project for unmanned aircraft systems and is a resident of the National Technology Initiative, a state-backed program intended to develop emerging technologies. Over 20 billion rubles has been invested in the project, according to the company's own data. Notably, in May former Transport of the Future CEO Yuri Kozarenko was arrested on suspicion of large-scale fraud. Kozarenko led the company from 2022 until this past March and had previously served as an adviser to Samara Region governor Vyacheslav Fedorishchev. The investigation is being handled by the Interior Ministry branch in the Belgorod Region. The Insider previously reported that the criminal case concerns the suspected theft of about 70 million rubles allocated under a state defense procurement contract for the production of drones. Investigators believe the money may have been diverted through friendly organizations that did not actually perform the work they were contracted to do. According to the same reporting, the company received a 4.5 billion-ruble state subsidy for the serial production of 750 vertical takeoff and landing UAVs. Transport of the Future markets its products primarily as civilian equipment, including as agricultural drones. There is, however, evidence that technologies associated with the company are being used by the Russian military. Novaya Gazeta Europe has reported that the Gektor drone, manufactured by Transport of the Future subsidiary Drone-Service and marketed as an agricultural aircraft, is being used by Russian forces in Ukraine. The outlet also reported that the company cooperates with the military training center at Tolyatti State University, where drone operators are trained. The new plant, with an annual capacity of 4 gigawatt-hours, would become one of the largest projects in Russia's emerging battery industry. INESIS has previously said the factory is intended to fully meet the battery needs of Russia's unmanned aircraft sector. A previous investigation by The Insider found that Russia is rapidly developing the domestic production of lithium-ion batteries, including those needed for the sorts of FPV drones commonly used on the battlefield. In the first quarter of 2025, Russia imported more than 6.6 metric tons of electrolyte for lithium-ion batteries and lithium tetrafluoroborate (calculated in electrolyte equivalent). If that pace had continued for the full year, annual imports would have been more than three times the 2024 level. Imports of cobalt oxide for the battery industry increased by a factor of approximately 15 over the course of the year. Chinese companies are the main suppliers of raw materials and production equipment. Russia remains dependent on imported components and raw materials, but the government has made localization of battery production a priority. State nuclear corporation Rosatom has said it intends to fully localize lithium-ion battery production by 2030. Its announcement, made in July 2025, followed the Russian military's seizure of Shevchenko, a village in Ukraine's eastern Donetsk Region that is home to one of the country's largest lithium deposits. Developing a domestic battery industry could reduce Russian FPV-drone manufacturers' dependence on foreign supplies and, in turn, limit the ability of Western countries to disrupt production through export controls.