Rheinmetall – Between Mega Deals and Communication Missteps
The Düsseldorf-based defense group Rheinmetall has teamed up with Boeing Australia to deliver the MQ-28 Ghost Bat combat drone to the German Armed Forces by 2029. As the local system integrator, Rheinmetall stands to gain revenue potential in the high triple-digit millions. The autonomous platform has already completed over 150 test flights and is seen as a significant advancement in reconnaissance and electronic warfare capabilities. Defense Minister Pistorius described the drone as a “competitor to be taken very seriously.” At the same time, Airbus is also vying for the contract with its own solution; the competition for the multi-billion-euro tender is in full swing.
Rheinmetall’s operational engine is running at full speed. The order backlog stands at nearly EUR 64 billion; by the end of the year, it is expected to more than double to over EUR 135 billion. CEO Papperger is targeting a 40–45% increase in revenue for 2026, with the operating margin expected to rise to around 19%. However, an interview with The Atlantic sparked fierce backlash. Papperger compared Ukrainian drone production to “playing with Legos” and “housewives with 3D printers in kitchens.” The outrage was predictable, and the company had to publicly backtrack. It was an unnecessary misstep that tarnishes the image of a trustworthy partner.
Despite the communication blunder, Rheinmetall’s strategists are working on the future. A joint venture with Spain’s Indra is set to be established in 2026 to produce up to 3,000 military trucks—a billion-euro business. The sale of the automotive supplier division is also on the agenda; once completed, the group would be a pure-play defense company. Shareholders can look forward to a dividend of EUR 11.50, with the ex-dividend date in mid-May. Analysts are divided. Goldman and JPMorgan see upside potential of over 40%. Citigroup, on the other hand, started with a “Neutral” rating and warns of normalizing ammunition demand. The quarterly results on May 7 will likely guide the stock’s next move. The share is currently trading at EUR 1,572.20.
NEO Battery Materials – Military Contracts and Production Launch
The past few weeks demonstrate how seriously NEO Battery Materials (NEO) is taking its defense division. Following the appointment of retired four-star General Chang-Jun Ko to the supervisory board, a memorandum of understanding was signed in March with the Association of the Republic of Korea Army (AROKA). In early April, the company followed up with a direct partnership with the 12th Infantry Division near the Demilitarized Zone. In field tests, NEO’s silicon anode cells doubled the flight time of a reconnaissance drone compared to Chinese competitors, a 98% increase. Charging times were cut in half. For investors, this means there is concrete evidence of technological superiority in a market prioritized for security policy.
At the same time, NEO is pushing ahead with the construction of its own production facility in South Korea. On 3.2 hectares, a capacity for 500 megawatt-hours per year is being developed. That is enough to power around 66,000 small reconnaissance drones or 315,000 so-called loitering munitions. The company sources all its raw materials from outside China. This could prove to be a real competitive advantage in the long run. This aligns with the new US procurement guidelines, which ban Chinese batteries from the defense sector. CEO Spencer Huh warns of a global supply shortage, and this is precisely where NEO comes in with its Korean-manufactured cells. The team is focused on completing the facility on schedule by the fourth quarter of 2026.
Although the company has not yet reached operational breakeven, the groundwork for initial revenue has been laid. Several purchase agreements with drone and robotics manufacturers are in place, including a CAD 4.5 million order from September 2025. In addition, two Fortune 500 automotive companies are relying on NEO’s batteries. The combination of technological superiority and military integration gives the company a clear, unique selling proposition. Analysts see room for growth in the current valuation. For investors with a long-term perspective, this presents an opportunity to benefit early on from a niche provider that is skillfully capitalizing on geopolitical trends. The next major milestone is coming up on June 26 with the quarterly earnings report. The stock is currently trading at CAD 0.55.
BYD – Global Expansion Meets Domestic Pressure
For a long time, BYD was considered Tesla’s biggest challenger. But the turn of the year 2025/26 has split the Chinese electric vehicle maker. Domestic sales records are crumbling, while the export machine is running at full speed. Sales figures for the first quarter of 2026 show a total of around 700,000 vehicles, a 30% decline. While March brought a recovery with just over 300,000 units, sales are still down 20% year-over-year. This marks the seventh consecutive month of declining year-over-year figures. This gap between domestic weakness and international strength is becoming a key issue for investors.
The price war sparked by BYD itself and the expiration of government purchase incentives at the end of 2025 are taking a massive toll on the company. Its market share in China plummeted to just 7.1%, trailing Volkswagen, Geely, and Toyota. This makes the export figures all the more astonishing. They are literally exploding. In March, BYD shipped over 120,000 vehicles overseas, a 65% increase. This brings the share of overseas sales to around 40% of total sales. The export target for 2026 was subsequently raised to 1.5 million units. The only question is whether overseas markets can permanently compensate for the decline in the domestic market.
The second generation of its Blade battery offers rapid charging, reaching 70% capacity in just 5 minutes, providing a tangible edge in performance. But the path to the global top tier is bumpy. In Brazil, the company ended up on the blacklist due to labor law violations. In Japan, domestic subsidies put BYD models at a massive disadvantage compared to Toyota. Furthermore, the US and Canadian markets remain difficult to access due to quotas and tariffs. Added to this is uncertain progress on planned plants in Europe and Mexico. Whether technical superiority will ultimately overcome the structural hurdles remains to be seen. Currently, a share costs EUR 11.628.
The USD 631 billion battery market remains a battleground of geopolitical and technological forces. Rheinmetall is offsetting its communication misstep with record orders and a profitable exit from the automotive sector, but remains exposed to cyclical risks. NEO Battery Materials demonstrates technological superiority beyond Chinese supply chains through military partnerships and its own production in South Korea. BYD is grappling with declining domestic sales and trade barriers, while the superior Blade battery alone is expected to save its global expansion. Ultimately, the decisive factor will be which company best combines scale, innovation, and execution.
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