The Pentagon wants to build drones without Chinese parts. It's off to a bad start.

This is a transcript, for the video found here:

Bullets:

Chinese companies produce over 90% of the commercial drones in use today.

China also enjoys near-monopolies on the production of components, and deep supply chains.

The White House and Pentagon have announced multi-billion dollar initiatives to create a drone manufacturing industry in the United States, particularly for warfighters.

At the same time, Chinese officials have banned the exports of key drone materials and components to any company with a dual-use intent.

Only a handful of American companies are being considered for the Pentagon effort, and testing is underway. However, major problems are already evident.

Report:

Good morning. DJI is a drone manufacturer, based here in South China. They are the leading producer of drones in the world, and that’s a problem for policymakers who want to get Chinese companies out of American supply chains. American drone companies have a “Made-in-China problem”, and that’s clashing with policies from Washington to get Chinese components out of drones used by the Defense Department.

China controls 90 percent of the market for commercial drones, along with everything that goes inside drones. When you see a number like that—90% of the market worldwide—that means they make more than the rest of the world, combined, times 9. So the United States isn’t even close to setting up the industrial plant to catch China. That’s a problem for the Pentagon, and now it’s a problem for American drone manufacturers who want to build drones for the Pentagon, because China is cutting those companies off. Skydio is one of our biggest companies, and now they are trying build everything themselves. China could in theory shut down the entire drone industry across the world for an entire year, if they wanted, according to this group leader at the Pentagon.

The Defense Department has what is called a Blue List, which are companies that have been approved to build drones for the military. These drones need to be free of Chinese components—cameras, flight controllers, radios, and ground control—none of that can come from China, if a drone company wants to win a Pentagon contract.

It’s very difficult to get on that list, according to some drone makers. Over 300 companies applied to have their drone models considered, but only 23 companies made the cut. For many of them, it’s because on close examination, they did use Chinese components.

There is just no getting around China in the drone market, and DJI just sucks all the air out of the room. Industry insiders know that DJI has a huge head start, makes high quality drones, and does so affordably. DJI of course also has the Chinese supply chain of magnets and other materials that Chinese export bans are cutting off for everyone else. So domestic companies cannot possibly compete, and according to the head of the US National Drone Association, that isn’t going to change until DJI is banned. Nobody will risk major investments unless DJI goes away.

President Trump signed an executive order in June, to create a drone manufacturing industry in the United States. Section 7, paragraph C seeks to guarantee that drones and their components remain under American control, free from national security risks, and secure the supply chain for drones against foreign control. This is a survey of government users in 2022, and DJI was the top supplier for civil drones. These are drones used by civil authorities—local governments, mainly, not for commercial use.. So think here organizations like police departments and city planning and engineering. Dual-use drones are those used in civil and in defense applications.

The Defense Department recently produced this video, with the Secretary of Defense announcing the initiative to build out our manufacturing base for drones, for warfighters. You need to watch it yourself, to believe it. That would be an elementary-school science project here in—well, anywhere in Asia. So if you don’t find this presentation here from the head of a department with a trillion-dollar budget to be confidence-inspiring, what’s here at the New York Times probably won’t change your mind.

This is the Defense Department unit referred to in the Forbes piece. They set up an area in Alaska, to test some drones from leading US companies who are trying to win these big Pentagon contracts. They spent four days, testing prototypes, and had a group of soldiers trying to stop the drones with electronic jamming gear. The purpose is to find an American company who can build millions of small, inexpensive drones that don’t need Chinese parts.

That’s going to take a lot of time, and a lot of money. Anduril Industries is one that is under sanction from China, and if they want to be in the drone business at all, they will from now on need to build everything in-house. And the president’s son is now on the board of directors for Unusual Machines, and I have a sudden, strange feeling a huge contract is heading their way. For now, though, there are lots of companies that want to win the jackpot that’s going to be paid to someone, so they can collect the money and sit on a beach for the rest of their lives.

So here the companies are testing the drones, and the first two days of testing revealed lots of problems. Over 100 companies applied, and the Defense Innovation Unit picked the best four. So these are the best four American drone companies that the Pentagon can find. The drone built by Dragoon had engine problems, then got lost. Failed to hit a target. Then on the last day, their drone did recognize an M113 APC, and crashed into The hit was considered a success even though the target was the wrong one. Okay, this is literally the definition of a friendly-fire incident. The M113 is used right now, in NATO militaries. This shows how low the bar is, that this company scored an A-minus even though they just blew up an armored vehicle with friendlies inside.

AeroVironment was worse. First a launch failure, then crashed into a mountain, then nearly crashed again into a group of soldiers that were in the exercise. AeroVironment was the top-ranked civil drone maker here on this table from before, from three years ago. But that’s the problem: in 2022, they were able to put together high-quality drones, because they could source parts from China. Now the Chinese have cut them off, and the Pentagon is saying that you need to build them yourself. If you guys want this big pile of money, all you need to do is build a drone that doesn’t blow up when it takes off, then doesn’t blow up our own guys.

This is Phoenix Ancient Town, in Hunan. Be Good.

Resources and links:

YouTube, Pete Hegseth Unleashes PLAN to Modernize US Military's War Fighting Effort?

The Best Drone Manufacturing Companies in 2022

https://droneii.com/best-drone-manufacturing-companies?srsltid=AfmBOoodjDNePoz5Tpn7nPbZRLKaY6vbvaEhP8qk-LNdm3Unv_VXbfiq

UNLEASHING AMERICAN DRONE DOMINANCE

https://www.whitehouse.gov/presidential-actions/2025/06/unleashing-american-drone-dominance/

Drones Are Key to Winning Wars Now. The U.S. Makes Hardly Any.

https://www.nytimes.com/2025/07/13/business/drones-us-military-manufacturing-lags.html

Silicon Valley’s Military Drone Companies Have A Serious ‘Made In China’ Problem

https://www.defensemirror.com/news/39328/U_S__Dependent_on_China_for_Key_Drone_Components

Forbes, Silicon Valley’s Military Drone Companies Have A Serious ‘Made In China’ Problem

https://www.forbes.com/sites/davidjeans/2025/04/16/silicon-valley-drones-china-problem/

X, Unleashing U.S. Military Drone Dominance

https://x.com/SecDef/status/1943748870993064004

DJI market share: here’s exactly how rapidly it has grown in just a few years

https://www.thedronegirl.com/2018/09/18/dji-market-share/

Why America fell behind in drones, and how to catch up again

Why America fell behind in drones, and how to catch up again

NAVIGATING THE SKIES OF REGULATION AND INNOVATION: THE CASE OF CIVIL DRONES

https://competitionlab.gwu.edu/sites/g/files/zaxdzs6711/files/2024-09/drone_1_0.pdf