With drones revolutionizing the battlefield in Ukraine, Iran, and beyond, the U.S. is striving to dominate this latest evolution in military technology the way it has with previous wartime innovations. There is just one problem: China got there first.
Teardowns of drones recovered in Ukraine hint at the extent of China’s stranglehold on production. A recent dissection of a Russian first-person-view, or FPV, quadcopter by the Bulava unit of Ukraine’s Presidential Brigade found numerous parts manufactured at least partially in China: batteries, motors, and an unmarked central “brain” chip that Bulava traced to a Chinese supplier. Like Bulava’s own similar drones, the Russian version couldn’t have been built without China’s supply chain, according to the unit’s chief drone specialist.
The degree to which China has helped build the suicide drones Iran is using to cause havoc in its war with Israel and the U.S. is less clear. But defense analysts and industry experts say Chinese control over global drone production means Iran is likely just as dependent as Russia and Ukraine.
“It has already won World War III because everything is in its hands,” Bulava’s drone specialist, who goes by the call sign Udav, said of China. “No one will be able to change that in the near future, or even in the long run.”
Defense Secretary Pete Hegseth has vowed to break China’s dominance in drones with a $1.1 billion program he calls Drone Dominance. The initiative aims to rev up American drone production and bring down costs by pledging to buy more from U.S. suppliers. A breakdown of the parts that go into a typical FPV drone shows where the Pentagon might succeed, and where it is likely to struggle.
China has already shown a willingness to weaponize its control over the drone supply chain. In late 2024, Beijing blacklisted California drone maker Skydio for selling drones to Taiwan. Cut off from Chinese suppliers, the company was forced to ration batteries, which prompted Chief Executive Adam Bry to accuse Beijing of trying to “eliminate the leading American drone company.”
Beijing, which claims Taiwan as part of China, said the move against Skydio was justified as a defense of its sovereignty.
Most drones are simple machines, which means there is no technical reason why the U.S. can’t compete with China. “The laws of physics are the same here as they are in China,” said George Matus, co-founder of Utah-based drone startup Vector. “It’s really just an issue of economies of scale.”
The importance of scale comes through in recent battlefield tallies. Iran launched more than 4,000 suicide drone attacks in the first month of its war with the U.S. and Israel. The Ukrainian military has been burning through roughly 10,000 unmanned aircraft every month for more than a year.
The problem for the U.S. is that China’s advantage in scale—and therefore, in cost—is immense. U.S.-made quadcopters marketed to the military can cost upward of $15,000, at least three times the bill for an equivalent Chinese-made drone.
An America-First Solution?
To have a hope of fielding a sustainable drone fleet capable of competing with China, the U.S. needs to solve two problems.
First, it needs to find a way to break China’s monopoly on batteries and motors. The Trump administration has injected billions of dollars into American companies that produce critical minerals needed to make motors and batteries, though experts warn that building the complex infrastructure for mass production could take a decade or more.
It also needs to find ways to bring down the costs of the other parts as much as possible. Demand is a key issue here, industry insiders say. China owns 80% of the commercial drone market in the U.S., according to data from Drone Industry Insights. Nearly all of that dominance is due to the Chinese giant DJI Technology, a maker of cheap yet high-performance drones beloved by content producers, real estate agents, factory inspectors, and cash-strapped American police and fire departments.
For U.S. competitors like Skydio, “the only client now in the U.S. is the military,” says Drone Industry Insights co-founder Hendrik Bödecker. “Not government, not industry.”
With Drone Dominance, the Pentagon aims to be a better client. It has promised to buy 340,000 FPV drones over the course of a multiyear, multiphase competition between American drone makers. It hopes the number is large enough to stimulate growth in the U.S. supply chain and reduce costs. By the end of the program, the goal is for an individual drone to cost $2,300.
At the moment, the program is straining American suppliers as startups snap up limited supplies of the chips used to control drones, according to Ryan Beall, founder of TILT Autonomy, which makes autonomous systems for drones used by the U.S. Navy. Though homegrown suppliers may ramp up to meet the demand, some in the industry worry that the military won’t continue buying enough drones to sustain the expansion after the program ends, likely in late 2027.
In December, the Federal Communications Commission moved to expand the potential market for American drone makers beyond the military by banning all foreign-made drones and critical drone components on national-security grounds. The FCC granted temporary exemptions to some non-Chinese companies, but the full ban is slated to take effect in 2027.
The ban might help domestic drone makers grow at home by sidelining DJI. But it will also raise their costs by disrupting access to affordable parts from emerging suppliers in Ukraine and Taiwan, according to Mike Sims, chief executive of Empirium, a marketplace that helps companies find China-free parts and services.
“If we’re intervening in the markets and creating costs for the sake of national security, we’re actually harming our industry because they’ll be noncompetitive abroad,” said Sims, who recently decided to get his company out of the drone business.
The Defense Department and the FCC didn’t respond to requests for comment.
The U.S. effort to expand drone production is moving in the right direction but will be slow and painful, according to Trent Emeneker, a former supply chain expert at the Pentagon’s Defense Innovation Unit and co-founder of the drone-training startup Kill Zone.
“At the end of the day, it is really hard because you’re having to reinvent an industry that already exists that is high quality and low cost,” he said.
Graphics sources: Ryan Beall, TILT Autonomy; Hendrik Bödecker, Drone Industry Insights; Fiona Murray, Massachusetts Institute of Technology; Trent Emeneker, Kill Zone; Bulava Unit, Presidential Brigade, Ukrainian Armed ForcesZone; Bulava Unit, Presidential Brigade, Ukrainian Armed Forces
