How America’s Drone Manufacturing Sector is Failing
Cheaper competitors with better products, and a slow defence procurement sector are hampering the development of US drone producers.
If the war in Ukraine has taught military strategists anything, it is the importance of drones on the frontline. But a quick look at the numbers has the Pentagon worried that it may not be ready to fight this kind of war without serious investment into drone production.
Certainly, the raw statistics are concerning, with estimates showing that Ukrainian armed forces are consuming as many as 10,000 drones EVERY month. Obviously, losses must be accepted in any battle, especially for frontline hardware such as uncrewed drones.
Yet, whether they are lost in combat, shot down or intercepted by the widening range of counter drone weapons, are consumed in battle as ‘kamikaze’ drones, or suffer loss due to component failure, maintaining such a vast army of drones and then replacing them is putting an enormous strain on Ukraine’s manufacturing sector.
A strain that America’s industrial military complex might be unable to match if called upon for large scale warfare.
At present, one million first-person-view drones are produced annually by Ukrainian companies for use as loitering weapons. In contrast, the American drone production sector is small, and able to produce only several thousand drones per month - half of the current Ukrainian consumption rate.
“Until the U.S. military mainstreams operational concepts that demand large numbers of drones, production will remain at a relatively low level,” explains Bryan Clark, a senior fellow at the Hudson Institute.
“Currently, the Army has just one quadcopter program of record—that is, a program with a dedicated funding line in the budget—called Short Range Reconnaissance, or SRR,” notes a Defense One report. “Two companies are currently competing to win SRR’s Tranche 2 contract: Skydio, which says it can make a total of 2,000 drones per month, and Teal, which says its production capacity is in the thousands.”
While production could be expanded in a time of war, the components and raw materials would be hard to come by, especially as the drone manufacturing sector is dominated by Chinese firms (a possible US opponent).
“Over the last ten years, I’ve watched dozens of U.S. and allied drone companies go under in a market distorted by foreign subsidies,” said Skydio CEO Adam Bry in testimony to Congress.
Some in the drone manufacturing sector blame the slow pace of US military procurement which has to follow strict purchasing rules and must adhere to a list of US-only suppliers. These restrictions and the accompanying red tape make it difficult for drone start-up companies to make headway.
“It's really difficult for a startup to get into this space,” notes Ryan Gury, CEO of Performance Drone Works, “and it takes a lot of capital to get to the place that we're at.”
Meanwhile, the Chinese (often state-sponsored) competitors make it even more difficult.
“You end up paying, you know, 100 times more for a U.S. component that you would for a Chinese component,” adds Soren Monroe-Anderson, co-founder of first-person-view drone company Neros.
Even worse for the American top brass is that the higher prices do not necessarily equate to better drones.
“Products from Chinese manufacturers such as DJI and Autel are still able to perform better in almost every regard, making them the clear choice when purely price-to-performance ratio is a deciding factor,” notes one Western drone consultant who preferred to remain anonymous in interview with Defense One.
Meanwhile, Ukraine is fielding thousands of drones every month, some costing as little as $500 each. Even if their simple components make jamming possible, their low cost makes them easy to replace.
The US, however, is buying fewer drones and those that it does buy are more expensive.
“The Army’s program-of-record quadcopter cost $39,800 per drone for the first tranche of program,” notes the Defense One report, “while drones in tranche two are expected to cost $65,000 apiece. Even the cheaper drones on the Blue List [of US approved suppliers] can clock in at $14,000.”
Some in the military, such as Army Chief of Staff Gen. Randy George, think that the issue is a simple matter of funding. Saying, “I think once we start to show a demand for more of these, and people are producing them, the prices will continue to come down.”
David Benowitz, a drone market specialist at DroneAnalyst, disagrees, as the sheer size of Chinese drone production makes the advantages of scale exceedingly difficult to catch up on. According to him, while an order of a couple of thousand drones might “significantly help justify investments that could ramp up production and potentially lower costs by investing at a component level.” It wouldn’t, he believes, “… be sufficient to significantly close the gap in capacity or price compared to China.”
Either way, a lack of available drones makes it difficult to give American soldiers training time and makes them fearful of crashing expensive equipment when they do get the chance.
Given the billions of dollars spent on other hardware development and supply, such as ships, planes, and armoured vehicles, America’s drone production sector is getting ignored.
Possibly the Pentagon is ignoring the problem as it is still not clear how military drones of the future will develop. In the early days of the war in Ukraine, the Turkish Bayraktar TB2 UAV was the 'go-to' type of drone. However, it soon became clear that they were too easy to jam or shoot down. Today, first-person-drones are the most common. However, as counter-drone technology improves, the weaknesses of these small, low-cost drones may soon be overwhelming, leading to their being replaced by something bigger and better.
In this respect, maybe the US military chiefs are waiting for the war in Ukraine to end before it acts. A time when it could take the best minds in Ukrainian drone production and use them to develop world-class drone designs fit for a superpower.
As Clark notes, ““When you look at Ukraine, now, they are building insane capacities to build drones. After the Russian-Ukraine war ends, “there will be a production capacity that will in return address the European and maybe even North American market.”
You could also read: What Trump’s Missile Defence Plan Could Learn from Ukraine or Drone Production Focus for 2024 - ‘the Year of Land Systems’
