Dive Brief:
- Component maker Performance Drone Works signed a $820 million conditional loan commitment with the Department of Defense to ramp up domestic manufacturing capacity, according to a July 31 press release.
- PDW plans to use the funds to grow its manufacturing capabilities, physical footprint and workforce to “deliver critical components and systems at the scale and speed required,” CEO James Slider said in an email statement
- The company is not able to disclose additional information, but the loan will fund a “specific mix” of facility improvements, manufacturing infrastructure, and equipment as well as improve its production capabilities “as the overarching effort progresses,” Slider added
Dive Insight:
The loan, awarded through DOD’s Office of Strategic Capital, aims to establish production of drone and robotic components in the United States, such as propulsion, power and control, vision systems and other technologies that improve the devices’ performance.
The parts being made will support Group 1 and Group 2 unmanned aircraft systems made by PDW and other domestic manufacturers. The drones under the groups listed weigh up to 55 pounds, have an altitude of up to 3,500 above ground level and a speed of about 288 miles per hour, per the military's Joint Air Operations guidance.
China currently dominates the drone market with the largest global presence and the “deepest component supply chain,” valued at $15.6 billion in 2025, according to research firm Drone Intelligence.
China’s dominant market presence led the U.S. to pivot away from that country’s drones and components as national security concerns progress. In 2017, under Trump’s first administration, the U.S. Army banned its soldiers from using China-based DJI drones, according to a blog post from UAS component maker Vision Aerial.
Most recently, President Donald Trump signed the National Defense Authorization Act for fiscal year 2026, which includes updated drone sourcing requirements. Under the NDAA, DOD would be prohibited from purchasing batteries for weapons and support systems made with materials from foreign entities of concern, such as China or Russia, beginning Jan. 1, 2028.
Trump also made purchasing critical parts outside of the U.S. more difficult for defense companies such as drone manufacturers. He signed an executive order restricting DOD’s authority issuing waivers to procure critical minerals and components from foreign entities of concern such as China, in a bid to safeguard domestic end-to-end supply chains.
For its part, China has made it harder for U.S.-based companies to procure components. Last month, China’s government added 10 military-linked companies to its export control list and 46 defense and aerospace firms to its procurement list, including Lockheed Martin and General Dynamics.
As more drone companies pivot to reshore their supply chains, some are making plans to expand capacity. This can be stressful, James Shanahan, OSC senior managing director, said during a panel at the American Drone Leadership Summit in Washington, D.C. on July 31.
“I think as we look at the landscape, whether it's on the component side or on the OEM side, we're a bit ‘all of the above’ in terms of really providing the capital necessary for this industry to accelerate its growth, and have… the supply chain necessary to supply that growth,” Shanahan said. “At the same time, supporting folks on the downstream who are bringing established technology that is in high demand from our department and have tremendous commercial use cases more broadly.”
