In a Kyiv suburb, six Ukrainian soldiers pile out of their dusty SUV and stretch in front of a Soviet-era factory. They have driven from Bakhmut, where they’ve held trench positions for over a year. The soldiers tour the factory – previously used for electronics for modular homes – and offer feedback on several new production lines of drones. They favor one prototype because they already use a similar Chinese-made octocopter; they ask if they can take it to test in battle. Today, their request feels especially urgent: China has just banned the export of such drones.
China’s export ban, effective September 1st, sets the stage for a significant void in Ukraine's battlefield technology. Where the gap presents a problem for Kyiv, it is an opportunity for U.S. industry that has already catalyzed a race among the well-prepared. Ukraine’s drone production, though on the rise, will struggle to bridge such a sudden supply gap. Western counterparts don’t mass-produce the cheap, Chinese-made drones that became ubiquitous on the battlefield. Washington and its allies should help Kyiv buy drones in the short term but focus on incentivizing a NATO-wide industry sprint to ramp up production over several months. Blending Ukraine-focused aid purchases with industrial policy that helps the Pentagon prepare for a China confrontation would leverage bipartisan political support.
To understand the gap, it’s helpful to look at China’s drone sector. Shenzhen-based DJI supplies a whopping 70% of the global drone market. For approximately $2,500, a DJI Mavic-3 Pro, the favorite of front-line troops, flies an average of 3 sorties before succumbing to Russian fire or jamming, leading to a monthly consumption of about 10,000 drones. China's expansive drone ban encompasses almost all variants in the Ukrainian arsenal.
Drone factories throughout Ukraine – like the Kyiv factory where one of us works– have been ramping up production all summer. This trend is part of a broader push in military manufacturing because Ukrainians fear that Western aid could falter. Ukraine’s new Ministry of Strategic Industries, reminiscent of WW2 Britain’s Ministry for Aircraft Production, is investing, incentivizing, and innovating to drive Ukraine’s defense sector into the future.
Ukrainian firms produce everything from large suicide drones to tiny surveillance drones. Today, over 40 firms, up from fewer than 12 a year ago, field over 20 operational drone products. With labor cheap and western capital risk-averse, most drones built in Ukraine are hand-assembled, often by young women. It is unclear how many drones Ukraine can produce per month, but it is nowhere near 10,000 per month.
To plug Ukraine’s impending gap, one theory suggests U.S. firms follow China’s lead and build low-cost, commodity hardware at extraordinary scale. That theory is tempting but wrong.
First, history proves American firms win when they focus on areas of asymmetric advantage. Readers over the age of 30 remember Nokia’s dominant position atop the global cellular phone industry. To beat Nokia, Apple did not make a better flip phone. Apple developed a software-first solution – the iPhone – that made phones more capable and easier to use, massively expanding the market. What worked for phones will work for drones. America’s asymmetric advantage in software and AI is redefining what drones can do, transforming and expanding the market--and paving the way for the future of autonomous flight. American companies are attempting to prove that thesis with drones of all sizes.
Second, smarter, more secure drones are more resilient to jamming. Some American drones can perform three times as many sorties as DJI drones in contested environments, increasing combat effectiveness and reducing the risk and expense of resupply missions. When the number of sorties goes up, the cost per sortie goes down. If American solutions prove their mettle, the total cost of ownership is compelling, even if the upfront cost is higher. This is the new math of great power conflict: cost per sortie beats cost per unit. With formal training rare and new conscripts forming fresh brigades, Ukrainian commanders would welcome drones that can survive more missions.
Until DJI’s dominance on the front-line in Ukraine fades, it will be difficult to ascertain whether Ukrainian production, western industry, or an entirely different solution will supply Ukraine’s warfighters with expendable drones. For now, nimble startups in the West should look at China’s export ban as an opportunity. They can grow their business, innovate with battlefield data, and help Ukraine’s freedom fighters. Washington should increase purchases of U.S.-built drones to help Kyiv bridge the gap left by DJI in the short term.
Beyond helping Ukraine buy the weapons, policymakers should focus on helping U.S. firms to establish a stronger foothold in the drone market dominated by China. With political support for arming Ukraine weakening, but support for industrial policy strong, this approach will remain sustainable. Serious legislation, such as the Increasing Competitiveness for American Drones Act of 2023, exists. So do serious programs, such as the Pentagon’s newly announced Replicator initiative, designed to rapidly field attritable, autonomous systems. It’s time for U.S. leaders to strengthen American industry that can help Kyiv now and Washington later.
Bipartisan lawmakers have embraced efforts to restrict PRC drones used by government agencies. That is a sensible tool, but too often the discourse stops there. The U.S., like Ukraine, needs a holistic strategy. The campaign to counter PRC telecom company Huawei included product restrictions, but also featured a global diplomatic push to address the threat and promote alternatives, combined with targeted measures to support a smooth transition. The end-state of a Huawei-like effort in the drone industry could protect western governments from espionage and create market conditions where trustworthy western firms thrive.
As front-line units use up the last DJI drones, clues about the Mavic’s replacement should appear by late September. For now, the race is on.
