Reshoring drone component manufacturing: Strengthening the U.S. defense supply chain

China has long held the lead when it comes to manufacturing drones and their components but due to the current geopolitical climate, the United States will need to increase its workload for drone components to keep pace with political rivals.

That puts Allan Evans in a perfect position to help as he spent years in the Chinese drone market overseas and is ready to bring the best practices back to the U.S. with his company Unusual Machines. There are some obstacles to overcome when reshoring production as Evans had to make sure he had time, money, and a market. One of the first moves Unusual Machines made was to purchase Rotor Riot, a drone-focused e-commerce marketplace. Then the U.S. government banned the sale of new drones from several Chinese manufacturers in late 2024 which sped up the time aspect of the equation for Unusual Machines. The buzz surrounding the impending ban, however, provided motivation for investors to come on board with Unusual Machines as they were able to raise enough money to begin production.

That’s when Evans noticed a gap in the American drone market; there are high-value premium drone part companies in the U.S., but nobody was really working in the consumer entry level market where Chinese drone companies have thrived. The first components Unusual Machines began working on were electronics because Evans knew production domestically had increased and become heavily automated after the CHIPS and Science Act was implemented. They went to work designing high quality components that were still affordable.

"We didn’t think our consumers would be willing to buy for more than a 20% premium over China, we knew we would have to be a drop-in replacement,” Evans says. “They’re not going to want to diversify their supply chain unless they can take our part and put it where the other part is and have it work the same way at roughly the same price.”

Unusual Machines’ next step was to work into the defense drone component market, so they had to get the Defense Innovation Unit’s approval to be added to the Blue UAS Cleared List (Blue List) and Blue Framework, a list of approved manufacturers and components for the U.S. defense drone supply chain. Their first components were audited, approved, and added to the Blue List in September 2024 and they promptly sold 8,000 components to a UK company. They’ve subsequently added more components to the Blue List and are ready to expand their manufacturing.

Drone motors are the next frontier for Unusual Machines as they’re in the process of opening a 17,000ft2 facility near Orlando, Florida. They’re working with their international motor partners from the consumer side of the business to replicate the machining and designs done in the partners’ motor factories and bring those same machines and technologies to the new Unusual Machines facility.

“We’re bringing in all the machines now to build high end drone motors, that’s the next giant gap in the marketplace,” Evans says. “There’s nobody really doing low-cost, high-performance motors in the U.S.”

Drone components, including motors, are all Unusual Machines is focusing on right now as they don’t plan to enter the completed drone market.

“One of the things I always believed in is don’t compete with your customers, there are a lot of great companies trying to do the drone, there are many fewer companies trying to do the parts to enable those companies to do the drone,” Evans says. “The drones must be built in the U.S.; that’s the end product slice. The next slice down is critical subcomponents and parts, that’s where we are. The third slice is the pieces going into those critical subcomponents and parts, such as rare earth magnets. Slice four is the raw material, the copper, steel, etc.”

Unusual Machines also doesn’t see government contracts; the drone companies deal directly with the Department of Defense (DOD) and subcontract to Unusual Machines for their components and parts. Most parts on a civilian or military drone are the same. The specific DOD contracted parts are handled by other companies since Unusual Machines doesn’t hold International Traffic in Arms Regulations (ITAR) clearance.

Looking into the future, Evans sees a great opportunity for replacing the current consumer and law enforcement drones and components in the U.S. market.

“Because of the conflict in Ukraine, I think in a lot of people’s perceptions drones have gone from toys to tools,” Evans says. “Right now, there’s a million drones being used in the U.S. People know what they want to use it for. Police use it to respond to incidents. There are companies doing window washing with drones. I know people who run cattle ranches and who use drones to go find where the cattle are at night when they wander off, so the market is already there, but pretty much everybody in the market is Chinese.”

Unusual Machines
https://www.unusualmachines.com