U.S. drone laws needed to spur innovation

Former Redcat COO Alan Evans has advocated for CHIPS-like incentives to accelerate domestic drone manufacturing and reduce reliance on Chinese technology.

Editor's note: Today, June 26, 2024, the House Select Committee on the Communist Party of China is scheduled to hear testimony on Chinese subsidies in the drone, semiconductor, steel, and shipbuilding industries. Adam Bly, CEO of U.S. drone manufacturer Skydio, is among the experts scheduled to testify before the committee.

Jim McGill, Features Editor, DRONELIFE

As the U.S. government considers measures to restrict imports of Chinese-made drones, it should also consider passing legislation to encourage domestic drone makers to innovate their products, a former chief operating officer of U.S. drone company Redcat Holdings said in an interview.

Alan Evans, CEO of Unusual Machines

“With the US government moving to remove (China's) DJI imports from the market, without additional measures to accelerate or reinvigorate domestic manufacturing, it will take a very long time to reach parity and will require further investment in future,” Alan Evans said.

Evans, who is now CEO of aviation parts manufacturer Unusual Machines, said he thinks Congress should pass legislation similar to the CHIPS Act, which provides incentives to U.S. microchip manufacturers, to support a domestic drone industry.

In 2022, U.S. regulators banned the sale and import of new telecommunications equipment from Chinese technology companies, including Huawei and ZTE, citing national security concerns. That same year, Congress also passed the Creating Beneficial Incentives for Semiconductor Manufacturing (CHIPS) and Science Act, allocating $53 billion in federal incentives for domestic semiconductor research, development, and manufacturing.

Congress is currently considering several bills aimed at restricting or reducing imports of Chinese-made drones, including the Countering China Communist Party Drones Act and the Emergency Medical Services Drones Act, both introduced by Rep. Elise Stefanik (R-NY). The Countering China Communist Party Drones Act would place equipment and services made by DJI Technologies on a federal communications list deemed to pose an unacceptable risk to U.S. national security.

The Drones for Emergency Workers Act would impose new tariffs on Chinese-made drones and establish a new subsidy program to use the tariff revenues to help emergency workers, critical infrastructure providers, and farmers purchase new non-Chinese-made drones.

Drones: A key technology

Evans said both Republicans and Democrats see drones as a critical technology, and that the Ukraine war has shown that small unmanned aerial vehicles are highly adaptable in combat, warning lawmakers in both parties about the potential dangers of relying too heavily on drones made in countries that are not aligned with U.S. interests, he said.

“I think everyone in Congress and the Pentagon thought, 'Oh, we need to be able to build this ourselves,'” he said.

In addition to the drones themselves, most of the materials and components for the small unmanned aircraft flying around the world are also imported from China.

This even extends to motors, almost all of which come from a Chinese company called T-Motors, most of the plastics come from China, and all of these companies now make and sell a ton of material in Ukraine and Russia.

Of the drone-related federal bills proposed in the current Congress, Evans said he favors the approach of the Drones for First Responders Act, which would impose tariffs that would make Chinese-made drones more expensive and discourage U.S. consumers from buying them, while using revenue from those same tariffs to provide incentives for consumers to buy U.S.-made drones.

The Importance of American Manufacturing

Evans said any legislation enacted to encourage the growth of the U.S. drone industry should focus on two main areas of incentives: research and manufacturing. Currently, the Department of Defense is dedicating a lot of resources to promoting drone-related research.

Another thing we don't have is manufacturing. Large-scale manufacturing takes a lot of time and takes a lot of building factories, he said. In the CHIPS Act, we actually subsidize the building of factories.

Subsidies to encourage growth in the U.S. drone industry could help domestic drone makers catch up with industry leader DJI within three to five years. Without such subsidies, it would take the U.S. drone industry seven to 10 years to catch up with Chinese competitors, even if currently proposed anti-China drone bills pass, he said.

China has taken a step towards becoming a technology powerhouse.

Evans said the United States should follow China's example in its efforts to boost a domestic drone industry.

In the late '90s, companies like Google and Facebook were coming to China, but China shut them all out. It was called the Great Firewall, and that allowed domestic companies like Tencent, Baidu and Alibaba to grow in their own markets, he said. These Chinese tech companies are now some of the biggest in the world.

No US lawmakers have yet proposed a bill like the one Evans envisions, and he said the presidential election year is unlikely to change that. He said it's more likely that Congress will pass some form of anti-Chinese drone legislation this session and then lawmakers will realize, “Oh, we didn't do that over there.”

“My guess is it'll show up in the next cycle,” he said. “Next summer, people will panic and this phenomenon will show up and people will talk about it.”

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