By Leslie Hayward, Senior Vice President of Communications, SAFE and Rachel McCleery, Executive Director, SAFE’s Coalition for Reimagined Mobility
Two words: demand and scale.
- Forthcoming federal action will impact how commercial drones are used, and whether operators can use them to their full potential, or if they’ll be kept on a short leash
- Drone policies of today carry important lessons for revitalizing and expanding America’s industrial base
The Federal Aviation Administration (FAA) is working to release its final rule regulating how unmanned aircraft operate beyond the operator’s visual line of sight (BVLOS). For those of us with energy, mineral security, or automotive policy backgrounds, our eyes will glaze at this unfamiliar industry and we’ll scroll right along. But what’s worth understanding is how this rule matters for our defense industrial base, battery manufacturing, and supply security of advanced weaponry—and the parallels to some of the other pain points in our national effort to reindustrialize. SAFE seeks to mitigate crippling dependencies and restore industrial capability where possible, and sometimes that takes us deep in the policy weeds. For the sake of this piece, we’re going to focus at a very high level on drones.
Let’s start with first principles. SAFE’s organizational philosophy is that for our national and economic security, we cannot depend on adversaries for essential inputs including energy generation and energy use, resources (critical minerals, metals, etc) and other advanced technologies (semiconductors, drones, autonomous vehicles, etc). This core philosophy is shared by those who take national security seriously on both sides of the aisle.
The problem: Today, most commercial drones must remain within the operator’s line of sight, preventing drones from delivering on some of their most valuable applications. This includes things like monitoring energy infrastructure, modernizing agriculture, and time-critical deliveries (think organ transplants, not your DoorDash burrito). Operators can apply for waivers to fly farther, but the volume of wavier applications far exceeds the FAA’s ability to process them—creating an unworkable bottleneck and a patchwork system that limits scale and planned investment. Beyond-visual-line-of-sight (BVLOS) approvals jumped from 1,229 in 2020 to 26,870 in 2023, a twenty-two-fold increase in three years, according to a federal audit cited in ReMo’s BVLOS research. Some individual waivers take the better part of a year and cost operators upwards of $100,000 to obtain.
To put it in Taylor Swift terms: handing an operator a capable, BVLOS-ready drone under today’s rules is like “driving a new Maserati down a dead-end street.” All that horsepower, nowhere to go.
Where we are now: The FAA’s first attempt at a permanent fix was too restrictive to solve the problem. Rigid constraints and a case-by-case waiver system proved too conservative to scale drone operations or provide a strong signal to operators to invest in the ecosystem. SAFE’s Coalition for Reimagined Mobility (ReMo) spent the past year interviewing twenty companies and agencies, from electric utilities to police departments to organ-transport consortiums, and published a framework for what a workable version of the rule should look like.
This brings us to the part of this story that connects to the defense industrial base—and to why this matters even if you have never once thought about drones.
Why it matters: Demand and scale. Industrial capacity only materializes if there’s enough buyers to justify building the factory, in volumes predictable enough to entice investors. Right now, the United States doesn’t have a domestic drone industrial base with anything like that kind of demand behind it. Before administrative actions that banned foreign-made drones and components, Chinese manufacturers accounted for roughly 95% of the U.S. consumer drone market. Shenzhen alone is home to more than 1,700 drone and drone-component companies, generating an estimated $13 billion a year in output. And drones are downstream of a mineral supply chain—batteries, motors, magnets—that China also dominates.
Meanwhile, the U.S. commercial drone fleet is projected to cross one million aircraft by 2027, and the global unmanned aerial vehicle (UAV) market is expected to grow from roughly $26 billion to more than $40 billion by 2030. That’s real demand, and it’s only increasing. A workable BVLOS framework is necessary to create the opportunity for some of that demand to be served by U.S. manufacturers scaling up to meet it, or by imports. A workable rule changes the underlying economics directly: Our research found that a single drone delivery can cost around $13.50 today when every aircraft needs a dedicated human minder. A rule allowing one remote pilot to oversee a whole fleet could push that down toward $2.00 per delivery. It’s the kind of cost curve that turns a bespoke business into an economy of scale.
For defense applications, the Army’s own drone production ambitions make the same point from the other direction. The Army has said it wants a facility capable of producing upward of 10,000 small drones a month by the end of 2026, with legislation on the table that envisions scaling to as many as one million units a year once fully built out. That is still low compared to the five million plus that Ukraine produced this year itself, changing the nature of warfare as we know it. To be clear, those are enormous numbers for a defense-only production line to hit on its own. Absent an existential and urgent defense need (as is the case in Ukraine) no single branch of government, on its own, generates enough steady demand to build and sustain a mass-manufacturing base. The U.S. and other advanced economies need a sustainable commercial market underneath, humming along at scale, that can flex to meet a surge when the Pentagon needs one.
We’ve watched this exact dynamic play out in other sectors, and it rarely ends well when we get it backwards.
Take shipbuilding. The United States allowed its commercial shipbuilding industry shrink considerably over the past several decades, and naval shipbuilding atrophied right along with it. The result, according to a widely cited Navy intelligence assessment, is that China’s shipbuilding capacity is now estimated at more than 200 times that of the United States. That gap didn’t open up because Chinese engineers are 200 times better at building ships. It opened up because China built a commercial shipbuilding industry with real demand behind it, and let that scale feed its naval yards, while the U.S. up until recently tried to sustain shipbuilding capacity on defense orders alone.
Or go back further to the example most people might remember from history class: World War II’s “Arsenal of Democracy.” Ford’s Willow Run plant, at peak production, turned out a B-24 Liberator bomber every hour. General Motors built more than 800,000 military vehicles, plus engines and machine guns. Chrysler converted a factory into the Detroit Arsenal Tank Plant and built the M4 Shermans that helped win the war in Europe. None of that was possible because Ford, GM, and Chrysler kept idle tank-building capacity around just in case. It was possible because the United States already had the largest, most efficient commercial automobile manufacturing base in the world, built on decades of consumer demand, and converted it at speed when the moment demanded it. It’s not lost on us that, as of this spring, the Pentagon has reportedly opened early conversations with GM and Ford about doing a modern version of exactly this. History has a way of rhyming.
To put it in Game of Thrones terms: drones aren’t unlike dragons. While somewhat less spectacular, they are capable of changing the outcome of a fight all of their own, but also expensive to feed and maintain (dragons as individuals, drones as an industry). A drone policy that keeps commercial operators tethered to what they can see with their own eyes is a dragon chained up under Meereen: Impressive, and not doing anyone a bit of good.
The post The energy and industrial security argument for why drone deployment policy matters appeared first on The Fuse.
