Identifying Gaps in America’s Drone Supply Chain
Building a Secure U.S. Drone Supply Chain
At SES.AI’s Massachusetts facility, the challenge of establishing a secure U.S. drone supply chain is evident. The company is developing batteries for applications where weight, performance, and reliability are critical. In the office of founder and CEO Dr. Qichao Hu, a small metal box symbolizes the future of battery technology.
This box provides access to SES.AI’s “Molecular Universe,” a database that maps approximately 100 million molecules with potential applications in battery development. This vast range of materials contrasts sharply with the limited options traditionally explored in the battery industry.
SES.AI’s operations highlight a significant challenge facing the U.S. drone industry: the need to build and scale the battery and critical component ecosystem necessary to support domestic drone production.
The Ecosystem Behind Drone Manufacturing
U.S. drone policy increasingly focuses on secure supply chains and reducing reliance on Chinese components. However, simply replacing foreign-made drones with U.S.-made alternatives does not address the entire issue. Each drone relies on a complex ecosystem of batteries, motors, electronics, sensors, and other components, making the rebuilding of this ecosystem a complex task.
Dr. Hu explains that the U.S. has lost much of its battery manufacturing expertise over the decades, first moving to Japan, then South Korea, and finally China. As U.S. drone manufacturers seek alternatives to Chinese sourcing, they are turning to allies with the necessary capabilities. SES.AI’s manufacturing facility in Chungju, South Korea, exemplifies this, as it is part of a network of manufacturers supported by a skilled workforce and suppliers.
While factories can be established relatively quickly, recreating a network of experienced workers and specialized knowledge is a more prolonged process. This need for alternatives is becoming increasingly urgent for the U.S. drone industry.
Shifts in Focus: From Drones to Electric Vehicles
SES.AI has been involved in drone technology since 2018, focusing on high energy density and lightweight batteries suitable for aviation applications. However, the market shifted during the COVID-19 pandemic, leading to increased investment in electric vehicles (EVs). This shift prompted SES.AI to redirect its focus toward the automotive sector, where battery energy density is crucial for vehicle range.
Despite this shift, drones have returned to being one of SES.AI’s primary focus areas as the market continues to grow. The experience gained from working with automotive manufacturers, who impose stricter quality standards, is now being applied to drone battery production. SES.AI has also been collaborating with GM Defense to develop secure sourcing capabilities.
Policy Changes and Their Impact
The evolving U.S. policy landscape has created new urgency for drone manufacturers. Many companies previously hesitated to make significant sourcing changes due to uncertainty in federal policy. However, as regulations regarding Chinese drones and components have become clearer, the need for compliant alternatives has intensified.
While policy changes can stimulate demand for domestic products, they cannot alone create the necessary manufacturing capacity. Companies must also develop compliant components and produce them at scale.
The Importance of Battery Technology for Drones
In the context of drones, battery performance is critical. Every gram allocated to the battery reduces the weight available for payloads such as cameras or medical supplies. Dr. Hu emphasizes that higher energy density batteries can significantly enhance drone capabilities, allowing for longer flight times or increased payloads.
However, discovering materials that can deliver these improvements is a substantial challenge. SES.AI’s innovative approach involves leveraging artificial intelligence to explore a vast array of potential battery materials, significantly speeding up the discovery process.
Challenges in Scaling Production
While identifying better materials is essential, manufacturing them at scale remains a significant hurdle. SES.AI currently has the capacity to produce about one million battery cells annually in South Korea, which is insufficient to meet anticipated demand. The company plans to expand its production capacity to accommodate U.S. and European drone customers.
Despite these efforts, the potential demand for batteries could be nearly 100 times greater than current production capabilities. SES.AI is exploring additional manufacturing capacity in Japan and Malaysia to address this gap.
The disparity between available production and potential demand highlights a broader challenge for the U.S. drone industry. While American companies can design and assemble drones domestically, they require a robust supply of batteries and critical components that current secure supply chains may not yet provide.
As the U.S. drone industry continues to expand, the development of a comprehensive component ecosystem will be as crucial as the construction of new aircraft.