China’s drone production capacity is a significant multiple of that of the U.S.
Investing.com -- China’s drone production capacity is a significant multiple of that of the U.S., Morgan Stanley revealed in a recent note, highlighting the scale gap emerging as drones reshape modern warfare and commercial markets.
The Wall Street firm says recent military campaigns have shown how inexpensive unmanned aircraft have “changed the landscape of the battlefield in a profound way.”
In a recent interview with Reuters, U.S. Army Secretary Daniel Driscoll revealed that U.S. Army plans to buy at least one million drones over the next two to three years, with annual purchases rising to the “half a million to millions” range thereafter.
This represents a steep jump from about 50,000 units today and reflects lessons from the Russia-Ukraine war about the growing relevance of low-cost drones.
However, Morgan Stanley analyst Adam Jonas questions whether the U.S. industrial base can meet the demand at such scale, especially as China already “reportedly can produce millions of drones per year.”
Industry executives, including Tesla’s Elon Musk, have repeatedly warned about the lack of a robust U.S. supply chain for motors, circuit boards and rare earth components.
China’s dominance extends beyond volume. Shenzhen-based DJI remains the world’s largest commercial and consumer drone maker, holding roughly 70% of the market.
The company continues to release new high-specification, low-cost devices, such as the recently unveiled NEO 2, which offers 4K video, omnidirectional vision and forward LiDAR for about $209.
This comes as the U.S. prepares to restrict DJI imports starting December 23 unless national-security agencies issue specific clearances.
Western manufacturers exist, but Jonas and his team note they are “not aware of any non-Chinese company producing commercial/consumer drones at a scale anywhere comparable to DJI.”
“Someone will need to step up if the U.S. wants to compete,” they added.
Morgan Stanley also highlights China’s technological leadership through public demonstrations, including a synchronized drone show in Liuyang using nearly 16,000 units operating in a mesh network.
The bank expects 2026 to draw more attention to AI-enabled drones and low-altitude robotic systems as advances in autonomous vision technology accelerate.
While capability remains a focus in the defense sector, the analysts stress that the U.S. deficit sits primarily in the lower-end, high-volume segment—areas that resemble consumer electronics manufacturing rather than traditional defense production.
