Cloud of Anxiety and Uncertainty Hangs over the U.S. Commercial Drone Industry

A series of regulatory developments have combined to create a dark cloud of confusion and uncertainty over the future of commercial and public service drone operations in the U.S.

The U.S. Federal Communications Commission’s (FCC) late 2025 Covered List determination banning the use of future models of foreign-made drones and supporting equipment surprised the UAV sector with its scope. The measure came on the heels of the FAA's August 2025 Part 108 Notice of Proposed Rulemaking (NPRM) on BVLOS flights that left UAV operators with serious concerns about the industry’s future. 

U.S. drone operators nervously await the FAA’s final BVLOS rule, with wide agreement that the industry’s future will be jeopardized unless the agency heeds public comments and makes significant changes from the draft proposal.

Hovering over everything is the future viability of Chinese firm Da-Jiang Innovations’ (DJI) widely used UAVs in the U.S. market.

The FCC action was issued just as the 2023 American Security Drone Act’s ban on using U.S. government funds to buy or operate DJI drones came into effect, a blow to many state and local agencies with UAV programs at least partly dependent on federal money.

While DJI and users of its equipment can take solace that the FCC ban still allows current and already-approved models to be operated, many of the company’s drones continue to be stopped at the U.S. border under the Uyghur Forced Labor Prevention Act (ULFPA), limiting access to the equipment. According to Pilot Institute, U.S. Customs and Border Protection (CBP) “blocked most shipments of DJI equipment” in 2025.

“It’s a multi-front attack” on the viability of the U.S. commercial and public service drone sector, Vic Moss, the CEO of the Drone Service Providers Alliance (DSPA), told Commercial UAV News. The U.S. government is pursuing several avenues to ban or limit DJI drones, he said.

The federal government is “really pushing the narrative that DJI drones are dangerous,” Moss explained. “That they're spying on us … It's a lack of common sense, and logic is critically absent. It's dangerously absent from the discussion. And so what we're seeing is this multi-pronged approach to say, ‘China bad, USA good’ when it comes to drones, and it's just not the case across the board.”

The prevalence of DJI drones in the U.S. cannot be overstated. According to a Pilot Institute survey of 8,056 drone operators across industry on a potential DJI ban (released in late 2025, but conducted prior to the FCC ruling), 70 percent operate fleets that are comprised of 100 percent DJI UAVs, with 85 percent having fleets made up of at least three-quarters DJI drones. Only three percent of public safety agencies with drone programs have no DJI UAVs in their fleet.

“These restrictive drone policies adopted by the United States will have a devastating impact on the life-saving work done by American public safety agencies and the livelihoods of thousands of small business owners,” DJI Head of Global Policy Adam Welsh told Commercial UAV News.

“This cuts across all industries, from agriculture and energy to real estate and construction.”

DJI has filed a lawsuit in U.S. federal court to challenge its inclusion on the FCC’s Covered List.

The Chinese firm said the importation of even existing models and equipment is being “severely” restricted, let alone the threat to future models.

Border Interference

Moss said it has already become quite difficult for U.S. drone operators to get DJI equipment. “It gets stuck in customs or held in customs and not allowed in,” he said. CBP has never publicly commented on this issue, but the ULFPA is the justification given to drone importers for delaying or stopping DJI’s UAVs’ importation into the U.S.

The Pilot Institute study found that 41.8 percent of respondents were “unable to purchase a specific DJI model I wanted” in 2025; 33.3 percent "could not get needed parts or accessories”; and 21.6 percent “had a DJI drone order delayed significantly.”

Moss said U.S. customers trying to buy DJI drones are often told the equipment they want is out of stock. “You use a VPN and tell them you're in Canada, it's all in stock,” he said. “This is not a viable business model. DJI just can't sell in the United States anymore … It’s having a huge effect right now on U.S. retailers—especially smaller retailers—that sell DJI drones. Because they don't have stock to sell, they can't pay their employees, and they’ve got to lay their employees off.”

Welsh emphasized that “DJI is not listed as an entity under the UFLPA. Any allegations that DJI is in violation of the UFLPA are entirely unfounded and categorically false.” He said the company does all of its manufacturing “in Shenzhen, where our company is headquartered, or in Malaysia.”

Welsh said DJI will “continue to innovate its advanced drone technology and applications around the world.”

Regarding the myriad of issues confronting DJI’s access to the U.S. market, he said “we understand the concern among U.S. operators on how they will continue their work right now. That said, DJI remains committed to our U.S.-based operators and will continue to advocate for them and explore all options to provide the products they need.”

The Pilot Institute survey found that 43.4 percent of respondents said if they lose access to DJI drones, it would have an “extremely negative/potentially business-ending impact.” The Pilot Institute added: “Most respondents said a DJI ban would reduce operations, increase costs or reduce future investments [in UAVs].”

U.S. Manufacturing

But voices connected to U.S. drone manufacturers push back, saying a U.S. manufacturing base can be built up to supply the needs of U.S. UAV operators, especially if the federal government provides incentives. They argue that DJI’s huge presence has squeezed out U.S. manufacturers in the domestic market who will now be able to steadily gain market share and fill the void.

“Chinese companies [including DJI] had significant state-backed subsidies to allow them to flood the U.S. market with subsidized [UAV] products that then drove U.S. [drone manufacturing] companies out of business,” Michael Robbins, president and CEO of the Association for Uncrewed Vehicle Systems International (AUVSI), told Commercial UAV News. “For the U.S. companies that were able to stay in business, it ensured their market cap remained very small. Obviously, economies of scale were not achieved. And then you can't achieve economies of scale in production and your prices tend to be much higher.”

Blocking DJI from the U.S. market will provide “more opportunity for American companies,” he said.

Bill Irby, CEO of U.S. drone manufacturer EagleNXT, said there are an “extensive” number of companies in the US producing drones. But they generally produce small numbers of UAVs annually—EagleNXT builds around 250 drones a year—and have been hard pressed to scale with DJI controlling so much of the market.

“I think in total the drone manufacturing base in the U.S. is fairly large,” Irby told Commercial UAV News. “What I believe you’re going to see happen is some of these manufacturers—what I'll call startups or mom and pop shops—we're going to see consolidation of the industry in terms of companies buying each other, and that's going to happen over the next two to three years. Some of it has already begun. We have interests ourselves in acquiring.

“But the key thing is who can build and sustain a production capacity, who can produce the drones that meet the reliability expectations of the operators. I think that's what's going to drive things. But I don't see a problem with the U.S. industry at large scaling, but it's who's going to be successful in the scaling that will be the challenge.”

EagleNXT in January opened a new headquarters in Allen, Texas. While it will continue to build drones in Switzerland—where its current production lines are located—”initiatives are already underway to set up production lines at the facility for the manufacture of  …. EagleNXT’s first-ever U.S. production line for the company’s eBee VISION drone,” according to EagleNXT’s statement when it opened the new headquarters. “The production line in Texas will complement the existing drone production line at the company’s facility in Switzerland.”

As production capacity is developed in Allen and U.S. demand grows, “we can easily, easily, easily multiply [the current 250 drone annual production rate] by five or six,” Irby said.

Robbins said “carrots” provided by the federal government will be critical to jumpstarting the U.S. drone manufacturing base. “The key to driving this kind of domestic production is having some [government] incentives that will help companies break ground and get going,” he explained. “Without that, it's going to take significantly longer because with market economics it will take time to raise money.”

But drone manufacturing production facilities in the U.S. likely cannot be successful if the FCC’s Covered List ban on all foreign drones and parts is fully enforced. The globalization of supply chains means a large number of components will have to be imported to build UAVs in the U.S.

Closely watched is the provision in the FCC Covered List finding that the U.S. Departments of Defense (DOD) and Homeland Security (DHS) can make a “specific determination to the FCC that a given UAS critical component does not pose” an unacceptable security risk.

There is “a future where the U.S. can support itself with drone production, which I think is widely recognized as important to U.S. national security, and that is certainly one of the objectives of the FCC action,” Robbins said. “It will take time, and that's why we're working with the FCC and the [DOD] and the White House on ensuring that there is a very smooth and pragmatic process for waivers [for components], so that while that domestic supply chain is being built up and becoming more resilient, we have the ability to continue working with our allies.”

Irby said EagleNXT has had “partnerships in place with several friendly countries for many, many years. I don't see any reason why those partnerships have to be broken.” He expressed confidence the company’s drones being manufactured in Switzerland will still be able to be imported into the U.S. without issue.

Robbins added that “the intent is obviously to have more of the components built domestically, but that's going to take time. It's not something that can happen overnight. You've got to have a demand signal. You've got to have companies raise money … and then they have to actually put shovels in the ground and build or expand manufacturing facilities. They build a workforce and then actually engage in the manufacturing process. All that takes time. And one of the things that we'll be working on in 2026 very aggressively is trying to ensure there are some economic incentives” from the U.S. government.

BVLOS Jitters

Of course, access to drones will not matter for many operators if BVLOS flights cannot be viably flown under a final Part 108 rule. “We talked to our members and we asked, ‘Could you continue your operations that you're doing today under Part 108 [if the NPRM is not changed]?’ And the vast, vast majority said no,” Commercial Drone Alliance CEO Lisa Ellman told Commercial UAV News last year after the NPRM was issued.

Robbins, citing meetings with high level U.S. Department of Transportation (DOT) and FAA officials, said he believes the industry’s concerns over the Part 108 NPRM are being taken seriously.

“I've met personally with [DOT] Secretary Sean Duffy and FAA Administrator Bryan Bedford,” he said. “Our team took part in a listening session last month with the FAA on [Part 108] and there definitely is recognition that the draft rule didn't get it quite right, and that there are some challenges with the draft rule that need to be addressed before the final rule is published. All signs point to them taking that very seriously and working to address the challenges in a way that will ensure the final rule is forward looking and allows for risk-based [BVLOS] operations to proceed … So I feel good about those engagements, but we won't know until we see the final rule, obviously, but I have confidence in the FAA and DOT.”

Irby said he believes two of the biggest concerns with the NPRM—that it would eliminate manually-piloted BVLOS UAV flying and that the U.S. Transportation Security Administration (TSA) will impose overly restrictive rules—will be ironed out.

“On the manual piloting versus autonomy, if you put it in the context of current manned aircraft, both modes are used today, right? There are autopilots on aircraft and there is manual flight that provides full manual control of the aircraft,” he said. “Both are relevant. Both should still be relevant in the drone market. It's all about the guidelines that are applied. There's no reason that a drone shouldn't be able to operate autonomously within certain boundaries and restrictions on airspace. Same thing from a manual operating standpoint … So I think both are applicable, and both should stay open for operations in the UAS space.”

Irby added that commercial drone security should be approached similarly to manned aviation. “The way I look at it is there should be some regulation, but why would it be any different than what manned pilots have to go through today,” he said, noting it does not “bother me whether it's TSA or some other organization” enforcing UAV security as long as it is done reasonably.

“There obviously are negative uses of these systems that are possible,” Irby said. “There are threats out there, just like there are with manned aircraft. So I think it's perfectly reasonable to have some sort of security check involved. Whether TSA is the right agency or not is subject to question.”

Irby believes the Part 108 NPRM overall was a positive development. “And I think a lot of [the concerns] we’ll get resolved through the comments and negotiation period before the final rule is published,” he said.

Robbins predicted the final BVLOS rule will arrive sometime in 2026. “I think we're going to see a rule this year,” he said. “I am in favor of it being done properly, rather than done just for speed. So if it means the FAA takes a couple of extra weeks or maybe a couple extra months, but gives us a rule that works well for the industry, versus going really fast and coming out with a rule that's actually problematic for the industry, then obviously the former is going to be our preference.”

Concern over Part 108, the FCC Covered List and ULFPA each on its own would provide anxiety for U.S. commercial and public service drone operators, but the combination creates a real lack of clarity about the industry’s future. Moss said the negative consequences feared by the industry have begun to be realized and are not theoretical.

“We’ve already seen it,” he explained. “We're seeing people not going into the industry. We're seeing a drop in the number of remote pilot certificates being issued. We're seeing a drop in the number of people studying and getting their Part 107 license.”

Moss added that DSPA’s Facebook group has 33,000 members “and we see questions all the time. It's like, what does all this mean? Should I even bother? Should I just sell my stuff? I know people who are getting out of the business because it's just not worth the fight anymore to them. So we're already seeing the repercussions from the FCC. We're seeing the repercussions from CBP and the American Security Drone Act … Search and rescue, first responders, all those folks, are going to be hit the hardest. And then, in turn, the American public will be hit hard because these drones are used to save American lives weekly, if not daily. [Public safety agencies] are not going to be able to replace [the DJI drones] they've got.”