Global drone leader DJI has come under increasingly intense pressure in the US, as successive federal and state measures banning its craft for official use have proliferated amid worsening relations with China – and accompanying security concerns. Though accusations by politicians that DJI UAVs leak data to Chinese authorities have never been substantiated – and flatly denied by the company – the blacklisting has reportedly undermined the firm’s former 70%-plus US market share down to what some estimates say is closer to half now.
With the draft Countering CCP Drones Act seeking to effectively block operation of DJI drones by all US users now starting to clear House of Representatives subcommittees, DroneDJ spoke to DJI head of global policy Adam Welsh about the blacklisting drive, its effects on the company, and its threat to client use.
The US federal and state blacklisting of DJI drones has accelerated over time. How has that affected DJI’s US business and market share?
DJI has a longstanding policy of not commenting on market share or sales numbers. What I can say is that DJI continues to grow despite the political headwinds. This is because of the quality of our products and because our users understand how our products work and that their data is in fact secure.
Enterprise customers in particular already operate under their own corporate security and safety guidelines. They have told us that our products – through features like Local Data Mode and Offline Update – meet their operational requirements. The political rhetoric definitely makes their jobs harder, but they are able to use our products as they have control over how their drones are deployed and how their data is managed and stored.
But the bans and rhetoric behind them must have considerably hurt DJI’s US business position.
The current politically charged atmosphere has made it challenging to have balanced conversations with certain media and government bodies. But sadly, it is not DJI that is being hurt the most.
The lobbying campaign by our competitors to ban DJI has had an increasingly negative impact on the drone community. It has sown a lot of confusion among operators and has wasted public taxpayer funds due to sudden mandates to ground drone fleets.
An alliance of drone service providers in the US. surveyed their members and two-thirds said they would go out of business without access to drones like ours. Combine that with the economic impact that the use of DJI products alone has in the US, which was estimated at $116 billion in 2023, and you can see that our competitors are pursuing a reckless strategy.
How much of this, in DJI’s view, is based on legitimate worries about China’s documented and unrelenting spying activities, and how much is political reaction justifying protectionism? The security threat from China is real…
If it was based on security concerns, why won’t anyone sit down with DJI as the market leader and discuss mitigations we could undertake to satisfy those? Why, when the American Security Drones Act passed last year, were intelligence agencies, the Department of Justice, and Homeland Security, exempted so that they can buy DJI ? But why does the Department of Agriculture need to seek a waiver? Is that about security? No.
It is about an atmosphere in which you only have to say the word “China” to get everyone riled up. And it is about US competitors taking advantage of that atmosphere to lobby for our removal from the market. To be clear: DJI supports the growth of local drone manufacturing and the development of the US drone ecosystem. Innovation and competition go hand in hand. We are calling for free and open markets that were once at the very heart of American policy.
Critics legitimately note that China’s government spying activity – often using laws obliging Chinese companies to abet that – is well-known. How could DJI escape that co-opting state pressure if it were exerted by authorities?
The Chinese National Intelligence Law is often cited. For one, we have never had any requests under this law from the Chinese government. But more fundamentally, we cannot give what we don’t have. We have designed our data practices so that you have to choose to opt-in to send us your flight logs or media data. By contrast, we do get regular warrants and subpoenas from US authorities seeking data on a drone that they have found or is the subject of a criminal investigation. And I can tell you, we usually don’t have anything meaningful to give unless that user decided to opt-in.
DJI is privately held. We don’t have any government investors with a golden share or control or a seat on our board or any executive positions. We have US Venture Capital firms as investors. And yes, we have Chinese investors as well, but they are invested on the same terms as everyone else. Our CEO and his co-founders still have the vast majority of voting rights, and they are the ones who decide the future of the company.
The latest House of Representatives blacklist bill, the Countering CCP Drones Act, seeks to effectively ground all DJI drones in the US – and thereby render future purchases of the craft nonsensical. How big a threat is that?
Most of the efforts against DJI to date would not impact the consumer segment. However, this is not the case with the Countering CCP Drones Act. If that passes, consumers in the US could lose access to the latest products from DJI. So if this legislation moves forward, you might see the consumer segment sit up and take notice.
The Countering CCP Drones Act would prevent DJI from getting the approvals it needs to launch new products in the United States. There is no proof of the justifications cited by the bill. In hearing testimony, it was actually claimed that our drones can read someone’s heartbeat. This kind of clearly false testimony shows that there is a lack of accurate knowledge of how our technology works.
This would be an astounding measure that would be devastating to the wider US drone industry. That includes the drone service providers, the drone software firms and others that depend on our products and benefit from our decision to completely open our ecosystem to developers.
My hope is that lawmakers will engage with the drone community before making any sweeping changes or decisions that affect them, take the time to better understand how our technology works, and hear what harm the bill would do to American businesses, emergency first responders and many others. We will continue to try to engage with lawmakers driving this bill, but ultimately we also need the drone community in the US to speak up and engage as productively as possible with their representatives.
Despite the spreading ban activity, DJI customers have been surprisingly passive in responding so far. Why?
I doubt many consumers are that aware of what is being said. We live and breathe it every day, but most recreational users look for DJI products because they are fun and easy to use and are priced in a way that is accessible.
I actually think our users are very active. We have seen a real outpouring of support from first responders, constructions companies, small drone service provider business, drone software companies, drone training business, and on and on. They are outraged by the campaign against DJI, and they know how their equipment from DJI operates.
That’s especially true in the public safety sector. These men and women take our products and use them to save lives and rescue people. They are loyal customers and love the products because they work for the kinds of missions they need to fly. And as a result, they are willing to spend time explaining to their bosses and to politicians why DJI drones are safe to use and why they are the best product for the operations they undertake. Is a politically motivated ban worth even one lost life?
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