DIU officials say domestic sourcing rules are slowing scale-up as the Pentagon’s $1.1 billion program trails Ukraine’s far larger FPV drone output.
The Pentagon’s Defense Innovation Unit (DIU) says the effort to build a U.S. military drone manufacturing base remains in its earliest and hardest stage as stricter domestic sourcing rules complicate production growth. Travis Metz, the DIU’s Deputy Director and Chief Operating Officer, said Ukraine is expected to produce 6 million to 7 million small FPV (first-person view) attack drones this year, or about 500,000 a month, while the Pentagon’s $1.1 billion Drone Domination Program is projected to reach cumulative orders of just under 200,000 units through February 2026. Metz said the biggest challenge is creating the initial industrial base, arguing that scaling becomes easier once domestic capacity is established. The pressure is being intensified by a Department of Defense push for a fully domestic supply chain for small unmanned aircraft systems, with a revised framework published on July 23 barring components including Chinese-made brushless motors and battery packs. The 19 companies due to take part in the Gauntlet II test event in August at Fort Carson, Colorado, will not be allowed to use prohibited parts. Metz said the vast majority of drones bought in earlier procurement rounds likely relied on Chinese-made motors, although he added that hard-to-source semiconductors remain a more serious issue in other industries than in drones. To close the gap, the Pentagon is trying to convert Ukrainian battlefield know-how into U.S. manufacturing capacity by requiring invited Ukrainian firms to localize production through joint ventures or similar arrangements. All six Ukrainian companies invited to Gauntlet II have either formed partnerships with U.S. manufacturers or are moving that way as a condition for future orders. F-Drones has teamed up with Ohio-based Ukrainian Defense Drones and opened a facility near Toledo, while General Cherry has agreed to a joint venture with New Hampshire-based Wilcox Industries. Metz said the U.S. should eventually be able to match Ukraine’s scale, though the report suggests rebuilding the supply chain and reducing dependence on China will take time.