Skydio, one of the leading US drone makers, announced that China has imposed sanctions on it in response to its business with Taiwan.
Skydio is known for selling drones to militaries, first responders, and critical infrastructure operators. CEO Adam Bry penned a blog post saying that China is retaliating for the company selling to the Taiwanese National Fire Agency.
A few weeks ago, China announced sanctions on Skydio for selling drones to Taiwan, where our only customer today is the National Fire Agency. This is an attack on Skydio but it’s also an attack on you, our customers. We’re proud to support critical infrastructure operators, first responders, and allied militaries around the world. We’re proud to support Taiwan, and we are undeterred.
While Skydio has moved most of its supply chain outside of China, the company still relies on Chinese sources for its batteries, although it is working to secure new sources.
As a result of the sanctions, our battery supply will be reduced for the next few months which will impact our customers. We have always manufactured our drones in the U.S., and over the last few years we invested massively in bringing up supply for drone components outside of China. Batteries are one of the few components we have not yet moved out of China. We have a substantial stock of batteries on hand, and our team was already developing alternative suppliers. But right now we don’t expect new sources to come online until the spring of next year.
Bry says China’s sanctions are an effort to undermine one of the leading US drone manufactures and force dependence on Chinese companies at a time when those companies are losing ground in the market.
In order to continue delivering X10s and supporting our customers, we have to take the drastic step of rationing batteries to one per drone. I know how critical drones are to your work, and how important having additional batteries is for many of your missions. It pains me to do this. We are extending the software license, warranty, and support term for all drones fulfilled with less than a full complement of batteries by the length of time it takes us to deliver all batteries in the kit.
This is a clarifying moment for the drone industry. If there was ever any doubt, this action makes clear that the Chinese government will use supply chains as a weapon to advance their interests over ours. The drone market has historically been dominated by Chinese companies who are now rapidly losing market share to Skydio and our Western peers. This is an attempt to eliminate the leading American drone company and deepen the world’s dependence on Chinese drone suppliers.
It won’t work.
Skydio’s dilemma illustrates the growing complexity of US-China relations, and the companies caught in-between. The US House recently passed a bill to ban Chinese drones over surveillance and national security concerns. While Skydio may be the first major drone maker to be sanctioned by China, it likely won’t be the last.
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