China's Sanctions on Skydio

Earlier today I sent this note to our customers. Because this is a critical topic for the drone industry and for our national security, I'm sharing it here publicly as well.

Skydio customers,

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.

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.

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.

We will come out of this stronger than ever, with the most secure supply chain in the industry, continuing to meet the rapidly scaling needs of public safety, critical infrastructure, and defense customers around the world. We were targeted because we are the largest drone company outside of China, and because we serve critical customers that advance our national security, but no Western drone manufacturer is safe. As we develop the supply of batteries outside of China, we will share our work with our Western peers to help the world move on from this dangerous dependency.

We would not be where we are without you, our customers, and we will do everything in our power to minimize the impact to you. Thank you for your partnership, your support, and please don't hesitate to contact me or your Skydio representative with any questions.

best,
Adam