DJI seems to be in a pickle. The Federal government is discussing an outright ban on DJI equipment in the United States. This is a bit of a concern if you’re a drone pilot, since 75% of all drones flying are made by DJI. DJI is already banned for use by the US military, discouraged by federal agencies and a few states like Florida. However there are waivers and work-arounds for now.
This is a problem for the industry. If DJI is banned, there really aren’t many alternatives of equal or better equipment and certainly none that can produce product at the scale required for 1:1 replacement. As of December 2023, the FAA reports that there are 790,918 drones registered in the US; 369,528 of which are registered for commercial use. 593,188 of them are DJI, according to my HP calculator emulator. Many pilots are under the impression that this is all for show, that they really aren’t going to do it, or that it’s just lobbying from sour-grapes competitors who can’t produce a superior product at the DJI price point. A few are promising to ignore the legislation and fly anyway.
Spies, like us.
The claim is that because DJI is probably partially owned by the Chinese government/Chinese Communist Party, there’s a security risk. DJI has responded that they don’t move any flight logs or other data out of the United States, that it all stays on domestic servers, and their industrial drones can be put into a mode that won’t ever export data to any server if that’s what the customer wants. DJI also denounces their products being used for military purposes (such as in Ukraine, where they specifically geofence their products… which kinda proves the company can meddle with them remotely) and that they remain independent. I’m not sure where the truth is, I’m just a drone pilot with a blog.
But this reminds me of two events that took place over the last 10 years. One personally impacted my life in a major way. The other, my industry at the time. Both seemed somewhat unbelievable at the time, but they both happened.
Li’l TDI, you're really lookin' fine
Back in 2012 I had some hot money burning a hole in my pocket and a car that was getting harder to maintain. At the time gasoline was expensive and diesel was cheap. VW had this incredible little mill called TDI. This thing could go 40+ miles on a gallon of diesel fuel. And still be a “hot hatchback” in the corners. At first I was looking for a VW Jetta, but after finding out that the newer models weren’t as good as the older ones I went next door to the Audi dealer. I drove the A3 and was hooked. I even ordered what I wanted from the factory, how cool was that?
I drove it. A lot. Especially in the summertime, when diesel was cheaper because it didn’t need the antifreeze additive. I drove from Grand Junction to Las Vegas on a single tank, and still had a little over 1/8th of a tank remaining. I drove to Pennsylvania, stopping for fuel twice along the way. Admitted, it was a little too small, but still …it was an Audi!
Then in 2015, it was declared an enemy of the environment. VW admitted they “cheated” on emissions testing by rigging the software to detect when it was on a Dynamometer and acting like it should for reducing particulates and NOx. VW/Audi put out a serious mea-culpa and sent a few engineers to jail over what the automotive press dubbed “diesel gate.” And Audi sent out gift cards and free service vouchers to owners.
Then came the buy back. I had a paid for, three year old car that I really enjoyed, and really had no intention of sending back to the dealer for modification. I just thought I’d have to find an independent mechanic and that’s that. But then I saw the offer, which was for about 75% of what I paid for the vehicle. After driving it for three years and nearly 100,000 miles.
Luca Brasi held a gun to his head, and my father assured him that either his brains or his signature would be on the contract.
What could I do? Keep a car that was basically worth nothing? Even though I live in an area that doesn’t require smog testing, if I ever move to the Denver metro area it won’t be compliant. And if I get it “fixed” I won’t get the fuel economy or performance that made it such a great car. It was an offer I couldn’t refuse. So I sold it back to Audi, bought my gas hog of a Cherokee… and a DJI Inspire 1 Pro -but that’s another story.
“Best Price”
Huawei is a Chinese owned telecommunications hardware manufacturer. They have been in business since 1987. In 2020 the Trump administration banned Huawei from operating in the United States. The Biden administration has continued the ban. In September of 2020 the FCC estimated the cost of replacement of all Huawei equipment to be about $1.8 billion. Congress appropriated $1.9 billion in 2021 for a reimbursement program. This report provides a good timeline of the events leading up to the ban, and subsequent “rip and replace” program.
https://crsreports.congress.gov/product/pdf/R/R47012/2
A few highlights worth mentioning:
The (Chinese) government identified certain Chinese firms, including Huawei, as “national champions”—firms that could help it build a domestic telecommunications industry. 59 National champions, including Huawei, received preferential policy treatment, access to low-cost financing, R&D funding, and tax benefits.
I believe DJI fits into a similar category. Because DJI is a privately held company we don’t have the transparency of larger firms like Huawei or Alibaba when it comes to ownership.
Huawei “slashed prices well below that of its competitors, purportedly sometimes by as much as 70 percent, and provided vendor-financed loans to their customers” to win global market share.
We see the cost of US, European and Japanese drones and clearly they’re more expensive by a wide margin. That’s not to say that DJI doesn’t have economies of scale or that they’re dumping, but when you look at the cost difference it’s substantial. DJI might say they sell at the “best price” but it seems to be a whole lot less than everyone else.
on April 19, 2018, Secretary of the Navy Richard Spencer testified the Navy had halted a contract because it found that a division of the company with which DOD was contracting listed Huawei as a joint venture partner. Further, following February 2018 testimony from intelligence officials expressing concern about Huawei devices at a hearing of the Senate Select Committee on Intelligence, DOD banned the sale of Huawei devices at military exchanges in April 2018 due to reported concerns from military officials that the Chinese government could use the devices to track the movement and location of soldiers.
Two years before the total ban on Huawei, the DOD banned them from all military contractor use. And pulled their products from the PX too. Remember that someone noticed that Strava was inadvertently telegraphing the location of military bases and classified areas as soldiers were logging workouts starting and ending at their quarters. DJI might not be intentionally collecting sensitive data, but given the uses in infrastructure inspections and mapping, it is inevitable that sensitive data will be collected by drones. If that data should happen to end up at a DJI service center after an unscheduled landing, well… there’s a laptop that had a lot of incriminating pictures and emails that just happened to end up at the repair shop once.
On July 14, 2020, the FAR Council issued an interim rule implementing Section 889(a)(1)(B).131 The new rule took effect August 13, 2020, for all federal agencies and contractors, unless an agency head granted a waiver or there was a previous exemption.
DJI drones have been removed from military use, and most federal agencies have removed them from service as well. The Blue UAS program was rolled out by the DOD as a clearinghouse list of approved drones that meet DOD requirements. This list is propagating through the industry as anyone with a potential federal contract will be expected to comply with the bans…
On December 13, 2019, the FAR Council published a second interim rule, effective immediately, amending the FAR to require contractors to certify annually whether they offer covered equipment, systems, or services to the government, including Huawei equipment or services. Only contractors who answer affirmatively in their annual certification are required to disclose more information on a contract-by-contract basis.
Recipients of U.S. Agency for International Development (USAID) funding reported that “some 70% of missions in Africa and 65% of missions in Asia are apparently relying on service providers with prohibited equipment [e.g., Huawei, ZTE].”
Sound familiar? History doesn’t repeat, but government actions do. Huawei proved that even if the threat is unfounded once the bureaucracy’s hive mind is made up, that’s the end of the story. There’s momentum in congress to get something passed. If there’s no money allocated, any action taken will end up in the courts, where the government will likely have to pay out damages to all the drone pilots flying DJI equipment. I think they’ll just appropriate a bunch of money for R&R and in a few years we’ll all be flying something other than DJI. And like my old A3, the offer will be too good to refuse.
Wat je zegt, ben je zelf.
But what about the facts? Where’s the evidence? Well, where was the evidence Huawei was spying? Was Huawei ever a real threat or only a “potential” threat? The various agencies that decided that Huawei was a threat, declared DJI is a threat and therefore must be removed. There’s a Dutch saying that roughly translates into “what you say about others, you say of yourself.” If the feds are accusing the Chinese of spying through their hardware you bet the various US agencies are doing the same thing. And if they weren’t they probably will be real soon. Just need to get some hardware out in the field.