Share prices for Archer Aviation and Joby Aviation jumped almost 20% late last week on news the U.S. government is considering banning Chinese-made drones. Archer and Joby are U.S.-based eVTOL developers that are both hoping to start selling their multi-copters in 2025, but they have little in common with the apparent focus of the Commerce Department rulemaking, which was announced on Jan. 3. The department is accepting public comments until March 4 on the proposed ban on drones used for everything from filmmaking to pipeline inspection. Most of them weigh 50 pounds or less but they do carry powerful sensors and high-res cameras.
About 90% of the drone market is held by Chinese companies, which include DJI, the largest drone company in the world. The federal government is concerned the drones are spying on the U.S. and being used to gather data on the myriad sensitive industries and facilities where they are used. “Drones made in the People’s Republic of China, including those made by DJI, pose acute risks to our national security and the privacy of all Americans,” the Commerce Department said in a news release. “Recent news reports have highlighted the increasing use of drones near sensitive military installations, raising very real concerns about espionage and national security.”
DJI has been fighting the proposed ban and it has a lot of support from industries that use their products. In fact, the comment period is being viewed as a temporary reprieve in the fight. However, President Joe Biden is considering an executive order that would short-circuit the Commerce Department action. According to stock advice website The Motley Fool, the ban on Chinese drone technology will be a potential boon to homegrown advanced air mobility companies like Joby and Archer.
