Could This Made-in-the-USA Drone Company Dethrone China's DJI?

China owns the drone industry -- and DJI particularly so.

According to ResearchAndMarkets.com's "Connected Commercial Drones-1st Edition," published in April, China's DJI holds a "dominant" 70% global market share in drones. WBUR public radio reports that in the U.S., DJI owns a market share of 75%!

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But one company wants to change that.

Image source: SiFly.

Introducing SiFly

Santa Clara, California-based start-up company SiFly has "ambitions to dethrone Shenzen-based DJI as the global standard in commercial drones," as Newsweek reported last month.

Up until last month, SiFly was a company operating in "stealth mode," avoiding attention and indeed, actively working to keep its existence a secret from the public. But in May, SiFly drew the veil off two new commercial quadcopter drones, the SiFly Q12 and Q250. The smaller Q12 boasts flight endurance of up to three hours, and can carry 10-pound payloads 90 miles before its batteries run out of juice. The larger Q250 can only fly for about half as long -- but carries 20 times the payload.

Nothing DJI has on the market currently can match these numbers -- nor can other companies not named "DJI." At a Michigan drone competition in May, SiFly's Q12 set a record as the longest-flying "delivery quadcopter" in the world. For comparison, DJI's Phantom 4 RTK, not the company's most popular consumer drone but a decent commercial product, can carry 30 pounds for about 30 minutes (over four miles), for a cost of $6,500.

DJI's most capable drone (at any price) appears to be the DJI FlyCart 30, a $20,000 drone that can carry 66-pound payloads about 10 miles, and usually must be special-ordered in the U.S.

Speaking of price, though, how do SiFly's new drones compare? Well, that's a bit of a mystery. With the products so new to the market, no one really knows what SiFly will charge for them. UAVCoach.com estimates an MSRP of "at least $10,000, if not much more," for the Q12. SiFly itself has floated a more aggressive target for the Q250, albeit still vague:

"We aim to be somewhere between the top end of the DJI market and what you see from the other Western suppliers, so we'd be talking about below $100k probably," for the Q250, says SiFly chief business officer Logan Jones.

Image source: SiFly.

Can SiFly compete with DJI?

So somewhere between $10,000 and $100,000... probably? That's a pretty big price range, made even less clear given we're talking about two entirely different SiFly drones.

Still, SiFly could probably sell its Q250 drone for more than DJI charges for the FlyCart and still compete effectively, based simply on the Q250's superior payload and endurance specifications. Domestically, the Q12 and Q250 also appear to compare favorably against, for example, AeroVironment's (NASDAQ: AVAV) Quantix commercial drone, which costs in the mid-teens thousands, but offers less range and endurance, and a smaller payload.

Long story short, for the time being at least, SiFly's drones appear to be in a class to themselves.

That's actually not too surprising, seeing as SiFly has to-date successfully kept what it's up to under wraps. Now that the company is advertising its existence, however, the significant advantages its drones have over the competition will presumably spur those rivals to up their own games (and/or lower their own prices).

They'll need to act fast, though, if they intend to maintain market share, because SiFly is planning to begin Q12 deliveries by Q4 2025, and is already holding demonstrations of both its UAVs to build customer demand for its products.

What about tariffs?

No discussion of American products competing with Chinese imports can be complete without a consideration of President Donald Trump's tariff policy, and its effect upon prices. As things stand today, Chinese imports to the U.S. entail tariffs of at least 30%. Tariffs on imported drones such as the FlyCart may be even higher due to Section 301 surcharges on "lithium-ion electrical vehicle batteries."

What does that mean for SiFly? In a couple of words, it means "less competition." DJI may boost the capability of its drones to compete with SiFly's superior offerings, but will probably need to raise its prices to do so -- and the effect of any such price increases will be magnified by the addition of tariffs to the product cost.

All things considered, SiFly appears to have chosen a great time to enter the market for commercial drones. Now, we just need to convince the company to IPO, so that we can invest in the opportunity...

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Rich Smith has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends AeroVironment. The Motley Fool has a disclosure policy.