HUNTSVILLE, Ala. — The U.S. Department of War's Office of Strategic Capital (OSC) has announced a conditional loan commitment of up to $820 million to Performance Drone Works (PDW) to expand domestic manufacturing of critical drone components, a move aimed at strengthening the U.S. defense industrial base and reducing reliance on foreign-controlled supply chains.
The funding, announced on July 31, 2026, will support the development of high-volume manufacturing capacity for essential drone components used in Group 1 and Group 2 uncrewed aircraft systems (UAS). The financing will be combined with private capital to help establish a larger domestic production base that can supply multiple U.S. drone manufacturers.
Expanding Domestic Drone Component Production
According to the Office of Strategic Capital, the project will create a new high-volume source of American-made drone components for the broader U.S. unmanned aircraft ecosystem. The expanded manufacturing capacity is intended to support both Performance Drone Works and other domestic manufacturers producing Group 1 and Group 2 UAS.
The components planned for production include propulsion systems, power and control systems, vision systems, and other enabling technologies. The initiative is designed to address supply-chain bottlenecks and improve the availability of critical components across the domestic drone industry.
The Department of War said the investment supports broader efforts to build a more secure and resilient supply chain for robotics and autonomous systems used in national security applications.
Manufacturing Expansion in Huntsville
Performance Drone Works will leverage its existing manufacturing infrastructure at Drone Factory 01 in Huntsville, Alabama, a 90,000-square-foot facility that integrates engineering, flight testing, systems integration, production, and fulfillment under one roof.
The company develops multi-mission aerial robotic systems for defense, government, public safety, and allied customers. Its Huntsville facility also supports production of systems including the C100 multi-mission quadcopter and AM platforms for U.S. and allied defense missions.
Supporting Executive Order 14307
The loan commitment supports President Donald Trump's Executive Order 14307, "Unleashing American Drone Dominance," which was signed on June 6, 2025. The executive order directs federal agencies to prioritize U.S.-manufactured unmanned aircraft systems, expand domestic production, and reduce dependence on foreign suppliers.
David A. Lorch, Director of the Office of Strategic Capital and Senior Advisor to Deputy Secretary of War Steve Feinberg, said PDW is among several domestic manufacturers selected to receive OSC loan commitments under the initiative.
"PDW will be one of several domestic component producers receiving OSC loan commitments in support of President Trump's Executive Order 14307, 'Unleashing American Drone Dominance.' Expanding domestic component production will benefit manufacturers throughout the ecosystem and improve supply-chain resilience," Lorch said.
Focus on Supply-Chain Resilience
The Office of Strategic Capital said the financing is intended to strengthen the domestic supply chain by increasing production of components that are currently vulnerable to foreign-controlled supply sources.
James R. Shanahan, Senior Managing Director at OSC, said the agency is focused on eliminating manufacturing bottlenecks affecting drones and autonomous systems.
"We are squarely focused on identifying and addressing bottlenecks in critical supply chains, including drones and autonomous systems. OSC's transaction with PDW, along with private capital crowded in alongside it, will support the construction of significant new manufacturing capacity to address vulnerabilities across the drone supply chain," Shanahan said.
Supporting the Defense Industrial Base
Emil Michael, Under Secretary of War for Research and Engineering, said strengthening domestic manufacturing capacity is essential for meeting the Department of War's drone production objectives.
"Achieving Secretary Hegseth's mandate for drone dominance requires a secure and resilient industrial base here at home. The Office of Strategic Capital is strengthening the domestic supply chain for critical drone components to ensure American manufacturers can deliver the capabilities that our warfighters need," Michael said.
PDW Highlights Importance of Domestic Manufacturing
PDW Holdings, Inc., the parent company of Performance Drone Works, said the financing would help establish domestic production of drone and robotics components that currently rely on foreign-controlled supply chains.
James Slider, CEO of PDW, said expanding U.S. manufacturing capacity is important for ensuring future operational readiness.
"America's ability to respond tomorrow depends on the industrial capacity we build today. This conditional commitment from the Department of War's Office of Strategic Capital would support the critical need of strengthening domestic manufacturing and restoring America's ability to build the capabilities our nation depends on," Slider said.
He added that the company is committed to delivering reliable capabilities to operators supporting U.S. and allied missions.
Matt Higgins, Co-Founder and Executive Chairman of PDW, said the financing would help establish a stronger domestic drone component ecosystem.
"For more than a decade, the United States has been dependent on foreign technology and has lacked a domestic drone component ecosystem. This financing would allow us to build the components necessary for a thriving, sovereign dual-use drone industry and help to secure our nation's industrial future," Higgins said.
Conditional Commitment Pending Final Approval
The Office of Strategic Capital noted that the announcement represents a conditional loan commitment, not a finalized loan agreement.
Before financial close, Performance Drone Works must complete customary financial, legal, technical, and other due diligence requirements. Once those conditions are satisfied, the financing can proceed.
The announcement reflects the Office of Strategic Capital's broader mission of providing financing that strengthens the U.S. industrial base and supports secure domestic supply chains for technologies considered important to national security.
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