The Reason Chinese Drone Giant DJI Has Stopped Selling To Russia, Ukraine

This is not a humanitarian gesture. 

The Ukrainian military accused DJI of permitting its drones to reveal to Russia the location of Ukraine troops and civilians. The implication confirmed concerns that Chinese products are routinely employed to deliver information of use to the Chinese government. These revelations hurt DJI sales in other, lucrative markets like Europe and the US - and could affect sales of Chinese electronics generally. So the Chinese government evidently decided it would be best to permit suspension of these products in the Ukraine war. JL 

Nicholas Gordon reports in Fortune, image Mittags:

Civilian drones like those manufactured by DJI have provided the warring sides with tactical advantages to track convoys (and) to provide surveillance and visual coverage during combat. (But) Ukraine has accused DJI of leaking the location of Ukrainian drone pilots to the Russian military and to "navigate missiles to kill civilians." (The) allegations against DJI began to harm the company's sales in other markets. DJI’s decision makes it the first Chinese company to publicly pull out of Russia after the invasion of Ukraine, although others, like state-owned petroleum giant Sinopec, have scaled back investment in Russia. Chinese drone maker DJI announced it is halting sales in Russia and Ukraine on Tuesday, following reports that both sides in the conflict are utilzing the Shenzhen-based company's consumer drones in military operations.

Drones have become a vital piece of weapons technology in the ongoing war in Ukraine. Ukraine has relied on the cheap, Turkish Bayraktar UAV drone to take out Russian tanks and launch systems and, last week, the U.S. announced it would send 121 newly-designed Phoenix Ghost drones—a so-called “switchblade” drone designed to detonate on impact—to Ukraine as part of a new military assistance package.

While military-grade drones are outfitting both Ukrainian and Russian militaries with heavy fire capabilities, simple civilian drones like those manufactured by DJI have also provided the warring sides with tactical advantages.

According to the Associated Press, Ukrainian drone users have been using DJI drones to track and monitor Russian convoys, while images and videos shared on social media show Russian forces using DJI products to provide surveillance and visual coverage during combat operations. Ukraine has also accused DJI of inadvertently leaking the location of Ukrainian drone pilots to the Russian military.

 

In March, Ukraine Deputy Prime Minister Mykhailo Fedorov said Russian forces were using DJI’s AeroScope system—which can notify third parties about the location of both a drone and its pilot—to pinpoint the location of Ukrainian drone operators, targeting them for retaliatory strikes.

Fedorov said Russia's military was using DJI products to "navigate their missile to kill civilians." In an interview with Chinese media Guancha, DJI called Fedorov's allegation “complete nonsense”. But the company did offer to ground all DJI drones in Ukraine, by deploying geofencing around the country.

Regardless, allegations against DJI began to harm the company's sales in other markets. On March 25, MediaMarkt, Europe’s largest electronics retailer, pulled DJI products from their shelves, calling the move “a clear signal for the values that have the highest priority for us and which we see being attacked in an unacceptable way by Russia’s aggressive war against Ukraine.”

In a statement released last Thursday, DJI reiterated that its drones were only designed for civilian purposes and said it "absolutely deplore[s] any use of our products to cause harm." DJI has not said it will ground existing drones in Russia and Ukraine. The company did not immediately respond to Fortune's request for comment.

DJI’s decision makes it the first Chinese company to publicly pull out of Russia after the invasion of Ukraine, although other companies, like state-owned petroleum giant Sinopec, have reportedly scaled back investment in Russia. China taxi-on-demand service Didi also attempted to pull out of Russia early during the war, but then back-pedalled its exit seemingly under the demand of Beijing, which has yet to recognize Russia's action as an "invasion."