USA Rare Earth, Inc. (NASDAQ: USAR) signed a joint development agreement (JDA) with ePropelled, Inc. to develop a strategic supply and purchase relationship of the company’s sintered neo magnets for use in its drone motors.
Announced on Tuesday, USAR will immediately begin prototyping neo magnets for use in ePropelled’s high-performance motors, controllers, generators, and power management systems.
The company’s systems are used in uncrewed vehicles (UAV) for air, land, and sea. These include large payload aerial drones and long range defense applications, and also for small surveillance and commercial drone designs.
The agreement represents a significant step in building USA Rare Earth’s 2026 pipeline, according to Joshua Ballard, CEO of USA Rare Earth. He said it will advance customer development across various industries as the company nears completion of its Stillwater manufacturing facility.
“We are very pleased to partner with such an innovative company as ePropelled, a global leader in magnetics engineering and a proven pioneer in the design and production of electric propulsion solutions,” said Ballard.
Operating worldwide, ePropelled serves a broad customer base that spans aerospace, defense, industrial automation, and maritime industries. The company’s technologies are used in mission-critical applications including long-endurance surveillance drones, robotic ground vehicles, and autonomous marine vessels. Its compliance with international defense standards (e.g. NDAA) and focus on domestically manufactured components make it especially attractive to governments and OEMs seeking secure, export-ready solutions.
“We’re thrilled to partner with USA Rare Earth to secure the rare earth materials essential to our uncrewed vehicle solutions,” said Nick Grewal, ePropelled’s Founder, Chairman and CEO.
“Expanding our supply chain — both in the U.S. and globally — is key to meeting the high expectations of our customers and staying ahead in this fast-moving industry.”
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Global drone market growing rapidly
The global market for uncrewed vehicle systems is expanding rapidly.
Fortune Business Insights valued the commercial drone market at USD$8.77 billion in 2022. The firm also projected it to grow to USD$54.81 billion by 2030. This change reflects a compound annual growth rate of 25.82 per cent. Defense and surveillance applications account for a significant portion of this growth, as governments worldwide invest in advanced autonomous platforms for intelligence gathering and security.
This surge fuels strong demand for lightweight, high-performance electric propulsion systems. These systems rely heavily on powerful permanent magnets to achieve efficient operation.
Furthermore, electric motors in long-range drones and robotic vehicles require magnets that deliver consistent power and durability under demanding conditions. Therefore, manufacturers seek magnet suppliers who can provide reliable, high-quality products at scale.
Additionally, militaries increasingly emphasize sourcing components domestically and ensuring compliance with standards like the U.S. National Defense Authorization Act (NDAA).
The Department of Defense considers permanent magnets a strategic supply chain vulnerability.
The global push to reduce dependence on China for critical minerals also adds urgency to domestic supply chain development. As this transition accelerates, the market for secure, NDAA-compliant magnetics solutions will grow both in scale and strategic importance.
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