US drone delivery enters factory-building, network-expansion phase

Key points

• Wing to invest $125 million in a Texas factory with potential annual output of tens of thousands of drones
• The factory will support Walmart's 270-store delivery network by 2027
• Zipline closed a $1.5 billion funding round the previous day and added 300 sites

Wing puts its money into capacity

Wing, the drone delivery company owned by Alphabet, said on Nov 6 that it will build and operate a next-generation drone production facility in Fort Worth, Texas, over the next two years, with an investment of up to $125 million (about 836 million yuan). The plant will cover about 15,000 square feet, is expected to create up to 100 manufacturing jobs and has the potential to produce tens of thousands of drones a year. Wing said the investment is mainly for direct manufacturing to support domestic production of its next-generation delivery drones. (Source: IT Home)

The notable point is not the amount but the purpose: drone delivery companies have previously concentrated spending on fleets and operations. Wing is now putting money into a factory, a sign it believes demand has reached a scale that requires dedicated production capacity.

Capacity aimed at Walmart's 270 stores

The next-generation delivery drones made at the new factory will support Walmart's plan to expand drone delivery to more than 270 stores by 2027. Wing already provides delivery services for Walmart in the Dallas-Fort Worth metro area, where 19 Walmart stores are connected to its system. (Source: IT Home)

Going from 19 stores to 270 is more than a tenfold expansion, with a window of just over a year. That explains why the company is building the factory first: the pace of site expansion is ultimately limited by drone delivery capacity.

Rival scales up a day earlier

A day before the announcement, Zipline, another Walmart drone partner, said it had closed a $1.5 billion funding round at a valuation of $21.5 billion and signed an agreement with Walmart for 300 additional delivery sites. (Source: IT Home)

The two companies are expanding ties with the same retailer at the same time, showing that Walmart is advancing its delivery network with multiple suppliers in parallel rather than betting on a single one. For Wing, building the factory is a necessary move to defend its share, not proof of a leading edge.

Current operating data

Wing's Hummingbird delivery drones have a top cruising speed of 97 km per hour and a maximum payload of about 2.3 kg, lowering packages to designated locations on a tether. The company says its service covers more than 70 sites across the US, completed more than 1 million deliveries to US households this year, and plans to cover nearly 20 metro areas and reach about 40 million US users by 2027. (Source: IT Home)

These figures are still the company's own account. Whether the factory can start production on schedule and whether the 270 stores can be in place by 2027 are the key tests of this expansion round.