AeroVironment bets $15M on Ohio biomanufacturing to cut US reliance on Chinese rare earths
What's the deal? AeroVironmentDealroom has a profile for this one. Try Dealroom → (AV) is investing $15 million in the Dayton area to bring online a 46,000-square-foot biomanufacturing facility in Xenia, Ohio. The site will serve commercial partners and the Department of War, with 1,200 liters of biomanufacturing capacity and matching downstream processing.
What's the endgame? AeroVironment wants to use precision fermentation — engineering microbes to produce specific molecules at scale — to make critical materials domestically. The aim is to produce rare earth elements such as neodymium, dysprosium, and ytterbium closer to where they are needed.
Why now? Recent global events have strained critical material supplies, and biomanufacturing now sits on the Department of War's critical technology list. AeroVironment, which has operated in the Dayton region for more than five decades, frames the expansion as central to "contested logistics."
The strategic rationale: China accounts for an estimated 70% of global rare earth production and has shown willingness to use that position as leverage. Reuters recently reported that China began restricting exports of rare earths and magnet precursors — terbium, dysprosium oxide, and yttrium oxide — to Japan, potentially disrupting suppliers to semiconductor firms, automakers, and defence contractors.
Senior director Lucas Beagle argues the shift is overdue. "This isn't just science; it's national security," he said, adding that the US is "grossly 'under-infrastructured'" on biomanufacturing capacity.
What could go wrong? Building a secure domestic rare earth supply chain capable of competing with China's dominance remains a significant task. Industry partnerships such as the Defense Industrial Base Consortium are shifting the landscape, but much work remains.
The signal: The Xenia facility reflects a broader push to onshore critical material production as supply chains fracture along geopolitical lines. As reactors scale, the economics of fermentation improve — potentially making biology a viable route to materials the US now imports.
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