The first product is a drone propulsion motor, but the pitch is a supply chain. Modal Motors, a Farmington Hills, Michigan startup founded in 2024, is now taking orders for its OR3627-900kV motor, with first deliveries slated for Q4 2026 [Yahoo Finance / PR Newswire, June 2026]. The company's wedge is a patent-pending Transverse Flux Motor (TFM) architecture it claims delivers high torque density and efficiency without the use of Chinese-sourced rare-earth magnets, built entirely within a U.S.-and-allied supply chain [Modal Motors, retrieved 2026].
The Wedge: A Drone Motor and a Domestic Pipeline
Modal's initial market entry is pragmatic. By starting with a defined product for the commercial and industrial drone market, the company can prove its manufacturing and performance claims on a smaller, more immediate scale. The OR3627-900kV is positioned as a high-torque option for propulsion systems, with high-volume fulfillment targeted for Q1 2027 [Yahoo Finance / PR Newswire, June 2026]. The underlying technology is designed to be modular. CEO Michael Van Steenburg has stated the company is targeting OEMs across e-mobility, equipment, robotics, and data center applications [MITech TV / YouTube, 2026]. The technical bet rests on using alternative magnet materials like iron nitride (FeN) from partner Niron Magnetics and samarium-iron-nitride (SmFeN) from other allied sources [Modal Motors, retrieved 2026].
Funding and the Path to Production
The company has raised a seed round totaling approximately $2.1 million to bring its motors into U.S. production, with a $2 million tranche reported in 2025 and a subsequent $764,287 noted in October 2025 [Charged EVs, 2025] [Preqin]. This capital is funding the final engineering and tooling for the OR3627-900kV, as the company moves from a corporate spinoff of Veolectra, Inc. to a functioning hardware supplier [DBusiness, 2024].
The Realistic Competitive Set
Modal's ideal customer profile is a procurement officer or engineering lead at a North American OEM for drones, robotics, or specialized electric vehicles. The competitive set includes entrenched incumbents and the geopolitical status quo.
- Incumbent magnet motors. The default option for many OEMs remains high-performance motors using neodymium magnets, which are largely sourced and processed in China.
- Other alternative-magnet startups. Companies like Niron Magnetics are developing the core magnet materials, while others may be designing motors around them.
- In-house development. Large OEMs with significant engineering resources could theoretically develop their own non-rare-earth solutions.
The company's stated claim that its motors outperform Chinese rare-earth motors at the lowest cost of goods sold (COGS) in class remains to be validated by third-party testing and customer adoption [Modal Motors, retrieved 2026]. The next twelve months will be about converting those initial orders into referenceable deployments.