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]. For procurement teams at drone, robotics, or equipment OEMs, the question isn't just about a better motor; it's about securing a domestic component for a critical system.
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, however, 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, with the goal of enabling Michigan manufacturers to compete globally [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 presumably funding the final engineering and tooling for the OR3627-900kV, as the company moves from a corporate spinoff,it was formed to commercialize patent-pending technology from Veolectra, Inc.,to a functioning hardware supplier [DBusiness, 2024]. The staggered seed round and lack of a publicly named lead investor suggest a cautious, milestone-driven approach typical of deep-tech hardware, where capital efficiency is paramount and the proof point is a shipped, validated product.
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, where supply chain security and performance specifications are equally weighted. The competitive set isn't just other motor startups; it's the 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. Modal's value is de-risking that single point of failure, but must prove parity on performance and cost.
- Other alternative-magnet startups. Companies like Niron Magnetics (a Modal partner) are developing the core magnet materials, while others may be designing motors around them. Modal's differentiation is its specific TFM architecture and its focus on being an integrated motor supplier, not a material science company.
- In-house development. Large OEMs with significant engineering resources could theoretically develop their own non-rare-earth solutions. Modal's answer is to move faster and offer a ready-to-integrate component, saving time and R&D budget.
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, proving not just that the motor works, but that the entire U.S.-based manufacturing and fulfillment operation works at the quality and pace B2B customers require.
Sources
- [Modal Motors, retrieved 2026] Advanced Electric Motors | Modal Motors | https://www.modalmotors.com/