(Yicai) Dec. 6 -- Agricultural drones in China are expected to become increasingly affordable, driven by advances in design, declining component prices, and a maturing market, according to industry insiders.

Prices of XAG's drones continue to decline, Peng Bin, chief executive of the Guangzhou-based company, said to Yicai recently. Products with a load capacity exceeding 70 kilograms now cost less than CNY40,000 (USD5,507), compared to around CNY100,000 (USD13,769) in 2016.

Despite the price reductions, XAG expects to turn losses into profits this year, Peng said.

XAG ranks third in the global agricultural drone market with a 9 percent share, according to QY Research. Shenzhen-based DJI leads the market with a 30 percent share, followed by Yamaha with 11 percent.

Producers are actively working to reduce costs. Around 70 to 80 percent of the price cuts stem from design optimization, according to Peng. When developing new products, the company is eliminating all unnecessary structures, recognizing that farmers are unwilling to pay premium prices.

A DJI engineer specializing in agricultural drones told Yicai that companies are reducing costs through strategic design improvements, including optimizing propeller power system efficiency, minimizing drone weight, and streamlining component count.

In addition to optimized drone design, the declining prices of critical components are driving cost efficiency. Lithium battery prices, which constitute around one-third of a drone's total cost, have dropped due to the rapid development of the electric vehicle industry in recent years, according to an industry professional.

The downward trend in laser radar prices is just beginning, the DJI engineer noted. Prices of these remote-sensing products used in smart EVs and drones have declined significantly, with expectations that they will continue to either double performance at current prices or maintain the same performance at half the cost.

As the drone market expands, the supply chain is gradually maturing. Large-scale component production is anticipated to lead to substantial reductions in supplier costs, the engineer concluded.

Editors: Tang Shihua, Emmi Laine