Overwhelmed Situation: A numerical assessment of Ukraine's missile predicament
In the ever-evolving landscape of global defense, three countries – Russia, the United States, and Germany – dominate the production of defense rockets and drone systems.
Russia, in particular, has seen a significant surge in drone production. In 2024, the country reportedly produced up to 300 drones in just three days, with large-scale factories churning out thousands of drones monthly. These include the Geran-2 drones and Shahed-type drones, which have been deployed against Ukraine in large numbers.
Meanwhile, Germany's Rheinmetall, in collaboration with Lockheed Martin, is expanding production of rockets such as ATACMS and Hellfire at a new plant with growing capacity. The company anticipates increasing rocket production capacity to several thousand units yearly with new industrial expansions.
The production rates of interceptors, however, are not as rapid. In the United States, the production rate of PAC-3 units is capped at 54 units monthly under current funding. This is in contrast to Russia, where the production of missiles such as Iskander-M, Kinzhal, and Kh-101 has been on the rise.
Russia produced approximately 195 strategic missile units in June 2025, including 60 to 70 Iskander-M ballistic missiles, 10 to 15 Kinzhal hypersonic missiles, and 60 to 63 Kh-101 cruise missiles.
Ukraine, embroiled in conflict, is struggling to keep up with the high cost of interceptors and the overuse of them. Ukrainian stocks are depleted faster than they can be replenished, and as of July 2025, PAC-3 missile transfers from the United States have been suspended.
French-Italian SAMP/T and Crotale systems inside Ukraine are non-operational due to total interceptor exhaustion. The high cost of Western interceptor systems, such as PAC-3 MSE units, priced under cost-plus acquisition systems, with each unit costing $4 million, further exacerbates the situation.
Facilities such as Votkinsk in Russia are state-owned and directed by annual Ministry of Defense procurement schedules. In Russia, missile production platforms now incorporate counter-intercept adaptations, such as radar decoys, irregular flight paths, and terminal-phase maneuvers designed to degrade Patriot effectiveness.
However, no Western supplier has implemented structural reforms to reduce interceptor unit cost, and production rates are determined by shareholder margin, supplier dependency, and multiyear lead-time budgeting.
The current industrial posture is insufficient to cover multi-theater needs and there is no scalable framework to match sustained missile attrition under cost pressure. Unit cost reductions are not structurally possible under the present contract architecture.
As the global defense industry continues to evolve, it is clear that changes are necessary to ensure a balanced and sustainable defense landscape.
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