Europe Turns to Cheaper Missiles as Ukraine War Exposes Stockpile Limits

European militaries are increasingly turning to cheaper missiles and interceptors after conflicts in Ukraine and the Middle East exposed the limits of small inventories of high-end weapons. Russia's daily drone and missile attacks on Ukraine have shown that modern conflicts can consume weapons faster than many countries can replace them.

"If you think you have enough cruise missiles in your inventory, you probably don't," said Douglas Barrie of the International Institute for Strategic Studies.

Analysts say Europe's defence sector spent years focused on small production runs of sophisticated weapons rather than wartime-scale manufacturing. Governments are now racing to seek lower-cost systems that can be fielded in greater numbers alongside advanced weapons from companies such as Lockheed Martin, MBDA and Rheinmetall. Industry executives say the challenge is no longer missile design but building the manufacturing capacity needed to sustain a modern conflict.

"Big wars are fought with numbers, not wonder weapons," said Markus Schiller, a researcher at the Stockholm International Peace Research Institute.

A new generation of defence startups says it can help meet the demand by developing cheaper missiles and interceptors designed for large-scale production. The Netherlands in June ordered 700 Ruta Block 2 cruise missiles from European startup Destinus for Ukraine in a €250 million ($288 million) deal, while Britain's Ministry of Defence awarded initial Skyhammer interceptor contracts to Cambridge Aerospace.

"Given how the battlefield has evolved since Russia's full-scale invasion of Ukraine, developing low-cost but effective weapons systems is important," the Estonian Defence Forces said.

The arithmetic of modern war

Ukraine has already built a layered response, downing many of the thousands of long-range drones Russia launches each month with mounted machine guns, interceptor drones and electronic warfare to preserve more advanced interceptors for higher-end threats.

Steven Barrett, chief executive of Cambridge Aerospace, said Russia could launch up to 900 Shahed-type drones in a single night. Attempting to defeat them with traditional interceptors, as the U.S. has at times done in the Middle East, "would cost billions of dollars per night ... which is just impossible for any of our allies to sustain," he said.

Andreas Bappert, chief technology officer of missile company Frankenburg, said future systems must reduce the cost of a successful interception from as much as €20 million to around €1 million to €2 million. Ukrainian startup Fire Point says it aims to build a ballistic-missile interceptor for less than €1 million, roughly one-quarter to one-sixth the cost of a U.S.-made Patriot air-defence interceptor.

Lockheed Martin this year unveiled a lower-cost Patriot missile. But even at less than half the cost of a Patriot PAC-3, it would remain above startup targets and is not expected to enter production until 2028. Unlike the PAC-3, which is designed to defeat ballistic missiles and advanced aircraft, many of the emerging low-cost systems are focused primarily on drones, cruise missiles or other lower-end threats. Industry executives and analysts say they are intended to complement rather than replace high-end air-defence systems.

Can Europe build enough?

Investors are increasingly backing emerging missile makers as they seek to scale production. Cambridge Aerospace raised $300 million last month to expand production, while Destinus is pursuing additional funding ahead of a planned IPO.

"The challenge for Europe is not that the technology does not exist," Destinus founder Mikhail Kokorich said. "The bigger challenge is industrial capacity, or the ability to produce, qualify and replenish systems on the scale required by modern conflicts."

Cambridge Aerospace is investing heavily to secure rocket motors and other critical components while incorporating commercial technologies such as automotive radar chips. Fire Point uses a network of manufacturing partners, while Destinus has plugged into Rheinmetall's industrial base through a joint venture announced earlier this year.

Cambridge Aerospace aims to produce 2,500 interceptors a month by the end of the first quarter next year, while Frankenburg is targeting output of up to 100 missiles a day and 1,500 missiles in 2026. Industry executives say scaling production depends not only on funding but also on securing components, obtaining approvals and expanding manufacturing processes.

Fire Point hopes to demonstrate a successful ballistic-missile interception by mid-2027, compressing what Chief Executive Iryna Terekh said would otherwise be a decades-long process into a few years. Frankenburg Chief Executive Kusti Salm said manufacturing capacity itself could become a deterrent if adversaries concluded Europe could rapidly replace missiles consumed in combat.

"If the enemy knows that we can produce en masse ... the equation tells him, I'm not going to reach my objectives," he said.