REPORT: Rheinmetall, MBDA, Ukrainian Drones — Europe Forges Its War Arsenal at a Forced March

REPORT: Rheinmetall, MBDA, Ukrainian Drones — Europe Forges Its War Arsenal at a Forced March

Introduction: When Europe's Defence Industry Finally Wakes From Its Long Sleep

A €73-billion order book that tells the whole story of an awakened Europe

As of March 31, 2026, German defence giant Rheinmetall posted a consolidated order book of €73 billion — a figure that would have seemed delusional five years ago, when Europe's defence industry was languishing in general political indifference. For the first time, the total includes the Naval Systems division, valued at €5.5 billion, reflecting the group's strategic expansion well beyond its historical land-munitions markets. In parallel, the Franco-British group MBDA, Europe's leader in guided missiles, announced in June 2026 a further 40 percent increase in production for the current year, after having already doubled its output between 2023 and the end of 2025.

These numbers are not stock-market abstractions. They represent 155-mm shells heading toward the Ukrainian front, missiles that will protect soldiers and cities, industrial war capacity that Europe had methodically allowed to atrophy since the end of the Cold War. The era of the peace dividend is definitively over. The era of accelerated industrial rearmament is open — and it is profoundly transforming the continent's economic and security fabric.

A decade of underinvestment clawed back under absolute emergency

To grasp the full scale of the catch-up under way, one must recall the catastrophic state of Europe's defence industrial base at the time of Ukraine's full-scale invasion in February 2022. Ammunition stocks were at rock bottom, production lines were running on idle, and investments in new capabilities had been systematically deferred or cancelled. European armies had been designed for light expeditionary operations, not high-intensity warfare consuming tens of thousands of shells a day.

Four and a half years later, the transformation is spectacular. Rheinmetall has opened new 155-mm production lines at its Unterlüß facility in Germany, targeting a capacity of 350,000 shells per year. MBDA has tripled its investment levels compared to 2021, thanks to massive capital injections from its shareholder governments. And Ukrainian drone production itself has surged vertiginously, leaping from roughly €1 billion in 2022 to nearly €50 billion in 2026.

Rheinmetall: The Transformation of an Industrial Group Into a Geopolitical Actor

From shell manufacturer to integrated military-industrial complex

Rheinmetall is no longer simply a manufacturer of armoured vehicles and munitions. The German group is becoming an integrated military-industrial complex capable of covering a spectrum of capabilities ranging from 155-mm shells to naval weapons systems, armoured vehicles, air-defence systems, and defence electronics components. The acquisition of the Naval Systems division — now integrated into the order book at €5.5 billion — reflects this accelerated diversification strategy.

The Unterlüß site in Lower Saxony has become a symbol of this transformation. New 155-mm munitions production lines operate in three shifts, seven days a week. The target of 350,000 shells per year represents a considerable increase over pre-war capacity, and that is only one element of the group's broader strategy — which includes opening or expanding production sites across several European countries, including Poland, Romania, Lithuania, and Ukraine itself.

Ukrainian contracts: an industrial-warfare symbiotic relationship

Rheinmetall's relationship with Ukraine goes beyond a simple commercial contract. The group has signed direct industrial cooperation agreements with Kyiv for local component and equipment production, knowing that geographic proximity to the front reduces delivery times and strengthens logistical resilience. These partnerships offer a model for European defence: integrating Ukraine not merely as a recipient of aid but as an active production partner.

Orders placed by European governments with Rheinmetall to support Ukraine account for a significant share of the €73-billion order book. This figure includes orders from NATO member states reconstituting their own stocks while feeding the military aid flow to Kyiv. It is a dual strategic dividend: strengthening collective defence while financing Ukrainian resistance.

MBDA: The European Missile at the Heart of the Defence Revolution

Double in two years, then another 40 percent — a wartime industrial pace

MBDA, the Franco-British-German-Italian group specializing in guided missiles, is living through its own industrial revolution. After doubling its production between 2023 and the end of 2025, the group announced in June 2026 a further 40 percent production increase for the current year. To achieve this, MBDA has benefited from capital injections from its shareholder governments — France, the United Kingdom, Germany, and Italy — which have tripled investment levels relative to 2021.

This acceleration responds to explosive demand, fuelled by lessons from the war in Ukraine. SCALP/Storm Shadow missiles demonstrated their strategic effectiveness in Ukrainian deep strikes against Russian military infrastructure. ASTER air-defence systems equip the ships and ground systems of several allies. Demand for these capabilities is structurally high for the years and decades ahead — this is not a cyclical peak but a new strategic normal.

The supply chain under pressure: the critical components challenge

MBDA's production acceleration runs up against supply constraints in the electronic components and special materials needed for missile guidance systems. This tension is not unique to MBDA — it affects the entire European military-industrial complex and partly explains why production targets are sometimes harder to meet than announcements suggest.

Dependence on military-specification semiconductor components, produced largely in Asia and the United States, constitutes a vulnerability that Europeans are actively working to reduce. Investment programmes in European production capacity for critical military components are under way, but their maturation will take years — during which external dependence remains a managed, not a solved, reality.

Ukrainian Drone Production: The Most Spectacular Quantitative Leap

From €1 billion to €50 billion in four years: a wartime industrial revolution

The most staggering figure in the panorama of defence production tied to the war in Ukraine is not Rheinmetall's or MBDA's — it is that of Ukrainian drone production itself. Jumping from roughly €1 billion in 2022 to nearly €50 billion in 2026, this 50-fold growth in four years represents one of the most rapid and massive industrial mobilizations in modern military history. Ukraine is no longer absorbing the technological war — it is redefining it.

Thousands of small businesses, technology startups, engineers, and soldiers turned entrepreneurs have built in just a few years a decentralized, resilient, and innovative industrial fabric at a pace no traditional industrial structure can match. Mass-produced FPV drones transformed ground combat tactics. Long-range drones have enabled strikes at 1,000, 1,500, even 2,000 km deep into Russian territory. That capacity barely existed at scale in 2022 — today it is a fundamental data point of the conflict.

The Ukrainian model as an inspiration for European defence

What Ukraine has achieved in the drone domain teaches Europeans an essential lesson: modern warfare demands industrial agility that classical bureaucratic defence structures cannot produce alone. Acquisition cycles lasting ten years, specifications locked in before the threat is even known, industrial consortiums shielded from competition — all of that belongs to a world that the war in Ukraine has shattered to pieces.

Several European countries — Poland, Estonia, Denmark — have begun adapting their acquisition models to incorporate shorter develop-test-deploy cycles, drawing directly from the Ukrainian experience. This is not a futuristic luxury — it is an operational necessity for any army that might need to fight tomorrow against a high-intensity adversary.

The 155-mm Shell: Symbol and Core Stake of the Industrial War

The munitions war, the conflict's first industrial battle

If one were to choose a symbol of the industrial battle between Ukraine and its supporters against Russia, it would be the 155-mm shell. This standard NATO artillery munition has become the reference indicator of the West's capacity to sustain support to Ukraine. At certain points the country consumed several tens of thousands of rounds per day — a pace that Western industries were absolutely unprepared to sustain in 2022.

Ramping up European 155-mm production has been one of the most pressing industrial challenges of the past two years. The European Union set a target of one million shells for Ukraine in 2024 — a target missed and then partially made up. Rheinmetall's sites in Germany, new Polish investments through Niewiadow/Polska Grupa Militarna in partnership with a French player, capacity increases in Nordic countries — all of this converges toward a durable reinforcement of production lines.

The skilled-labour challenge in the defence industry

One of the least visible but most real obstacles to accelerating munitions production in Europe is skilled-labour availability. Munitions factories require specific technical skills, strict safety protocols, and certifications that take time to obtain. Rapid site expansion means recruiting and training thousands of new employees in an already-tight labour market.

Several European defence groups have set up accelerated training programmes in partnership with technical education centres. Rheinmetall, notably, has developed training modules of six to twelve weeks for certain production roles — a drastic shortening of the usual pathways. These adaptations show that defence industrial mobilization requires not only capital but a profound transformation of human resources.

The ReArmEurope Programme: The Political Framework of Industrial Remilitarization

Brussels as financial and regulatory accelerator of rearmament

The rise of Rheinmetall and MBDA is not simply the product of market forces — it is actively supported by the political and financial framework put in place by the European Union under the ReArmEurope programme. With production-line modernization aid budgets, guaranteed-loan mechanisms for capacity investments, and accelerated procurement procedures, Brussels has played a decisive accelerator role.

The European Commission has prepared a programme of €165 million to modernize munitions production lines in several member states — a modest figure relative to total needs, but symbolically important because it marks the EU's entry into the direct financing of defence industrial capabilities, a political taboo lifted by the war. Larger mechanisms are being negotiated for the years ahead.

NATO-EU coordination: avoiding fragmentation of industrial efforts

Coordination between the NATO framework and the EU framework for the defence industrial build-up remains a persistent challenge. The two organizations have partially different memberships — notably the United Kingdom, in NATO but outside the EU — and their own institutional logics. Duplication of effort, lack of production-standard interoperability, or competition for the same suppliers can limit the overall effectiveness of rearmament.

Coordination structures have been strengthened since 2022, with regular meetings between defence industry officials from both institutions and progressive alignment on technical standards. But further progress is needed to reach the level of industrial integration that the current strategic challenge demands. War does not forgive inter-institutional bureaucratic inefficiencies.

Poland: The New Defence Industrial Hub at NATO's Heart

Niewiadow and the rise of the Polish-French defence industry

Poland is becoming one of Europe's most important defence industrial hubs. Polish company Niewiadow/Polska Grupa Militarna (PGM) has deepened its partnership with a French player to develop 155-mm munitions production capacity, while simultaneously pursuing ambitions in 40-mm munitions. This geographic positioning — at the junction of Western Europe and NATO's eastern flank — gives Poland considerable logistical value for crisis-time supply chains.

The Polish government has allocated defence budgets equivalent to 4 percent of GDP — the highest in NATO — and a significant share of those investments goes toward modernizing and expanding the national defence industrial base. The objective is twofold: ensure Polish sovereignty over its most critical defence capabilities, and position Poland as a reference producer and exporter for NATO allies.

The production decentralization strategy as resilience against strikes

One of the war's lessons from Ukraine is that concentrating defence industrial production at a few large sites is a strategic vulnerability. Russian strikes on Ukrainian industrial sites showed that known, localized facilities are prime targets. The Ukrainian response — decentralize, disperse, duplicate — offers a model that Europeans must integrate into their own defence industrial planning.

This decentralization logic argues for developing production capabilities across several NATO countries, including the Baltic states and Poland, even if unit costs there are sometimes slightly higher than at large German or French factories. Resilience against adversary strikes has a strategic value that justifies this premium — a lesson that Ukraine paid dearly to teach its allies.

New Capabilities: Drones, Loitering Munitions, and Autonomous Systems

Beyond conventional munitions: the rise of autonomous weapons systems

The defence industrial boom in Europe is not limited to 155-mm shells and conventional guided missiles. A new wave of investment targets autonomous weapons systems, loitering munitions (kamikaze drones), and electronic warfare capabilities. These categories, massively deployed in the war in Ukraine, have demonstrated their tactical and strategic effectiveness to the point of fundamentally reshaping the operational doctrines of ground and air forces.

European defence startups have raised unprecedented amounts of venture capital, attracted by defence public procurement markets opening up to non-traditional players. France, Germany, Estonia, and the United Kingdom have all adapted their procurement procedures to give these new companies easier access to defence markets. This is a structural transformation of the sector that, if sustained, could shift the technological balance of power relative to Russia and China in the years ahead.

Electronic warfare: the neglected domain reclaiming its central place

Electronic warfare — jamming, countermeasures, communications protection — has returned to the forefront of European defence investment priorities. The war in Ukraine demonstrated that electronic superiority is a decisive force multiplier: an enemy capable of jamming your communications, disrupting your GPS navigation, and intercepting your transmissions enjoys a considerable asymmetric advantage.

Companies such as Leonardo in Italy, Thales in France, Rohde & Schwarz in Germany, and several Nordic players have received substantial orders for mobile electronic warfare systems, drone jammers, and military communications protection equipment. These investments, long neglected in modernization plans, are now being treated with the same urgency as conventional munitions.

Financing Rearmament: National Budgets and European Mechanisms

Rising NATO defence budgets: finally a generalized reality

For the first time since the end of the Cold War, virtually all NATO members are reaching or exceeding the target of 2 percent of GDP devoted to defence — a target that seemed unachievable for many just five years ago. Germany, long the canonical example of chronic underinvestment at 1.2 percent of GDP, exceeded 2 percent in 2024 and is now approaching 3 percent. France, the United Kingdom, the Nordic countries, and the Baltic states all maintain budgets above the target.

This budgetary reality translates directly into the order books of defence industrialists like Rheinmetall and MBDA. But it also raises the question of long-term sustainability: in a context of pressure on public finances, demographic ageing, and growing social needs, maintaining defence efforts at these levels for decades will be a major political test for European governments.

Innovative mechanisms: common borrowing and European defence funds

To finance rearmament without excessively widening national deficits, the European Union is exploring innovative financing mechanisms. Modelled on the post-COVID recovery fund, proposals circulate for joint European borrowing dedicated to defence, which would allow the cost of the transition to a militarily capable Europe to be shared. These mechanisms face the traditional resistance of frugal countries, but political dynamics are pushing toward a gradual agreement.

The European Defence Fund, already operational for research and development, is set to grow significantly. Ongoing discussions in the European Parliament and the Council suggest that the next multiannual financial framework's budgets will include a substantial increase in the defence component — a quiet revolution in the European Union's identity.

Risks and Challenges: Not Confusing Orders With Deliveries

The gap between the order book and the reality of deliveries

A €73-billion order book for Rheinmetall is impressive. But the real value for collective security is measured by what is actually delivered, on time, to correct specifications. Delivery timelines in the defence industry can stretch over years, particularly for complex systems. Supply chain bottlenecks, subcontracting problems, recruitment difficulties — all factors that can turn a reassuring order book into a disappointing reality.

The lessons of the early years of Western support to Ukraine are eloquent: several equipment commitments took far longer than expected to materialize, creating windows of operational vulnerability that the Ukrainian army had to manage with insufficient resources. The risk of this repeating with new orders is real and must be actively managed through rigorous tracking mechanisms.

The standardization question: interoperability as a condition of success

One of the paradoxes of accelerated European rearmament is that, absent sufficient coordination, it risks producing greater fragmentation of equipment and standards rather than better interoperability. Countries rushing to order whatever is available may choose systems incompatible with those of their allies, creating logistical and operational challenges for decades to come. NATO standardization of munitions, communications, and weapons systems is an operational necessity that urgency pressures must not sacrifice for the sake of speed.

This tension between speed and coherence is one of the central challenges that European military planners must manage. Accelerated coordination mechanisms exist within NATO to address these questions — their effective activation in the context of current rearmament will be decisive for the real operational value of the investments made.

The Future of the European Defence Industrial Base: A Ten-Year Outlook

Three scenarios for the coming decade

The optimistic scenario for Europe's defence industrial base in ten years sees an integrated Europe with pooled production chains, a diversified technological base including autonomous systems and space capabilities, and logistical resilience that has been tested and proven. That is the scenario toward which Rheinmetall, MBDA, and the governments backing them are actively working. The middle scenario sees an improved but fragmented Europe, with substantial progress but persistent gaps in coordination and critical capabilities.

The pessimistic scenario would see the current momentum falter if a peace agreement in Ukraine — even a fragile, insufficiently guaranteed one — released the political pressure for a return to budgetary compromises and temptations of gradual disarmament. This last scenario is the most dangerous for long-term European security. The history of the peace dividend of the 1990s showed us that democracies can demobilize with disarming speed when the threat seems to recede.

The new geopolitical reality as a durable anchor for rearmament

There are, however, reasons to believe that the current situation is structurally different from the 1990s. The Russian threat is not a perception that can be dissolved by reconciliation rhetoric — it is a documented reality, embodied in the figures of a Russian military-industrial base in expansion and in Putin's own statements about his geopolitical objectives. The countries most directly threatened — Baltic, Polish, Scandinavian — have internalized this reality in a way that makes a return to the naivety of the 1990s politically impossible for them.

This structural pressure from NATO's most exposed members constitutes a durable safeguard against demobilization. It is reinforced by the ongoing cultural transformation in countries like Germany — where the historical taboo on military power is crumbling under the pressure of events. Europe's defence industrial base will benefit from this new political reality to consolidate its investments and capabilities.

Strategic Lessons for NATO: What Rheinmetall and MBDA Reveal

Industrial war precedes and conditions military war

One of the most fundamental lessons of the war in Ukraine — and one that the figures from Rheinmetall and MBDA embody — is that industrial war precedes and conditions military war. A country or alliance that cannot sustain, over time, the consumption of munitions and equipment demanded by a high-intensity conflict is condemned to lose, regardless of its soldiers' worth or the justice of its cause.

Russia banked on this Western industrial exhaustion from the beginning of the conflict. It underestimated Ukrainian resilience and the allies' willingness to sustain support. But it was partly right about the initial limits of Europe's industrial base. The ongoing industrial rearmament is precisely the response to that identified vulnerability — and Rheinmetall's €73-billion order book is its most tangible measure.

The Ukraine-NATO convergence: a transformation of the security architecture

Beyond the production figures, Europe's defence industrial boom represents a transformation of the continent's security architecture. Ukraine is no longer simply a country at war receiving help from its neighbours — it is a production partner, a laboratory of innovation, a testing ground for the technologies that will define tomorrow's warfare. This gradual integration of Ukraine into the European defence industrial fabric prefigures its future integration into NATO and the EU.

Ukraine's €50-billion drone production and Rheinmetall's €73-billion order book are inseparable — these two dynamics feed each other and converge toward the same strategic direction: a European defence that is stronger, more integrated, and more capable of protecting itself and its values against the powers that seek to destroy them.

Critical Look: The Dark Angles of the Defence Industry Boom

Racing for profits in a booming sector: the risk of military rent-seeking

The European defence industry boom also raises legitimate questions about governance and transparency. Groups like Rheinmetall have seen their share prices soar since 2022. Profit margins have improved. Executive compensation has followed. In a context of war and massive public funding, the question of whether taxpayers are getting the best possible value for their defence investments is legitimate and necessary.

Mechanisms for parliamentary oversight and defence contract auditing exist in democratic countries — but their effectiveness in the current emergency context, where normal procedures are often accelerated or bypassed in the name of delivery imperatives, warrants close attention. Transparency in defence spending is not a democratic luxury — it is a condition of the legitimacy of rearmament itself.

The environmental impact of accelerated military production

One aspect rarely mentioned in discussions about European industrial rearmament is its environmental footprint. The production of munitions, weapons systems, and military vehicles is by nature an energy- and materials-intensive activity. The current acceleration of this production enters into direct tension with the EU's decarbonization objectives and the commitments made under the European Green Deal.

Efforts are under way in the industry to electrify certain processes, optimize logistics, and reduce the carbon footprint of the supply chain. But it must be said honestly: under current conditions, security priority takes precedence over environmental priority in defence investment decisions. This trade-off is acceptable if the threat is real — and it is — but it must be named clearly rather than ignored.

Conclusion: Europe Forges Its Future in the Fire of the Defence Industry

A brutal but necessary awakening for the continent

Rheinmetall's €73-billion in orders, MBDA's doubled production, Ukraine's €50-billion drone output — all of this tells a single story: Europe is rearming, not by ideological choice but by existential necessity. The awakening has been brutal, belated, and costly in lives and resources. But it is real, it is under way, and it is producing measurable results on the ground in Ukraine and in allied arsenals.

This industrial rearmament is also a sovereignty project. A Europe capable of producing its own munitions, its own missiles, its own drones is a Europe less dependent on the United States for its defence — which is in the interest of all allies, including Americans who are tiring of bearing the burden of collective security alone.

Collective responsibility before history

In a decade, Europe will look back on this period — these years when factories ran day and night to forge the tools of a collective security too long neglected. History's judgement on today's decisions will hinge on one thing: did this industrial effort suffice to deter a new aggression, to protect Ukraine, to preserve European freedoms? No one can answer with certainty. But the effort itself is beyond dispute — and the figures of Rheinmetall and MBDA are its most eloquent industrial testimony.

Final Conclusion: From Molten Metal to Recovered Security

The irreversible transformation of Europe's defensive identity

What Rheinmetall and MBDA represent is not merely an industrial story — it is the beginning of an irreversible transformation of Europe's defensive identity. After decades of comfortable dependence on the American security umbrella, the continent is learning, in pain and under urgency, what it means to take its security into its own hands. This process is slow, imperfect, and costly. But it is under way. And the figures from March 2026 attest to this with a clarity that no one can deny.

Future generations will judge our choices of today

In twenty years, the generations that inherit the Europe we leave them will judge our choices today. Did we invest enough to protect them? Did we support Ukraine with enough determination for it to survive free? Did we build a defence industrial base robust enough to deter future aggressions? These questions deserve the best possible answer — and Rheinmetall's €73 billion is a step in the right direction. One step, not a destination.

By Maxime Marquette, columnist

Columnist's transparency note

My sources, my method, and my stated biases

This article draws on official public data from Rheinmetall and MBDA, analyses by defence economics experts, and verified journalistic reporting. I do not have access to these groups' internal financial data beyond what they publish officially. My bias is clearly in favour of European rearmament in the face of the Russian threat — I state this without ambiguity. I believe the defence industry is necessary, that its development is legitimate in current circumstances, and that supporting Ukraine is both a moral and strategic obligation.

What I do not know and the uncertainties in this analysis

I am not able to independently verify all the production and order figures cited in this article — they rest on statements from companies and governments that have their own interests in how they are presented. Actual delivery timelines, non-public bottlenecks, hidden cost overruns — all elements I cannot validate without access to confidential information. I encourage the reader to cross-reference this data with other independent sources to form their own judgement about the true state of European rearmament.

Sources

Primary sources

DebugLies Intel — European Defence Industrial Surge: munitions boom amid ReArm initiatives — June 11, 2026

EU Perspectives — Paris saw the future of defence, can Europe keep pace? — June 2026

Brussels Times — EU prepares €165M defence boost to modernise munitions production lines — 2026

Secondary sources

Industry Alarm — Poland's Niewiadow/PGM deepens 155-mm ammunition production with French partner — 2026

Euro SD — Niewiadow PGM: building Europe's next 40-mm ammunition hub — June 2026

EU Perspectives — Defence industry meet in France addresses Europe's arsenal gap — June 2026