The Defense Innovation Unit (DIU), working with the Department of Defense’s Office of the Under Secretary of Defense for Acquisition & Sustainment (A&S), has selected four industry teams to develop and demonstrate long-range, one-way unmanned aerial systems (UAS) under Project Artemis. Funded by a dedicated FY24 budget line, the effort will evaluate “attritable” loitering munitions designed to operate in contested electronic warfare (EW) and GPS-denied environments. By combining rapid prototyping with operationally representative testing, Project Artemis aims to field systems capable of delivering strike effects or conducting intelligence, surveillance, and reconnaissance (ISR) in demanding conditions.
Recent combat operations have illustrated the growing role of one-way attack (OWA) drones in modern conflicts. In the Russia-Ukraine war, Ukrainian forces deploy hundreds of commercial-off-the-shelf drones nightly to strike positions beyond the front lines. Similarly, in April 2024, Iran launched several hundred drones—alongside cruise and ballistic missiles—from western Iran toward Israel, covering more than 1,000 kilometers. At unit costs in the tens of thousands of dollars, a swarm of 500 drones represents an expenditure of $50–100 million. Even with attrition rates of 80–90 percent, such swarm attacks can degrade defended targets and overwhelm unprotected assets. These dynamics are reshaping the economics of aerial strikes, shifting procurement toward mass-produced, low-cost systems employed by the hundreds rather than as single, expensive platforms.
Alongside the drones themselves, operators require rapid-deployment launch solutions. Iran’s truck-mounted launcher for Shahed-136 OWA drones, which fires five vehicles in quick succession, resembles a multiple-launch rocket system in form and function. Israel’s IAI Harop launcher similarly mounts six drones on a vehicle chassis disguised as a commercial container. In both cases, persistent surveillance and intelligence support are needed to detect and characterize these platforms, which blend into civilian logistics vehicles.
Selected participants in Project Artemis include Swan—a U.S. software developer partnered with a Ukrainian UAS integrator—alongside with its own Ukrainian collaborator. Each team must deliver ground-launchable vehicles capable of low-altitude flight, beyond-line-of-sight operations, and robust performance in environments with disrupted, disconnected, intermittent, or low-bandwidth communications. These requirements reflect user feedback on the need for systems that can adapt autonomously when conventional networks are degraded or denied.
To cover a spectrum of mission sets, Artemis defines stringent performance targets. Prototypes must achieve ranges between 50 km and at least 300 km, carry payloads of no less than 10 kg—ideally above 25 kg—and remain affordable for high-volume production. That payload capacity may accommodate a warhead for hardened targets, an EW jamming suite, or an ISR sensor package. Ground-launch capability ensures employment from forward-deployed or expeditionary locations, while DIL-rated communications and navigation systems sustain mission continuity in the absence of GPS or secure data links.
Project Artemis also employs an expedited acquisition model. In just over four months, DIU and A&S moved from problem definition to contract awards, processing 165 proposals and conducting flight demonstrations to verify performance claims. Awardees are expected to deliver functional prototypes by the close of FY 2025. This streamlined pathway bypasses traditional procurement timelines, reflecting lessons from recent conflicts where the speed of fielding and iterative upgrades have delivered operational advantages.
Combat experience in Eastern Europe has further driven demand for EW-resilient systems. Ukrainian forces have repurposed commercial UAS into attritable attack and reconnaissance assets, proving the value of flexible, easily manufactured platforms. By pairing U.S. contractors with Ukrainian developers, DIU seeks to harness that frontline expertise and accelerate the maturation of solutions tested under real-world pressures.
Project Artemis complements the broader Pentagon “Replicator” initiative, which aims to field thousands of autonomous systems across multiple domains to counter massed adversary forces. Artemis’s emphasis on cost-effective, one-way prototypes aligns with Replicator’s goal of scalable attritable platforms. Both efforts expand the defense industrial base by incorporating non-traditional suppliers and international partners, reinforcing the Department’s commitment to more agile and distributed procurement.
Among the Artemis demonstrations, Dragoon Technology integrates Teledyne FLIR’s Prism Supervisor and Prism SKR software into its Cinder UAS prototype. Prism SKR delivers automatic target recognition (ATR) for infrared and visible sensors on low-power processors, enabling real-time detection, identification, and tracking. Prism Supervisor provides end-to-end autonomy and mission oversight, linking navigation systems with AI-driven observations through a streamlined planning interface. Together, these capabilities reduce operator workload and support increasingly complex mission profiles.
As prototypes reach maturity, Project Artemis will generate data on performance, reliability, and cost metrics in contested settings. Those insights will inform follow-on acquisition decisions and guide integration into joint force structures. By prioritizing rapid prototype delivery and leveraging combat-proven partnerships, Artemis marks a shift toward faster, more scalable UAS procurement—balancing urgent operational needs with the requirement for proven, effective capabilities.
The race to achieve air dominance is entering a new phase, defined by the rapid development and deployment of long-range beyond-visual-range (BVR) air-to-air missiles (AAMs). These next-generation weapons—capable of intercepting high-value targets hundreds of kilometers away—transform aerial combat doctrines, operational planning, and defense procurement strategies. Featuring cutting-edge propulsion systems, onboard radar seekers, and networked communication capabilities, these missiles extend engagement envelopes far beyond the traditional dogfighting range and introduce complex new dynamics into the battle for control of the skies.
This shift is being driven by strategic competitors such as China and Russia, whose latest missile programs—alongside counter-developments by the United States and its NATO allies—are reshaping the air combat landscape.
Key Systems Redefining BVR Engagement
China’s PL-15: Strategic Reach and Networked Targeting
Developed by the China Airborne Missile Academy, the PL-15 is a long-range missile engineered for extended-range engagements against key aerial assets such as fighters, airborne warning and control system (AWACS) aircraft, and aerial tankers. With a range of up to 300 kilometres in its domestic variant and approximately 145 kilometres for export (PL-15E), the missile features an active electronically scanned array (AESA) radar seeker, a dual-pulse solid rocket motor, and a two-way datalink. These capabilities enable the missile to operate in complex electromagnetic environments while receiving midcourse guidance from launch platforms or other command and control (C2) assets.
The PL-15 has seen combat use by Pakistan, marking the first known operational employment of this class of Chinese weapon outside its domestic forces. This event not only demonstrated China’s readiness to export advanced weapons but also highlighted the potential proliferation risks associated with such capabilities.
Russia’s KS-172: Strategic Aerial Sniper
Russia’s KS-172 (also referred to as the K-100 or R-172) is designed to intercept high-value airborne targets—including AWACS, electronic warfare platforms, and tankers—at extreme ranges beyond 400 kilometres. It uses a tandem solid-fuel rocket booster and active radar guidance in the terminal phase. With a reported top speed exceeding Mach 5, the KS-172 transforms platforms like the MiG-31 “Foxhound” into strategic interceptors, capable of neutralizing enemy force multipliers from outside the engagement range of defending fighters.
Although still in evaluation, the KS-172 is emblematic of Russia’s approach to anti-access/area-denial (A2/AD) strategies and underscores the importance of long-range AAMs in denying adversaries the ability to project air power through enabler platforms.
Europe’s Meteor: Sustained Power with Ramjet Propulsion
The MBDA Meteor, a collaborative European missile, has been operational since 2016 and introduces throttleable ramjet propulsion to the BVR missile category. This feature enables the Meteor to maintain high energy through flight and enhances its “No Escape Zone”—the area within which a target cannot outmaneuver or evade the missile.
With a maximum speed above Mach 4 and a range approaching 200 kilometres, the Meteor integrates a two-way datalink and active radar seeker, allowing mid-course updates and terminal accuracy. The missile is deployed across platforms such as the Eurofighter Typhoon, Dassault Rafale, and Saab Gripen, and it is planned to integrate into the F-35.
USA’s AIM-260 JATM: Future-Proofing Air Combat
Developed by Lockheed Martin, the AIM-260 Joint Advanced Tactical Missile (JATM) is the United States’ answer to the PL-15 threat. Still, in its initial production phase, the AIM-260 is designed to eventually replace the AIM-120 Advanced Medium-Range Air-to-Air Missile (AMRAAM). Thanks to its compact dimensions, it is expected to exceed 200 kilometres in range, reach speeds up to Mach 5, and be compatible with stealth fighters like the F-22 Raptor and F-35 Lightning II.
The JATM features inertial guidance, a two-way datalink, and an active radar seeker, positioning it for full participation in a networked battlespace. Its design emphasizes data sharing and dynamic targeting, aligning with emerging doctrines of collaborative air combat.
Implications for Doctrine, Tactics, and Platforms
The emergence of these long-range AAMs is catalyzing a doctrinal transformation in air combat:
Standoff Engagements Become Normative: With missile ranges exceeding 300 kilometers, air engagements are now shifting to standoff distances, where adversaries may never visually acquire each other before launch. Pilots and unmanned operators must rely on datalinked sensor networks and electronic surveillance rather than visual confirmation.
Network-Centric Warfare Is Essential: Missiles like the PL-15, Meteor, and AIM-260 rely heavily on two-way datalinks for in-flight updates, enabling cooperative targeting. This requires robust, encrypted, resilient communications between aircraft, airborne C2 platforms, and ground or space-based assets.
Airspace Deconfliction is Critical: Engaging long-range targets necessitates precise airspace management to prevent fratricide or civilian casualties. Dynamic airspace deconfliction tools and improved situational awareness are becoming operational imperatives.
Uncrewed Platforms as Combat Multipliers: The rise of Collaborative Combat Aircraft (CCA)—unmanned systems designed to accompany manned fighters—is particularly relevant. These unpiloted platforms can act as sensor nodes, datalink relays, refueling assets and missile carriers, allowing manned fighters to maintain stealth and survivability while extending their reach.
Targeting High-Value Assets (HVAs): The new generation of AAMs is optimized for neutralizing enablers such as AWACS, electronic warfare aircraft, and tankers. Removing these from the battlespace could cripple an adversary’s ability to coordinate operations, creating an asymmetric advantage for the attacker.
Vulnerability of support elements: With long-range weapons employed by stealthy aircraft or drones, Airborne early warning (AEW) and aerial refuelling assets flying in support of Combat Air Patrols (CAP) or strike packages hitherto considered safely positioned outside the range of enemy air defenses are becoming primary targets for opposing forces. While flying radars (AEW) cannot become invisible, aerial SIGINT, communications support, and flight refueling platforms could shift to stealthy and unmanned platforms to become more survivable.
Strategic Outlook
The technological and operational advancements embodied by these BVR missiles represent incremental evolution and a paradigm shift in air warfare. Their ability to reach, track, and destroy targets at unprecedented distances introduces opportunities and challenges.
As missile range increases, so does the strategic importance of first detection, launch, and kill. In this race, superiority will no longer be decided in the visual merge but far beyond—by the nation that best integrates sensors, shooters, and strategy into a cohesive, resilient force.
Qatar has finalized a $1 billion defense agreement to acquire Raytheon’s Fixed Site Low, Slow, Small Unmanned Aircraft System Integrated Defeat System (FS-LIDS), becoming the first international operator of this U.S. counter-drone architecture. Announced on May 14, 2025, the contract covers ten FS-LIDS installations, 200 Raytheon Coyote Block 2 interceptors with launchers, and a comprehensive suite of training and support services to maintain system readiness and effectiveness.
FS-LIDS integrates layered detection and defeat capabilities to address small, low-flying UAS threats. Its sensor suite combines Ku-band Radio Frequency System (KuRFS) and AN/TPQ-50 radar for precision detection, augmented by electro-optical and infrared (EO/IR) cameras for target tracking and identification under diverse environmental conditions. On the effector’s side, the system employs electronic warfare tools to disrupt drone control signals non-kinetically, alongside the Coyote Block 2 jet-powered loitering munition for physical interception of drones in flight. Data from all sensors and effectors is consolidated through the Forward Area Air Defense Command and Control (FAAD C2) system, providing operators with a unified situational picture and engagement options tailored to the threat.
The acquisition responds to the rapid proliferation of unmanned aerial systems across the Middle East, where both state and non-state actors have employed small drones for surveillance, intelligence gathering, and kinetic attacks. Critical infrastructure—including oil and gas facilities, airbases, and seaports—faces heightened risk from low-cost, attritable UAS operations. By deploying FS-LIDS at fixed sites protecting these assets, Qatar strengthens its defensive posture against evolving aerial threats and aligns with broader regional efforts to bolster airspace security.
As the inaugural foreign sale of FS-LIDS, Qatar’s procurement sets a precedent for next-generation integrated air defense solutions. The deal underscores the deepening defense relationship between the United States and Qatar, which hosts the Al Udeid Air Base—America’s largest military facility in the Middle East. From a U.S. perspective, the sale supports the domestic defense industrial base, promotes interoperability with partner nations, and may pave the way for subsequent foreign military sales of the LIDS family of systems. It also supports a wider defensive array beyond the base that will enhance the protection of US facilities beyond the perimeter.
Qatar’s selection of FS-LIDS reflects a broader trend in the C-UAS market toward multi-layered architectures rather than standalone point defenses. The diverse nature of drone threats—varying in speed, size, altitude, operational mode, and control mechanism—necessitates an integrated approach. Radar provides early warning, EO/IR systems enable visual confirmation, EW effectors disrupt susceptible platforms, and kinetic interceptors neutralize drones that pose immediate risks or employ resilient communication links. The FAAD C2 backbone ensures coordinated management of these elements, optimizing engagement decisions in real-time.
This procurement builds on Raytheon’s expanding production footprint in the UAE, following a November 17, 2023, Memorandum of Understanding with EDGE Group’s engineering arm EPI to produce prototype machined aluminum and assembly parts for the Coyote Block II interceptor and the May 19, 2025 inauguration of a 21,500 sq ft Coyote assembly and testing facility at Abu Dhabi’s Tawazun Industrial Park. These initiatives aim to strengthen local manufacturing capabilities, enhance supply chain resilience, and support the sustained deployment of Raytheon’s C-UAS solutions among U.S. partners in the Gulf.
The $1 billion FS-LIDS contract marks a significant milestone in the global “drone versus anti-drone” dynamic, fuelling continuous innovation on both offense and defense. As more sophisticated C-UAS systems enter service, adversaries will likely develop countermeasures—such as stealthier airframes, advanced swarm tactics, and hardened command links—triggering an action-reaction cycle in unmanned aerial warfare. Qatar’s investment highlights the growing strategic importance of comprehensive C-UAS capabilities and signals an evolving security environment in which integrated defenses become foundational to national resilience.
Sceptre (TRBM 155HG), a new liquid fuelled, 155mm Ramjet extended-range precision-guided artillery munition developed by Tiberius Aerospace. Image: Tiberius
Defense technology company Tiberius Aerospace has publicly launched its first product, the Sceptre ramjet-powered artillery munition, marking its emergence from stealth mode after three years of development.
The Sceptre (TRBM 155HG) is a 155mm extended-range precision-guided munition designed for use with existing NATO artillery platforms. The weapon utilizes ramjet propulsion technology to achieve speeds of Mach 3.5 and can reach altitudes exceeding 65,000 feet, according to the company.
The munition offers several notable technical features compared to conventional artillery rounds:
Range: Up to 150 kilometers depending on payload configuration (maximum warhead weight: 5.2kg)
Accuracy: Circular error probability (CEP) of less than 5 meters,
even in a GPS-denied environment
Propulsion: Liquid-fueled ramjet engine compatible with diesel, JP-4, and JP-8 fuels
Guidance: GPS and inertial navigation with AI-assisted error correction for operation in GPS-contested environments.
Several established defense manufacturers, including Nammo and Rheinmetall, have introduced RAMJET-powered, extended-range artillery munitions, yet none have been fielded. Unlike TRBM 155HG, these munitions used solid rockets as fuel.
The Sceptre system is designed to be compatible with standard NATO 155mm howitzers without requiring platform modifications. The company claims the munition’s design minimizes barrel wear due to limited contact points during firing.
During the flight, the onboard GPS and inertial measurement unit synchronize and leverage advanced AI to correct errors to desired confidence levels, allowing operation in degraded or GPS-denied environments. If needed, multiple munitions can communicate in flight to refine the targeting solution further. With active propulsion, Sceptre flies at altitudes in excess of 65,000 feet and remains beyond the enemy EW jamming range for the majority of its flight trajectory.
The Sceptre announcement comes as military forces worldwide reassess their artillery capabilities. Extended-range precision munitions have become increasingly valuable in modern warfare, offering the ability to strike targets at greater distances while reducing the risk of firing platforms targeted by counterfire by loitering munitions.
Traditional artillery faces limitations in range and accuracy that newer guided munitions aim to address. However, the first generation of GPS-guided munitions has been challenged by Russian Electronic Warfare. The ability to operate in GPS-denied environments—a key capability Tiberius claims for the Sceptre—has become particularly important as electronic warfare capabilities proliferate.
Tiberius Aerospace was founded in 2022 with what the company describes as “Silicon Valley DNA,” aiming to apply commercial technology practices to defense applications. The timing coincides with a renewed focus on artillery capabilities following recent conflicts, particularly the ongoing war in Ukraine and the Indo-Pakistani conflict; both have highlighted the importance of long-range precision fires. Tiberius positions itself as serving the U.S., UK, and allied nations with a “Defence-as-a-Service” model. This announcement coincides with the Future Artillery conference, taking place this week in London on 20-22 May 2025. Chad Steelberg, Tiberius Aerospace’s founder and CEO, emphasized the company’s focus on delivering “next-generation weapon systems of outstanding capability with precision, scale, and efficiency” in announcing the Sceptre system.
Leopard 2 tanks in production at Rheinmetall's tank assembly plant. New facilities are being established in automotive plants converted into armored vehicles production facilities. Photo: Axel Heimken, AFP
This comprehensive market assessment builds upon Defense Update’s previous Q1 2025 market brief, incorporating performance data from mid-tier and international defense companies, emerging technology players, and significant post-period geopolitical developments.
The first quarter of 2025 confirmed the defense sector’s exceptional momentum across all market tiers, from major U.S. primes to specialized technology providers and international contractors. With significant post-period developments, including potential NATO spending increases and major Middle East defense deals, the sector demonstrates unprecedented strength and a growth trajectory extending well into 2025 and beyond. Check Part I of the Q1 market review published on April 25, 2025
The defense market demonstrated remarkable resilience and growth throughout Q1 2025, with several companies achieving record-breaking financial milestones. This performance was underpinned by three primary drivers: continued global security challenges requiring immediate response capabilities, government commitments to defense modernization programs, and accelerating demand for advanced technologies that provide tactical and strategic advantages.
US Companies Performance Highlights
Honeywell Aerospace Technologies (HON) delivered outstanding results with a 14% year-over-year sales increase, driven by robust demand across both commercial aftermarket and defense sectors. The company’s total backlog reached a record $36.1 billion, with aerospace and defense representing a substantial portion. The planned spin-off of the Aerospace business signals a strategic focus on enhancing operational agility in this critical market segment.
Leidos Holdings (LDOS) continued its strong trajectory in defense modernization, intelligence solutions, and advanced technology integration. The company secured significant contracts across integrated defense systems, mission IT, cyber solutions, and logistics capabilities, contributing to a healthy backlog position. Strategic investments in AI, autonomous systems, and digital transformation initiatives position Leidos well for future growth in an increasingly technology-driven defense landscape.
Palantir Technologies (PLTR) emerged as a standout performer, with government revenue surging 45% year-over-year to $373 million, marking the seventh consecutive quarter of accelerating growth. The company’s success was primarily driven by defense contracts for AI-powered battlefield analysis and automated military functions. A significant NATO contract contributed to a 45% increase in international government revenue, while the AI Platform (AIP) gained traction in complex aerospace applications, including satellite data analysis. The total remaining deal value reached $5.97 billion.
Kratos Defense & Security Solutions (KTOS) demonstrated robust growth driven by its hypersonic systems, unmanned technologies, and propulsion solutions portfolio. With a hypersonic opportunity pipeline exceeding $12.6 billion, the company is well-positioned in one of the defense market’s most rapidly expanding segments. The Unmanned Systems division showed particular strength with 6.2% organic revenue growth and an impressive book-to-bill ratio of 1.8:1, especially for the Valkyrie drone platform. Overall revenue increased 9.2% year-over-year to $302.6 million, with backlog growing to $1.508 billion.
Curtiss-Wright Corporation (CW) reported significant growth across both U.S. and international defense markets, driven by modernization programs and new platform acquisitions. Key program wins included contracts for next-generation fighter jets, naval systems, and missile defense platforms. The defense and aerospace segment contributed meaningfully to overall margin expansion while maintaining a strong backlog position.
Rocket Lab USA (RKLB) achieved impressive Q1 results, with revenue reaching $122.6 million, representing 32% year-over-year growth. The company secured an important position in the defense and government sector through on-ramping to the U.S. Department of Defense’s $5.6 billion National Security Space Launch (NSSL) Phase 3 Lane 1 program and securing launch contracts with the U.S. Air Force. The implementation of a new holding company structure reflects the company’s expanding national security focus, while a growing backlog of $1.067 billion is increasingly driven by government and defense demand.
International Defense Players
International companies, particularly European defense contractors, demonstrated robust performance driven by regional security priorities:
Thales (HO.PA): Defense sales reached €2.685 billion (up 16.5% YoY), though order intake declined 58% due to an exceptionally high comparison base from Q1 2024’s large contracts (Indonesian Rafale, Middle East air surveillance). Five major contracts worth €707 million were secured, including Dutch defense simulator modernization and French SCORPION program vetronics.
Saab AB (SAAB.ST) demonstrated strong performance particularly in the European market, driven by evolving regional security priorities. The company reported increased orders across all segments, with notable contracts from Latvia for RBS 70 air defense systems and Germany for ground-based surveillance radars. Order backlog grew 8% year-over-year to SEK 152 billion, with international markets representing 67% of new orders. Defense segment revenue increased 13% year-over-year while operating margins expanded.
Rheinmetall AG (RHM.DE) delivered exceptional results with defense sales growth of 33%, reaching €1.795 billion. Defense EBIT surged 96% year-over-year to €206 million, resulting in a record defense operating margin of 11.5%. Defense operations now represent 78% of group sales. The company’s record €62.6 billion order book reflects successful strategies including production scalability investments, global footprint expansion, and technological innovation in next-generation air defense and infantry modernization.
Israel Aerospace Industries (IAI) provided important context with record-breaking 2024 results showing revenue of $6.11 billion (up 15%) and net income surging 55% to $493 million. The order backlog reached a historic $25 billion, with military sales comprising 85% of total revenue. The ongoing conflict environment has driven unprecedented domestic and international demand while accelerating innovation and production capabilities.
Technology and Innovation Trends
The quarter highlighted several critical technology areas experiencing accelerated development and deployment:
Artificial Intelligence Integration: Companies like Palantir demonstrated the increasing adoption of AI-powered solutions for battlefield analysis, automated military functions, and complex aerospace applications. This trend represents a fundamental shift toward intelligent, autonomous defense capabilities.
Hypersonic Systems: Kratos’s substantial hypersonic opportunity pipeline underscores the growing strategic importance of hypersonic weapons and defense systems as nations seek next-generation strike and defensive capabilities.
Unmanned Systems: Strong performance in drone and autonomous platform segments reflects the continuing evolution of warfare toward remotely operated and autonomous systems, with applications ranging from reconnaissance to combat operations.
Space and Launch Capabilities: Rocket Lab’s success in securing government launch contracts demonstrates the critical importance of assured space access for national security applications.
Post-Period Developments and Market Outlook
NATO Defense Spending Initiative
Discussions within NATO regarding substantially increased defense spending targets represent perhaps the most significant potential market catalyst. Proposals to raise spending commitments from the current 2% of GDP to potentially 3.5% on direct military spending, with an additional 1.5% on broader security expenditures (totaling 5% of GDP by 2032), would create massive, sustained demand increases across the alliance. This initiative, driven by ongoing Ukrainian conflict dynamics and U.S. pressure, would particularly benefit companies supplying conventional military capabilities, modernization programs, and advanced technologies to NATO member nations.
Regional Conflict Dynamics
The brief but intense India-Pakistan conflict in early May 2025, featuring the “first drone battle” between nuclear-armed nations, highlighted several critical market dynamics. The conflict underscored the operational importance of advanced unmanned systems, missile defense capabilities, and border security technologies. Both nations have increased defense allocations following the conflict, creating opportunities for companies specializing in these technologies while also highlighting geopolitical engagement risks.
Middle East Defense Commitments
President Trump’s May 2025 Middle East tour resulted in the announcement of substantial defense agreements, including a reported $142 billion defense sales package with Saudi Arabia (the largest in U.S. history) and $42 billion in weapons purchases by Qatar. These deals encompass air force advancement related primarily to Boeing (NYSE: BA), (NYSE: GA), air and missile defense (NYSE: RTX, NYSE: LMT), General Atomics (GA-ASI), maritime security, land forces modernization, and information systems (NASDAQ: PLTR). The agreements reinforce the Middle East as a critical market for advanced military capabilities and represent a significant order influx for U.S. defense contractors.
Ukraine Conflict Evolution
While discussions continue regarding potential ceasefire arrangements, the fundamental market drivers remain strong. Even if active hostilities were to pause, the need for extensive NATO and European re-stockpiling, continued modernization based on conflict lessons learned, and long-term strategic competition with Russia would likely sustain high defense spending levels. The focus might shift from immediate battlefield consumables to inventory replenishment, capability upgrades, and long-term deterrence strengthening.
Market Challenges and Risk Factors
Despite the strong overall performance, several companies face notable challenges:
Archer Aviation (ACHR) continues working through significant hurdles including regulatory and certification delays, production scaling challenges, supply chain risks, and the complexities of hybrid powertrain development while operating in a pre-revenue phase.
Supply Chain and Production Constraints: Multiple companies, including Saab, reported challenges with semiconductor lead times and the need for production line investments and workforce training to meet growing demand.
Regulatory and Certification Requirements: The increasing complexity of advanced defense systems requires navigation of evolving regulatory frameworks, particularly for new technology areas like autonomous systems and space-based platforms.
Conclusion and Outlook
The Q1 2025 defense market review reveals a sector experiencing sustained, broad-based growth driven by fundamental geopolitical and technological forces. Strong financial performances across diverse market segments, from traditional defense contractors to emerging technology providers, demonstrate the market’s robust health and growth trajectory.
Post-period developments, including potential NATO spending increases, regional conflicts highlighting technology needs, and major Middle East defense commitments, strongly suggest continued positive momentum. While challenges exist in areas such as supply chain management and regulatory compliance, the underlying drivers of increased defense spending—geopolitical risk, technological competition, and modernization imperatives—remain firmly established.
The defense market appears well-positioned for sustained growth throughout 2025 and beyond, with companies successfully positioned in key technology areas, international markets, and modernization programs likely to benefit most from the evolving security environment and increasing government commitments to defense capabilities.
This quarterly review is based on publicly available financial disclosures and market analysis through Q1 2025, with post-period developments included for a comprehensive market context.
Welcome to this week’s DefenseTech Brief from Defense-Update. This report brings you the latest developments in military technology, business, and investment opportunities, drawing on our recent articles and analysis. This week, we cover significant advancements across ground, air, and naval domains, highlighting new procurements, modernization efforts, and the increasing integration of autonomous systems. We also examine a recent geopolitical event that underscores the evolving nature of warfare and the critical role of advanced defense technologies.
Focus Shift? Autonomous Robotic Formations or Manned-Unmanned Teaming?
Following the cancellation of the Robotic Combat Vehicle (RCV) development, MQ-1C Grey Eagle UAS, and some of the AH-64D Apache squadrons, the US Army maintains its pursuit of manned-unmanned teaming (MUM-T), with initial Human Machine Integrated Formations (HMIF) planned for fielding in 2027. Development focuses on introducing common control systems for both ground and aerial robots, enabling more streamlined operability of humans and robots.
The Army’s HMIF concept envisions dismounted personnel and manned vehicles operating alongside robotic platforms serving as “wingmen” or systems capable of performing dangerous tasks, with machines making first contact with the enemy. The development includes modular, open architecture systems facilitating rapid technology integration. Control systems are being designed for integration into vehicles like the XM-30, current AMPV, and portable devices for infantry. The phased approach begins with teleoperation and progresses to greater autonomy based on field experiments and soldier feedback.
This approach represents a significant step towards modernizing ground combat, emphasizing phased autonomy and the reduction of risk to personnel. The focus on common control systems and modular architecture aims to create a flexible robotic ecosystem. Deferring larger platforms like the RCV indicates a desire to build experience with smaller systems before committing to more complex ones.
European Armored Modernization Efforts Underway
While the US Army discontinues large-scale productions of armored vehicles, European armies and armored vehicle manufacturers are scaling up manufacturing. CV-90, Boxer, Ajax/Ascod 2, and CAVS are only a few examples of the growing demand that spans all European countries, not only the largest military forces.
Greece is modernizing its mechanized forces by upgrading Leonidas AIFVs and M-113 armored personnel carriers. Israel’s Rafael and Elbit Systems have submitted competing proposals for M-113 modernization with engine upgrades, enhanced armor, and weapon systems. France has proposed selling surplus VBCI vehicles and producing new Philoctetes MK II VBCIs locally. Romania plans to purchase 246 tracked infantry fighting vehicles with bids from multiple manufacturers, emphasizing localized production and technology transfer.
Greek modernization brings legacy platforms to modern standards with comprehensive upgrades. Israeli proposals upgrade M-113s to A3 standard with improved automotive systems, armor, and weapons including 30mm turrets and SPIKE LR2 missiles. The French VBCI Philoctetes offer includes interim vehicles and local production with 40mm cannons. For Leonidas upgrades, EODH and Valhalla propose remote weapon stations and enhanced protection. Romania’s acquisition is driven by the need to strengthen NATO’s eastern flank, prioritizing industrial participation and technology transfer.
These programs demonstrate a trend toward enhancing the capabilities and survivability of armored forces in Europe. Greece’s approach balances cost and capability needs, while the emphasis on local industry participation in both countries reflects common European procurement requirements. Romania’s large-scale purchase signals significant investment in its land forces.
The 407 kg Naval Strike Missile (NSM) uses a low-observable design to minimize its radar signature, through the use of low-observable shapes made of composite materials, eliminating detection from long range. Photo: Raytheon
Denmark Bolsters Coastal Defense with Naval Strike Missiles
Denmark is strengthening its naval capabilities by acquiring Kongsberg’s Naval Strike Missile (NSM), considering reactivation of coastal defense batteries, and boosting the anti-ship capabilities of its Iver Huitfeldt-class frigates. This acquisition replaces older Harpoon missiles and supports Denmark’s plan to expand its naval capacity.
The NSM acquisition represents a significant upgrade for the Royal Danish Navy, providing advanced anti-ship capabilities. Reactivating coastal defense batteries with NSMs indicates a focus on area denial and maritime approach control. Utilizing the same missile system on both coastal batteries and frigates provides operational flexibility while supporting Denmark’s naval expansion plans.
Denmark’s decision underscores a clear intention to strengthen anti-ship capabilities and maritime area control, consistent with the broader European trend of investing in modern coastal defense systems. Platform integration across land and sea offers strategic advantages.
Airbus US is developing an autonomous, unmanned variant of the UH-72 Lakota helicopter designated MQ-72C. This ‘Logistic Connector’ is being developed for the USMC, which implements ShieldAI’s Hivemind. Photo: Airbus US
Advancements in Autonomous Aerial Logistics
Airbus U.S. and Shield AI are integrating Hivemind autonomy software into the UH-72 Lakota helicopter, creating the MQ-72C Logistics Connector capable of autonomous operations without GPS, communications, or human input. This supports the Marine Corps’ Aerial Logistics Connector program. Concurrently, Airbus pursues various European autonomy projects, including the VSR700 tactical UAS and advanced cockpit automation research.
The MQ-72C initiative aims to provide resilient supply lines for distributed operations in challenging environments. Hivemind enables autonomous flight without reliance on GPS or communications, addressing electronic warfare vulnerabilities. This transforms a conventional helicopter into an autonomous aircraft. Airbus’s European projects include the VSR700 for naval missions and Clean Sky 2 research for civil aircraft cockpit automation. European autonomy programs like the Next Generation Rotorcraft Technologies (ENGRT) project focus more on foundational technologies for systems beyond 2030.
The MQ-72C represents a rapid application of advanced autonomy for contested logistics, contrasting with Airbus’s broader European projects spanning civil and military domains. The U.S.-Shield AI collaboration leverages commercial expertise and rapid prototyping, with GPS-independent operation providing significant advantages in modern warfare scenarios.
The UK’s Military Aviation Authority has issued a Military Type Certificate to the Royal Air Force’s Protector RG Mk1 uncrewed aircraft (the UK version of General Atomics ASI MQ-9B). Photo: GA-ASI
Progress in RPAS Airspace Integration
The UK’s Protector RG Mk1 (MQ-9B) has received certification to operate without geographic restrictions, including flying over populated areas. The German Heron TP has completed cross-border and upper-airspace flights, while the Swiss Hermes 900 Starliner has received dual military and civilian certification. European regulatory bodies are working to enable the full integration of large RPAS into general air traffic.
The Protector certification marks a landmark achievement, allowing a large RPAS to operate in the same airspace as manned aircraft. The German Heron TP’s test flights refine procedures for RPAS integration, though it doesn’t yet have unrestricted flight rights across Europe. The Hermes 900’s dual certification allows civilian airspace operation. EDA and EASA efforts aim to eliminate special mitigation measures for large RPAS.
These developments show that regulatory and technical hurdles to integrating military RPAS into civilian airspace are being systematically addressed. The NATO STANAG 4671 standard serves as a key benchmark. Successful integration is crucial for routine deployment without requiring segregated airspace, though complete integration remains an ongoing effort.
The RAF Stormshroud employs Tekever’s AR3 drone carrying Leonardo BrightStorm EW payload on Suppression of Enemy Air Defense (SEAD) missions. Photo: RAF
The UK has introduced the StormShroud unmanned aerial decoy for Suppression of Enemy Air Defences (SEAD), based on the Tekever AR3 UAS with Leonardo’s BriteStorm electronic warfare payload. The system is ground-launched and parachute-recovered, with Tekever announcing significant UK defense investment.
StormShroud provides the RAF with SEAD capability using a proven UAS platform. The ground-launched, parachute-recovered system favors endurance and simple deployment by small teams. Leonardo’s BriteStorm payload offers stand-in jamming and deception capabilities designed for small UAVs and attritable platforms. Importantly, BriteStorm is platform-agnostic and capable of integration into various systems. Tekever’s investment strengthens the UK-Portugal defense technology partnership.
StormShroud with BriteStorm gives the RAF specialized electronic warfare and SEAD capabilities. The platform-agnostic payload increases utility across various uncrewed systems. The focus on an attritable platform accepts potential system loss during high-risk missions, an important capability in contested environments where air defense systems pose significant threats.
US Marine Corps Embraces Loitering Munitions with OPF-L Program
The US Marine Corps’ Organic Precision Fires-Light (OPF-L) program aims to equip infantry battalions with loitering munitions, including AeroVironment’s Switchblade 300 and a reusable VTOL munition from Teledyne FLIR. The program began in September 2023, with the first systems for evaluation scheduled in early 2026. OPF-L supports the USMC’s Force Design 2030 initiative.
OPF-L increases small-unit lethality and reduces reliance on external fire support. The battle-proven Switchblade 300 provides precision-guided strike capability at battalion level, while reusable systems offer mission flexibility. The program is explicitly linked to Force Design 2030, reflecting the Marine Corps’ shift toward distributed operations and incorporating lessons from recent conflicts. This initiative includes force structure changes, training, and new military occupational specialties.
OPF-L represents a major doctrinal and technological shift for USMC infantry, providing organic precision strikes at lower echelons supporting dispersed, self-reliant units. Multiple vendors and system types create a complementary capability mix, with rapid fielding timelines underscoring urgency.
Replicator 2: Scaling Autonomous Systems and Counter-Drone Tech
The Replicator initiative aims to rapidly acquire thousands of attritable autonomous systems. Replicator 1 focused on multi-domain autonomous systems, while Replicator 2.0 targets Counter-small UAS (C-sUAS) with low collateral damage capabilities. The initiative uses the Defense Innovation Unit’s Commercial Solutions Opening process to involve non-traditional companies. Systems include loitering munitions, uncrewed vehicles, electronic warfare systems, and AI-enabled detection technologies.
Replicator 1 counters China’s military buildup with mass quantities of low-cost autonomous systems. Replicator 2 addresses the growing threat of small drones, minimizing risks in complex environments. The CSO acquisition process bypasses traditional procurement bottlenecks. Replicator encompasses a portfolio including Switchblade 600 loitering munitions, AI for data processing, swarms management, and open system architectures. Allied participation demonstrates willingness to leverage international R&D.
Replicator represents a transformative DoD effort prioritizing speed, scale, and autonomy. The pivot to C-sUAS highlights the critical drone threat and need for scalable countermeasures. Non-traditional acquisition methods and broader industry engagement reflect fundamental shifts in defense procurement strategy.
India-Pakistan Conflict (May 2025): A Case Study in Modern Warfare
The week of May 5th-11th, 2025, saw rapid escalation to multi-domain conflict between India and Pakistan, including aerial combat, missile strikes, drone warfare, artillery duels, and cyber activities. India launched “Operation Sindoor” while Pakistan responded with “Operation Bunyan al-Marsus.” A US-mediated ceasefire faced immediate violations. Pakistan claimed cyberattacks against Indian domains, satellites, and government servers, while India released images of an allegedly Pakistani Turkish-made loitering munition.
This brief conflict demonstrated the operational integration of modern military technologies. Both sides employed missile strikes from standoff range, with India reportedly targeting terrorist infrastructures and military sites using cruise missiles, drones, and guided aerial weapons inside Pakistani areas. Pakistan claimed interception of five Indian fighter planes inside Indian territory, using Beyond Visual Range (BVR) air/air missiles, particularly Chinese PL-15 air/air missiles used in combat for the first time.
The conflict demonstrated the effectiveness of India’s multi-layered Air Defense network. These air defenses were employed primarily against Pakistani attacks by ballistic missiles, rockets, and drones. At the same time, across the border, Pakistan’s combat air defense relied on a massive deployment of fighter aircraft to repel the Indian attacks. However, this massive counter-air campaign failed to defeat the air-launched and ground-launched cruise missile attacks launched by the Indian side, allegedly at terror infrastructure and, later, early warning and air-base targets.
Drone warfare was prolific, with India and Pakistan claiming to have shot down dozens of Pakistani drones without providing clear evidence of such numbers. Pakistan’s claimed offensive cyber operations introduced non-kinetic attacks targeting critical infrastructure, causing disruption and outages in power services in Northern India. The rapid escalation highlighted volatility between these nuclear-armed states.
This conflict illustrates that modern conflicts are likely to be multi-domain, involving conventional, unmanned, missile, and cyber capabilities. The extensive use of drones validates the urgent focus on C-sUAS technologies. Claimed cyberattacks demonstrate the expanding attack surface in contemporary warfare, while rapid escalation underscores the importance of crisis management mechanisms and advanced defense capabilities.
KNDS displayed at DEFEA 2025 the VBCI AFV dubbed "Philoctetes", modified to fit Greece's requirement for protected mobility and firepower for its infantry.
While the United States Army continues to slow down and discontinue acquisitions of armored vehicles such as the Armored Multi-Purpose Vehicle (AMPV) and Joint Light Tactical Vehicle (JLTV), European nations are aggressively moving forward with procurement and modernization programs for hundreds of armored fighting vehicles. This shift highlights diverging priorities in military spending and force structure development between the US and its European allies.
European Rely on Domestic Suppliers
The contrast between US and European acquisition strategies has become increasingly apparent. Even as Ukraine reportedly stands ready to commit to purchasing AMPV vehicles from BAE Systems to help sustain production lines that the US military is scaling back, multiple European nations are simultaneously launching or accelerating their own armor modernization initiatives.
These programs have evolved into comprehensive modernization plans spanning hundreds of combat vehicles that often include significant domestic industrial participation, technology transfer arrangements, and long-term sustainment strategies. Among these are various variants of the ASCOD II and Piranha 5 from GDELS, thousands of KF41 Lynx from Rheinmetall, various types of BAE System’s CV90s, and Polish Borsuk to be produced by the local company HSW, as well as CAVS 6×6 APCs, acquired under a joint procurement of four European countries. Upgrading and manufacturing of Main Battle Tanks include the latest Leopard 2A8 and new Rheinmetall KF-51 Panther tanks and future MGCS, currently on the drawing boards in Germany and France. US-made combat vehicles are almost absent from this race, as European countries tend to rely on local suppliers for their combat systems. Three countries that are about to invest billions of Euros in new AFV programs are Greece, Netherlands, and Romania.
Israeli companies Rafael and Plasan have displayed a Greek Army M-113 modified to carry more armor and mount the Samson 30 weapon station with two canister launchers for Spike 2MR guided missiles. This version is one candidate for the Greek army’s M-113 upgrade. Photo: Defense-Update
Greece’s Comprehensive Armor Modernization
Greece represents one of the most ambitious cases of armor modernization in Europe today. The Hellenic Armed Forces are pursuing multiple parallel tracks to modernize their mechanized infantry capabilities, with a focus on enhancing protected transport, mobility, protection, and firepower.
M-113 Modernization Proposals
A cornerstone of the Greek modernization effort involves upgrading their fleet of aging M-113 armored personnel carriers. At least two Israeli companies—Rafael and Elbit Systems—have submitted competing proposals for this program through government-to-government channels.
Rafael’s proposal, showcased at the recent DEFEA 2025 exhibition, involves modernizing between 300-500 M-113s in collaboration with Greek company METKA. Their prototype features a remotely controlled Samson 30 turret housing a 30mm Bushmaster cannon coupled with Spike LR2 missile launcher capability. The modernization package also includes enhanced armor protection, a new more powerful engine to handle the added weight, and comprehensively upgraded electronic communications systems to meet contemporary battlefield requirements.
Rafael has committed to establishing a production line in Magnesia, with METKA handling local assembly, manufacturing, and integration tasks.
Elbit Systems has countered with its own proposal based on established M-113 upgrade programs it has implemented for other international clients. Their upgrade would transform the M-113A1 into A3 configuration with comprehensive automotive system upgrades throughout the platform. The package includes a more powerful engine and improved drive systems to support the increased weight and operational demands of the modernized vehicle. Central to the upgrade is the integration of advanced 30mm turrets with M44 Bushmaster cannons along with SPIKE 2LR guided missile capability, significantly enhancing the vehicle’s firepower and engagement range.
Both Israeli proposals emphasize significant Greek industrial participation as a key differentiator.
KNDS’ Philoctetes was also displayed at DEFEA 2025. Photo: Defense-Update
The French “Philoctetes” Alternative
France has entered the competition with a proposal centered on the VBCI (Véhicule Blindé de Combat d’Infanterie). The French offering includes an initial delivery of 88 surplus VBCI armored infantry fighting vehicles from French Army inventory as an interim solution, followed by the production of enhanced VBCI MK I vehicles fitted with remotely controlled turrets. These vehicles would feature 40mm CTI cannons, which the French position as more modern and powerful than the 30mm Bushmaster systems offered in competing proposals. The program would eventually transition to local production of an additional 280 “Philoctetes” MK II VBCIs, creating a substantial industrial opportunity for Greece. The package is rounded out with a comprehensive ammunition supply arrangement, extensive follow-on support commitments, and potential financing options from French banking institutions to make the proposal more economically attractive to Athens.
KNDS, the Franco-German defense manufacturer, has partnered with METLEN (a METKA subsidiary) to localize production, creating an interesting competitive dynamic as METKA is simultaneously partnered with Rafael on the Israeli proposal.
Leonidas AIFV Upgrade Option
A third modernization path focuses on Greece’s indigenous Leonidas armored infantry fighting vehicles. The proposed “Leonidas 3000” upgrade centers around replacing the STEYR 7FA diesel engine with a more powerful Caterpillar C7 providing 360 horsepower and 1,254 Nm of torque. The modernization incorporates the HWS Tyr 25/30 remote-controlled weapon station from Slovenian company Valhalla, with options for either a 12.7mm heavy machine gun with coaxial 7.62mm or a repurposed Mauser MK30F 30mm cannon sourced from retired Artemis 30 anti-aircraft systems. Crew comfort and protection receive significant attention with the addition of air conditioning, comprehensive NBC protection systems, and an Auxiliary Power Unit for improved field operations. The electronic architecture is completely overhauled with a digital backbone network featuring analog-to-digital interfaces for legacy systems, enhanced crew displays, and modern battlefield information systems. Survivability improvements include synthetic add-on armor panels, spall liners to protect against fragments, and reinforced underbelly protection against the persistent mine threat. EODH Dynamics, a new subsidiary of the EODH group, displayed the Leonidas 300 at the recent DEFEA. The vehicle was displayed with a turret provided by Slovenia’s Valhalla defense company and counter-UAS system provided by SignalGeneriX, among other upgrades.
EODS Dynamics displayed the modernized Leonidas 300 APC fitted with the Nimrod 300 turret from the Slovenian company Walhalla. Another interesting system is the RFHunter, a drone countermeasure developed by the Capriot company SignalGeneriX, seen mounted at the rear. Photo: Flight.com.gr
Romania’s Major IFV Acquisition Program
Greece is not alone in pursuing ambitious armor modernization. Romania has announced plans to purchase 246 tracked infantry fighting vehicles as part of efforts to strengthen NATO’s eastern flank in response to perceived Russian threats.
Multiple platforms are under consideration for the Romanian requirement, with competitive offerings from across the global defense industry. These include the German KF41 Lynx from Rheinmetall, the British CV90 from BAE Systems, the Korean K21 Redback developed by Hanwha Defense, and the European ASCOD 2 platform that has seen service with several NATO countries. Each represents different approaches to balancing firepower, protection, and mobility for modern mechanized infantry operations.
Romania’s program emphasizes technology transfer and domestic production capabilities, building on its existing experience manufacturing Piranha 5 IFVs and the upcoming production of Turkish Cobra II light armored vehicles.
Netherlands Seeking Combat General Purpose Vehicles
The Dutch Armed Forces are also advancing procurement plans for 100-150 “Combat General Purpose Vehicles” (CGPVs) to support their 43rd Heavy Mechanized Brigade. Implementation is expected between 2029 and 2031.
The Dutch procurement requirements specify Military Off The Shelf (MOTS) platforms to minimize development risk and accelerate fielding. The most likely candidates include the ACSV G5 from Germany’s FFG Flensburger Fahrzeugbau GmbH, which the Dutch already operate in air defense and missile carrier variants, as well as the BAE Systems CV90, which currently serves in Dutch inventory as both a troop carrier and armored infantry fighting vehicle. The familiarity with both platforms would offer significant logistical and training advantages if either were selected.
Analysis: Diverging Transatlantic Priorities
These European procurement initiatives highlight a significant shift in defense priorities between the United States and its European allies. While the US Department of Defense has increasingly focused on high-end capabilities for great power competition—sometimes at the expense of legacy platforms like the AMPV and JLTV—European nations appear to be doubling down on traditional armored capabilities.
This divergence likely reflects differing threat perceptions, with European nations more immediately concerned about conventional land warfare scenarios on the continent. The continuing conflict in Ukraine has reinforced the enduring importance of armored vehicles in modern warfare, prompting these modernization efforts.
For defense contractors, particularly those with significant armored vehicle portfolios, these European programs represent crucial opportunities as US funding for similar platforms diminishes. The willingness of companies like BAE Systems, Rafael, Elbit Systems, and KNDS to pursue competitive industrial partnerships demonstrates the strategic importance of these programs to the global defense industrial base.
As the US continues to reassess its own force structure priorities, these European modernization programs may ultimately influence future Pentagon decisions about the role and importance of armored vehicles in future conflicts.
At this year’s DEFEA defense exhibition in Athens, Rheinmetall showcased the latest evolution of its Squad Support Weapon, the SSW40, a semi-automatic magazine-fed grenade launcher that bridges the gap between traditional 40mm launchers and precision squad-level support weapons. The version on display represents a significant step forward since the system’s previous public appearance at DSEI 2023.
From Concept to Combat-Ready
Originally introduced as a concept demonstrator, the SSW40 has matured into a fully functional platform designed to fire both low-velocity (LV) and medium-velocity (MV) 40mm grenades. The upgraded configuration features several enhancements aimed at improving accuracy, versatility, and combat effectiveness.
With an effective range of 250 meters for LV grenades and 600 meters for MV, the weapon gives infantry units a significant reach advantage. In comparison, its maximum range extends up to 900 meters, depending on the ammunition type. Rheinmetall has engineered the weapon to deliver consistent firepower while maintaining manageable recoil and mobility—essential for dismounted units.
The buttstock uses an active recoil compensation to soften the load and enable firing the MV grenades from the shoulder. Photo: Defense-Update
Magazine-Fed Firepower
A distinguishing feature of the SSW40 is its magazine-fed system, setting it apart from single-shot or revolving-cylinder launchers. Two magazine configurations are available, allowing for three or five-round capacities. With one round chambered and a three-round magazine inserted, the fully loaded weapon weighs approximately 6 kilograms—well within the acceptable load for infantry operations. Weight savings were achieved through innovative engineering, which is reflected in the ‘open barrel’ design. Range setting has also been simplified with a single dial setting for ammunition type and range.
Grenades that are longer than the magazine size are loaded manually. Photo: Defense-Update
Dual-Sighting and Fire Control System Integration
The version displayed at DEFEA was fitted with dual sighting systems: a standard optical sight and an advanced Fire Control System (FCS), which is currently under development. The FCS features a red-dot reticle that dynamically adjusts to reflect real-time range compensation based on data from a built-in laser rangefinder. The FCS improves first-round hit probability by automatically modifying the aim point, especially at extended ranges or against moving targets.
SSW40 uses a standard sight and an FCS with a laser rangefinder and red dot pointer. The dial between the sights provides ammunition type and manual range setting. This unit is already prepared to support the IR fuze setting of Airburst grenades. Photo – Defense-Update.
Programmable Airburst Grenade Development Underway
Rheinmetall is also developing a programmable airburst grenade optimized for use with the SSW40. Designed to engage defilade targets or enemies under cover, this munition will receive electronic fuze-setting commands via an infrared link immediately after exiting the barrel. Integrating this feature with the FCS promises to extend the SSW40’s effectiveness in complex operational environments.
Market Outlook
According to Rheinmetall officials, the company is preparing to conduct live demonstrations of the SSW40 for international customers in the coming month. These trials will focus on the system’s compatibility with standard 40mm grenades, with programmable munitions expected to follow later in the development cycle.
The SSW40 is positioned to fill a growing capability gap in modern infantry squads, offering enhanced lethality with precision engagement and a greater standoff range than legacy grenade launchers. Its integration of fire control and programmable munitions reflects the broader industry shift toward networked, smart-enabled infantry weapons.
The defense technology landscape continues to evolve rapidly, with this week’s developments highlighting several interconnected trends that present significant investment opportunities across multiple domains. Current geopolitical tensions and ongoing conflicts are accelerating the adoption of next-generation capabilities, particularly in the areas of autonomous systems, cost-effective unmanned platforms, advanced protection technologies, and extended-range strike options. Another review covering the recently announced Army reform has been published.
Investment Outlook
The defense sector continues to demonstrate resilience against broader economic uncertainties, supported by increasing global defense budgets and accelerated modernization timelines. The trends highlighted in this week’s report indicate sustained demand across multiple technology domains, with particular strength in autonomous systems, protection technologies, and long-range strike capabilities.
Key investment considerations include:
Balancing established primes with specialized technology providers to capture program-of-record revenue and disruptive innovation potential.
Geographic diversification across U.S., European, and Asian defense manufacturers to benefit from regional procurement priorities and industrial participation requirements.
Attention to development timeframes and technical risk, particularly for advanced programs like hypersonic weapons.
Focus on companies demonstrating effective supply chain management in the current constrained industrial environment.
Consideration of dual-use technologies where commercial applications can provide additional growth vectors beyond defense budgets.
The coming quarters should provide greater clarity on procurement timelines for several major programs discussed in this report, potentially creating attractive entry points for long-term investors in the companies best positioned to execute these opportunities.
The U.S. Army has embarked on one of its most consequential restructuring efforts in decades, slashing legacy systems, reorganizing commands, and accelerating the development of technologies aligned with peer-level warfare. Announced as part of the “Army Transformation and Acquisition Reform” initiative, the reorganization reflects a stark pivot toward long-range precision fires, tactical autonomy, and streamlined force structures aimed at future high-end conflict.
This strategic realignment presents risk and opportunity across the defense industrial base—disrupting long-established procurement pathways while rewarding firms aligned with new doctrinal and operational imperatives.
A Break with Legacy: Program Cancellations and Reductions
At the core of the transformation is a deliberate departure from heavy investment in traditional ground combat platforms. The Army has paused or terminated multiple programs, including:
Robotic Combat Vehicle (RCV): Development halted due to uncertain operational value and software integration challenges.
M10 Booker light tank: Cancelled after early deliveries; the vehicle was deemed too heavy for its envisioned airborne role.
Stryker Combat Vehicle: No further production orders will be issued.
AMPV (Armored Multi-Purpose Vehicle): Scaled back to minimum sustainment rates.
Artillery Modernization: Terminating further evaluation of foreign self-propelled artillery.
JLTV: Slowed procurement
These decisions reflect an institutional reassessment of armored vehicle utility in contested environments where survivability and electronic vulnerability are growing concerns. However, the realignment doesn’t address the need for protected mobility of heavy, mechanized, or Stryker Brigade Combat Teams (SBCT), primarily regarding new assets such as air defense, counter-UAS, mortars, and weapons carriers.
Acceleration of Priority Capabilities
In parallel with these cuts, the Army is fast-tracking select modernization programs:
XM30 Mechanized Infantry Combat Vehicle: The replacement for the Bradley IFV is under accelerated development, though the final selection is pending—likely around 2027.
M1E3 Abrams MBT: General Dynamics Land Systems (GDLS) will benefit from the acceleration of this next-gen main battle tank, focusing on reduced weight, modular protection, and electronic warfare resilience.
Future Long-Range Assault Aircraft (FLRAA) – the program is a centerpiece of the service’s aviation modernization strategy. The realignment plan prioritizes modernization programs that provide operational overmatch and future-readiness, and the V-280 is cited as a key example of this approach, with continued funding and programmatic momentum.
Long-Range Fires: A top modernization priority, with a focus on:
Precision Strike Missile (PrSM) Increments 4 and 5
Medium-Range Ballistic Missiles (MRBMs), including anti-ship variants
Expansion of missile basing in Europe (e.g., reactivation of the 56th Artillery Command) and deployment of the Typhon system in the Philippines
These capabilities directly support Indo-Pacific and European deterrence objectives and represent the Army’s effort to reclaim relevance in strategic fires.
Drone Warfare and Tactical Disruption
One of the most transformative elements is the institutionalization of drone warfare at the tactical level:
Mandated Fielding: Every division must field drones by 2026. A thousand drones per division was mentioned.
Counter-UAS: Affordable, scalable C-UAS solutions will be integrated at platoon and company levels by 2027.
Tactical Loitering Munitions: Growing emphasis on modular, AI-enabled, one-way attack (OWA) drones for distributed strike. Ongoing programs, including Launched Effects and Replicator, are expected to excel.
While some in Congress proposed a dedicated “Drone Corps,” Army leadership opted for integrated experimentation—developing deployable drone warfare elements within brigades and divisions.
This distributed model allows rapid feedback loops and doctrinal adaptation, with historical analogies drawn from the early development of tanks and machine guns.
Rotary-Wing Aviation: Consolidation and Disruption
Aviation modernization is another area undergoing major shifts:
Bell V-280 Valor: Selected as the Future Long-Range Assault Aircraft (FLRAA), offering extended range and speed over the UH-60. Bell Textron (NYSE: TXT) is well-positioned to lead production and support decades of procurement.
MQ-1C Grey Eagle Termination: This is a major blow to General Atomics as the Army pivots away from large ISR drones toward low-cost, autonomous, and Attritable systems.
Apache Cuts: The deactivation of several AH-64D battalions signals a declining emphasis on manned attack helicopters unless offset by upgrades or international sales.
Structural Reorganization and Sustainment Reform
Secretary Hegseth’s reform memo outlines a series of force structure and sustainment changes:
Command Mergers: Army Futures Command and TRADOC will consolidate under a new four-star command based in Texas.
Reduction of Generals: Streamlining leadership to enhance agility.
Industrial Base Expansion: With congressional support, the Army aims to make a new missile production and sustainment infrastructure fully operational by 2028.
Right to Repair: Mandated reforms in contractor agreements to allow field-level maintenance and spare part production, including 3D printing.
Risks, Oversights, and Strategic Gaps
Despite its forward-looking scope, the restructuring carries risks:
Implementation Gaps: The pace of change, especially in drone doctrine and sustainment, may outpace the Army’s ability to train, test, and integrate.
Industrial Bottlenecks: Missile production lines remain constrained, and rapid expansion will test contractor capacity.
C-UAS, offset by a reduction in Vehicle electronics
❌ At Risk
Company
Sector
Exposure
General Dynamics Land Systems (GD)
Ground combat vehicles
Losses in Stryker, Booker;
offset partially by M1E3 development
General Atomics
Large UAS
MQ-1C Grey Eagle cancellation
AM General
JLTV
Slowed production
BAE Systems
AMPV
Program cancellations and reduced orders
Kongsberg Defense
RWS
Program cancellations and reduced orders for Stryker, AMPV
Boeing (BA)
Attack helicopters
Declining Apache relevance unless mitigated by export
Conclusion: A Force Rebuilt for Future Wars
The U.S. Army’s 2025 transformation marks a decisive break from legacy structures and systems. In its place is a leaner, more modular force built for high-end conflict—leveraging autonomy, long-range precision, and a restructured command model.
While this shift opens doors for agile tech providers, it challenges entrenched defense primes. For investors, the path forward demands careful alignment with evolving Army priorities, technological feasibility, and geopolitical realities. In this reimagined battlespace, speed, survivability, and strike range have become the Army’s new watchwords—and industry’s new battleground.
This week’s DefenseTech Brief explores the U.S. Army’s sweeping transformation plan—canceling legacy ground systems, accelerating missile and drone capabilities, and consolidating command structures. The move signals a shift toward high-end conflict readiness, with profound implications for defense manufacturers, suppliers, and investors. Our feature breaks down key winners and at-risk contractors, including the rise of missile production, drone integration, and the industrial challenges ahead.
📈 Featured: Army’s pivot to long-range precision fires, drone warfare, and next-gen platforms 📉 Impacted: Legacy platforms like Stryker, Booker, Apache, and MQ-1C Grey Eagle
(Read the updated analysis)
HX-2 and Resilience Factories have been designed with high throughput and scale from the outset. Photo: Helsing
Recent conflicts show a fundamental shift in how air power works. Mass-produced, affordable drones and loitering munitions are creating significant advantages for both state and non-state actors while imposing challenging cost-exchange ratios on defenders using expensive interceptors. (read the article)
Key Technologies Driving Change:
3D printing enables faster component manufacturing
AI systems allow autonomous operation and coordinated swarming
Modular architectures provide adaptability for different missions
Ukraine’s distributed manufacturing approach demonstrates the importance of production scale and operational resilience against countermeasures.
Impact Assessment: This shift is forcing a rethink of traditional air defense doctrines. Military planners are moving toward multi-layered defenses combining electronic warfare, directed energy weapons, and specialized counter-drone capabilities. The economic imbalance in these engagements creates urgency for cost-effective countermeasures.
Market Outlook: Companies specializing in low-cost UAS manufacturing, AI for autonomous functions (Anduril, Helsing, Stark Defence, Xtend Defense), counter-drone technologies, and modular subsystems are well-positioned. Established players like IAI, Rafael, AeroVironment, and KNDS are adapting their portfolios, while newer entrants like Firestorm Labs and Cummings Aerospace focus on innovative manufacturing approaches.
Autonomous Multi-domain Launcher (AML) undergoing firing tests at Yuma Proving Ground in April 2024. Photo: US Army
Artillery crews’ vulnerability on modern battlefields is accelerating the shift toward automated and autonomous fire support systems. This trend aligns with emerging operational concepts requiring distributed, resilient firepower delivery. (Read the article)
Current Developments:
Automated turret systems reducing crew sizes (Hanwha K9A2, KNDS RCH155)
Fully unmanned platforms (USMC NMESIS, Army AML)
Integration of robotics, AI navigation, and secure communications
Manned-Unmanned Teaming frameworks
Ammunition resupply automation remains a key area for future development.
Impact Assessment: Autonomy in artillery is moving rapidly from concept to implementation, driven by operational lessons from modern conflicts. The ability to deploy significant firepower in contested areas with minimal human exposure could transform land warfare doctrine. While full autonomy presents challenges in command and control, cybersecurity, and logistics, even partial automation is already improving survivability and potentially enhancing fire rates.
Market Outlook: Companies developing unmanned ground vehicles (Oshkosh), autonomous control systems (Lockheed Martin), advanced artillery platforms with automation features (Hanwha Defense, KNDS, Elbit Systems, Norinco), and robotic ammunition handling systems are central to this trend. AI integration for targeting assistance and autonomous execution represents a key value proposition.
Following the INF Treaty’s termination, the US is developing new conventional theater-range missile systems to counter adversary A2/AD strategies. (Read the article)
Program Portfolio:
Army: Long-Range Precision Fires initiative including fielded Typhon system, Precision Strike Missile (PrSM), and hypersonic Long-Range Hypersonic Weapon (LRHW/”Dark Eagle”)
Navy: Conventional Prompt Strike (CPS) hypersonic program for Zumwalt-class destroyers and Virginia-class submarines
Air Force: Hypersonic Attack Cruise Missile (HACM)
These programs support broader operational concepts like Multi-Domain Operations, with Multi-Domain Task Forces and planned Theater Fires Commands as implementation vehicles.
Impact Assessment: The US is undertaking a comprehensive, multi-service approach to restore and enhance conventional long-range strike capabilities. The strategy combines the rapid fielding of adapted systems (Typhon) with the longer-term development of advanced hypersonic technologies. While hypersonic programs promise unique operational advantages, they continue to face technical challenges and potential schedule delays.
Market Outlook: Major defense contractors, including Lockheed Martin, Raytheon Technologies, and Northrop Grumman, maintain significant involvement in missile development, hypersonic research, and C4ISR systems. L3Harris leads in space-based sensors, while multiple primes contribute to missile defense programs. Investment considerations should account for extended development timelines and inherent technological risks in advanced programs.
Evolving anti-armor threats drive widespread adoption of Hard-Kill Active Protection Systems (APS) for vehicle survivability. (Read the article)
Mature Systems Entering Service:
Rafael’s Trophy: Using EFP interceptors, combat-proven in multiple conflicts
Elbit’s Iron Fist: Employing blast-fragmentation interceptors for reduced collateral effects
Russia’s Arena-M: Focused on defending against top-attack threats
Turkey’s AKKOR/PULAT systems: Domestic capability development
China’s GL-6: Features high-elevation intercept capability
Rheinmetall’s StrikeShield: Integrating components within hybrid armor
National development programs are also advancing in South Korea (KAPS) and India (DRDO).
Impact Assessment: APS technology has reached significant maturity and has been influenced by observations from Ukraine and other conflicts. System diversity reflects different operational philosophies and threat priorities. Challenges remain in integration complexity, cost considerations, size/weight/power constraints, and effectiveness against evolving threats like coordinated swarms and hypersonic weapons.
Market Outlook: Key industry participants include Rafael (partnered with Leonardo DRS and EuroTrophy), Elbit Systems, Rheinmetall, Aselsan, KBM, Norinco, and Hanwha Systems. The APS market is experiencing rapid growth as nations equip new and existing vehicle fleets. Companies providing advanced sensors, high-speed processors, novel interceptor technologies, and systems integration expertise are well-positioned.
India has concluded an Inter-Governmental Agreement with France for 26 Dassault Rafale M fighter aircraft (22 single-seat, 4 trainer variants) for the Indian Navy. The aircraft will primarily serve aboard the INS Vikrant aircraft carrier, replacing the aging MiG-29K fleet. (Read the article)
Deal Highlights:
Comprehensive package including weaponry, training, and logistical support
Provisions for upgrading India’s existing Air Force Rafale fleet
Deliveries scheduled between mid-2028 and 2031
Engineering challenges with Rafale M dimensions relative to Indian carrier elevator systems
Transfer of Technology provisions supporting India’s self-reliance objectives
Impact Assessment: This acquisition provides the Indian Navy with a necessary capability enhancement while awaiting the indigenous Twin Engine Deck-Based Fighter (TEDBF). The Rafale M offers substantial improvements over the MiG-29K in sensors, electronic warfare, and armament capabilities, with additional logistical benefits from commonality with the IAF fleet. The elevator compatibility issue presents a notable operational constraint requiring effective mitigation strategies.
Market Implications: Dassault Aviation is the primary beneficiary, alongside key suppliers Thales, Safran, and MBDA. Local MRO and production capabilities will benefit Indian industrial partners like HAL and private sector firms. Indigenous weapon developers such as BDL will participate in integration efforts.
SpearUAV’s Viper 300 loitering weapon is contained in a launch cylinder that can be attached to the turret side, launch the attack drone automatically, control its mission under the armor, and be reloaded manually by the crew. On the right, a UAV interceptor variant is displayed. Photo: Defense-Update
The Israeli Ministry of Defence is evaluating proposals for integrating loitering munition systems onto Merkava 4 main battle tanks, responding to operational lessons from urban combat. (Read the article)
Program Objectives:
Provide tank crews with organic beyond-line-of-sight reconnaissance
Enable immediate engagement of concealed threats
Enhance situational awareness without external assets
Deliver precise firepower inherent to the platform
Impact Assessment: This integration represents a logical evolution for armored warfare, particularly in complex urban environments. By providing autonomous reconnaissance and strike capabilities, it reduces dependence on external assets and shortens the engagement cycle for proximate threats.
Market Outlook: Israeli firms specializing in loitering munitions (UVision, Aeronautics Group, potentially Rafael and Elbit) are considered likely candidates. This initiative may drive further innovation in miniaturized, ruggedized systems optimized for vehicular integration, potentially creating export opportunities.
India Tests Barak MRSAM Air Defense System
India has successfully conducted operational tests of the Barak MRSAM (Medium Range Surface-to-Air Missile) system from both naval (INS Surat) and land-based platforms. The system represents a joint development between Israel’s IAI and India’s DRDO.
System Capabilities:
Integrated defense against various aerial threats
Operational range up to approximately 70 kilometers
Advanced radar and command & control systems
Mobile launcher configurations
Impact Assessment: These successful trials confirm the operational readiness of the MRSAM system across multiple branches of the Indian military, establishing it as a crucial component of India’s layered air defense architecture. The joint development nature highlights the strategic defense partnership between India and Israel.
Market Implications: IAI serves as the lead Israeli partner, while Indian collaborators include DRDO and manufacturers under the ‘Make in India’ initiative (BEL, BDL). Continued program success and potential follow-on orders would benefit these participating entities.
Conclusion: The Evolving Defense Landscape
The defense technology sector continues its rapid transformation, driven by conflict observations and strategic competition. Low-cost autonomous systems are reshaping battlefield dynamics across domains while autonomy increasingly becomes essential for survivability and effectiveness. Major powers invest heavily in next-generation strike capabilities, particularly hypersonic technologies, while protection systems evolve to counter increasingly sophisticated threats.
The prevailing trend points toward systems characterized by greater intelligence, numerosity, autonomy, and resilience across all operational domains—presenting both challenges and opportunities for defense planners and industry participants alike.
Conventional Prompt Strike (CPS) - pursues a common hypersonic missile that is being developed in partnership with the U.S. Army. Photo: DOD
Last week, the U.S. Navy’s Strategic Systems Programs (SSP) reached a significant milestone in the development of its sea-based hypersonic capability with a successful end-to-end flight test of the ‘Dark Eagle’ conventional hypersonic missile at Cape Canaveral Space Force Station, Florida. This test demonstrated the Navy’s innovative cold-gas launch approach, crucial for the Conventional Prompt Strike (CPS) system that will be deployed on Navy platforms.
This flight test is part of the ongoing program for the common All Up Round (AUR) missile, a collaborative effort with the U.S. Army’s Rapid Capabilities and Critical Technologies Office. Notably, the ‘Dark Eagle’ missile will be fielded to both the Navy and the Army, equipping the Army’s Multi-Domain Task Forces (MDTF) as well. Two additional successful end-to-end flight tests of the AUR were conducted in 2024. The cold-gas launch system allows the safe ejection of the missile from naval vessels before its engine ignites.
U.S. Navy Strategic Systems Programs conducted a cold-gas launch of a conventional hypersonic missile on the path to Navy fielding in Cape Canaveral, Fla. The common hypersonic missile is being developed in partnership with the U.S. Army.
Vice Adm. Johnny R. Wolfe Jr, Director of SSP, highlighted the importance of this achievement in bringing a safe and reliable hypersonic capability to the Navy and, by extension, to the Army. The CPS program has undergone extensive testing, including the use of an In-Air Launch test facility, to validate the launch method for its initial deployment on the USS ZUMWALT. The data collected from this test will be vital for the continued development and production of the AUR and the integration of the cold-gas launch system on surface ships.
The rapid advancement of sea-based hypersonic strike weapons, like the ‘Dark Eagle’, significantly enhances U.S. deterrence and provides a crucial advantage in conventional strike capabilities for both naval and land forces. Secretary of the Navy John Phelan emphasized the speed, range, and survivability of these weapons as essential for integrated deterrence, noting their unmatched capabilities for warfighters across domains. This successful cold gas launch marks a key step towards realizing this enhanced strategic capability.
12 CPS missiles will be deployed on each of the three Zumwalt class destroyers. Photo: HII
SpearUAV's Viper 300 loitering weapon is contained in a launch cylinder that can be attached on the turret side, launch the attack drone automatically, control its mission under the armor, and be reloaded manually by the crew. The company also offers the Multi Canister Launcher (MCL) as a compact system that enables swift deployment of the Viper 300 UAS, with immediate launch from any military platform, whether manned or unmanned, in motion or stationary. Photo: Defense-Update
The Israeli Ministry of Defense (IMOD) is evaluating initial proposals from some local companies to decide what types of loitering weapon systems will be deployed on Israel’s Defense Forces (IDF) Merkava 4 main battle tank. The operational requirements match the experience gathered from the extensive operation of this MBT in the ongoing war.
The idea to equip the MBT with advanced loitering weapon systems stems from the initial experience accumulated by the IDF’ armored corps during the fighting in the highly densely populated Gaza. In the fighting in such an urban area, the tank is more vulnerable to advanced anti-tank weapons.
The initial idea is to equip the tank with special loitering weapon systems that will enable the tank commander to “see beyond the building” and, immediately after, attack the enemy using direct fire by the tank’s gun or other supporting weapons that enables indirect attack such as a loitering weapon, or another drone launched by the tank (such as the Viper 300 or 750).
Tal Inbar, a senior defense analyst, said there is an urgent operational need to enhance the crew’s situational awareness, especially the tank commander’s field of view. “a loitering weapon system with an EO payload will allow the tank commander to locate hidden threats and destroy them in real-time. This is needed in very high priority.”
A number of Israeli defense companies, like Uvision, Elbit Systems, Spear UAV, BlueBirs UAS and Aeronautics, have developed advanced loitering weapon systems that are used by many countries, including the U.S. RAFAEL have already included Spear UAS’s Viper loitering weapons in their Samson 30 turret configuration displayed at the DSEI 202 exhibition.
The loitering weapon systems that will be carried by the MBT will have added capabilities to fulfill the triple task – improve situational awareness, detect and destroy the enemy.
The armored vehicle faces an ever-growing array of threats in the unforgiving calculus of modern warfare. Sophisticated anti-tank missiles, smart loitering munitions, Rocket-Propelled Grenades (RPGs), and even simple drones adapted for attack can disable or destroy heavily armored and costly tanks and infantry carriers. This reality, brought into sharp focus by the intense fighting and heavy vehicle losses seen in conflicts like the one in Ukraine, has propelled Active Protection Systems (APS) from a niche technology to a vital necessity.
Unlike passive armor, which absorbs or deflects an impact, and ‘soft-kill’ APS that uses optical or electronic countermeasures effective primarily against guided missiles, ‘hard-kill’ APS acts as an outer shield, detecting incoming threats and neutralizing them in mid-air at fractions of seconds before they strike. This article tells the story of several leading APS, exploring how they work, what makes them unique, and how they shape the battlefield defenses of today and tomorrow.
Developments of Hard Kill APS began as conceptual studies and technology demonstrations in the late 1990s in Russia, Germany, the US, and Israel. However, these systems did not mature due to their complexity, concerns of collateral damage risk, and the limited protection they could provide. These systems reached full-scale development in the first decade of the 21st century only in Israel, which selected APS to equip Israeli AFVs.
Two of the four EO+radar sensors and one of the two pedestal-countermeasure mounts are seen in the RAFAEL display of the Samson 0mm remotely controlled turret at the DSEI 2023. Photo: Defense-Update
Trophy – The Combat-Hardened APS
Born from the hard lessons of the 2006 Lebanon War, where Israeli Merkava tanks faced unexpected vulnerability, Rafael’s Trophy system emerged as a pioneering solution to protect Armored Fighting Vehicles (AFV) actively. Its first combat experience came in 2011, and since then, it has built an unmatched reputation through extensive operational use, proving its mettle in numerous engagements in the ongoing conflicts in Gaza and South Lebanon.
Trophy operates with four radar panels that constantly scan the surroundings. When a threat—be it an RPG or an Anti-Tank Guided Missile (ATGM)—is detected and deemed hostile, the system reacts instantly. One of its two rotating interceptors snaps toward the threat and fires a volley of small, Explosively Formed Projectiles (EFP). This intercept is a focused countermeasure designed to hit the incoming warhead or its fuzing mechanism directly, neutralizing it safely away from the vehicle, with minimal risk to dismounted soldiers nearby. Recognizing the evolving battlefield, Rafael has adapted Trophy to counter drone threats and top-attack missiles, ensuring this Trophy remains relevant against the most modern threats.
Its success has led to widespread adoption beyond Israel; American Abrams tanks, in partnership with Leonardo DRS. British Challenger 3s, and Germany’s newest Leopard 2A8s are all receiving its protection, with European needs handled by the EuroTrophy consortium formed by Rafael, GDELS and KNDS. Recent moves, like a 2025 agreement to explore production in India via L&T, show its continued global significance.
Iron Fist APS mounted on the IDF Eitan 8×8 wheeled armored vehicle. Photo: IDF
Iron Fist – The Flexible Defender
The Iron Fist subsystems were shown at the AUSA exhibition. Two EO+radar systems, a twin launcher, and the control system are displayed. Photo: Defense-Update.
Elbit Systems’ Iron Fist offers a different approach to the active protection of AFVs. It is a family of systems originally developed by IMI in parallel to the Trophy. Iron Fist is adaptable to vehicles ranging from lighter troop carriers to heavy tanks. Like Trophy, it uses radar and optical sensors to perceive incoming threats. However, its primary defense mechanism differs. Instead of aiming for a direct hit, Iron Fist’s trainable launchers fire an explosive interceptor that detonates near the incoming missile or rocket. The resulting shockwave is designed to knock the projectile off course, damage its aerodynamics, or prematurely detonate its warhead, all while minimizing the spray of lethal fragments that could endanger nearby infantry – a crucial consideration in urban warfare or combined arms operations. This operational concept makes it effective against elevated threats, a capability that has been proven in numerous tests.
This makes it an attractive option for vehicles like the Netherlands’ CV90 IFVs and Israel’s own Eitan APC and D9 bulldozers. It has also been selected for the South Korean Redback IFV developed for Australia. For heavier threats, the Iron Fist tackles the formidable challenge of high-speed kinetic energy (KE) penetrators – the Armor armor-piercing fin-stabilized Discarding Sabot (APFSDS) or ‘long rod’ darts fired by other tanks – by attempting to disrupt their stable flight path before the impact. After resolving some initial issues with power and integration, the US Army is fielding the system on its Bradley fighting vehicles in 2025, highlighting its counter-drone capabilities as well. A soft-kill laser jammer can also be integrated into the system.
Two modules of ARENA-M APS are mounted at the rear area of this T-72B3M tank.
Arena-M – Russia’s Answer to Direct and Top Attack
The brutal realities of the Ukraine conflict forced Russia to reassess its vehicle protection strategies. Older APS like Drozd or the new Afganit (seen on the T-14 Armata) proved inadequate against the top-attack missiles, which strike tanks where their armor is typically weakest. Enter Arena-M, developed by KBM. Selected in 2024 specifically to counter these modern threats, Arena-M takes a different architectural path as it primarily utilizes external modules that are easier to fit into different armored vehicles.
Instead of rotating launchers, it employs numerous containers arranged around the turret. These house directional fragmentation charges. When the system’s radars detect an incoming threat coming horizontally or from above, one of the charges ejects from the optimally placed container, creating a precisely aimed curtain of high-velocity fragments about six meters from the tank. The goal is to shred the incoming missile or drone before it hits. Tested against captured Western weapons like Javelins and NLAWs, Russia is now actively deploying Arena-M, with systems appearing on T-72B3M tanks in Ukraine. Models of the system were showcased at the IDEX 2025 defense exhibition in the UAE. While its battlefield effectiveness is still being assessed, its design clearly reflects Moscow’s urgent need to counter the top-attack threat that has plagued its armored forces.
ARENA-M APS system modified to fit externally to the T-72B3M. Displayed by KBM at the IDEX 2025 exhibition. Photo: Defense-UpdateAKKOR APS mounted on the Turkish Altay tank. The system features a mix of countermeasures that include soft and hard kill. Photo: Defense-Update
AKKOR – Turkey’s APS Approach
Developed by Turkey’s defense giant Aselsan, AKKOR reflects a national drive for self-sufficiency in critical defense technologies. Architecturally resembling systems like Iron Fist with its trainable launchers guided by Aselsan radar and IR sensors, AKKOR distinguishes itself through its choice of countermeasures that include soft and hard kill. This design choice prioritizes minimizing collateral damage – a key consideration for urban operations. AKKOR has undergone extensive testing against various threats (including Kornet ATGMs) and is slated for deployment on Turkey’s indigenous Altay main battle tank starting in 2025, as well as being retrofitted onto upgraded Turkish Leopard 2A4s. Its current configuration offers some capability against shallow-angle aerial attacks and drones, reflecting an awareness of these growing threats.
PULAT APS mounted on a Kaplan AFV. Photo: Defense-Update
PULAT – A Shield for Close-Quarters
Sometimes, operational needs demand immediate solutions. For Turkey, facing combat losses in Syria and while awaiting the full maturation of AKKOR, that solution came in the form of PULAT. Developed in cooperation with Ukrainian expertise and based on their Zaslon-L system, PULAT is a distinctly “close-in” defense.
It consists of several self-contained modules mounted around the vehicle. When activated, these modules, each containing a small radar and a cylindrical fragmentation warhead, stand ready for action, protruding slightly from the tank’s passive armor outline. If a threat is detected as it gets dangerously close, the module’s radar triggers its warhead, creating a localized sphere of fragments designed to neutralize the threat just meters from the hull.
Deployed since 2018 on upgraded Turkish M-60T tanks, PULAT has gained valuable combat experience in Syria and Iraq, proving itself as a robust, reactive layer of last-ditch defense. Its relative simplicity and proven effectiveness have led to wider deployment on Turkish M-60Ts (originally, the Israeli-modified Sabra) and Leopard 2A4s. Strangely, there were no reports of Ukrainian army tanks using the Zaslon system despite the extensive modifications performed on existing and imported tanks and the heavy losses suffered from Russian anti-tank missiles, artillery, mines, and drones.
GL-6 is a new Chinese APS displayed at IDEX 2025 by Norinco. Photo: Defense-Update
GL-6 – China’s APS Choice
China’s Norinco has also entered the APS arena with systems like the GL-6, an evolution of earlier designs. Like Iron Fist with its trainable launchers, the GL-6 uses a fragment-cloud kill mechanism. The system integrates four radar panels for detection and two interceptor launchers, each typically armed with two interceptors. These interceptors are designed to detonate about 10 meters from the vehicle, neutralizing threats like RPGs and ATGMs. A key feature of the GL-6 is the impressive elevation range of its launchers – capable of aiming up to 60-70 degrees. This suggests a strong inherent capability against top attack or diving threats and weaponized drones, surpassing the elevation limits of some other systems. Recent observations in 2025 show that the GL-6 is fitted not just to main battle tanks like the Type 99A but also significantly to lighter platforms like the ZBD-03 airborne infantry fighting vehicle. This indicates a concerted effort by the PLA to extend advanced protection across its forces, including rapid deployment units.
KAPS – South Korea’s Indigenous APS
South Korea began developing its own hard-kill Active Protection System, known as KAPS, in the mid-2000s, led by the Agency for Defense Development (ADD) and Hanwha Systems. Designed specifically for the K2 Black Panther main battle tank, KAPS utilizes radar and infrared trackers to identify incoming threats like RPGs and ATGMs out to 150 meters. When a threat closes to within 10-15 meters, one of the system’s two trainable launchers fires a fragmentation grenade to intercept it. The system demonstrated successful tests against RPG-7 and Metis-M missiles back in 2012. However, KAPS wasn’t integrated into the initial batches of K2 tanks entering service around 2014. Concerns about its high cost (estimated at $600,000 per unit then), potential danger to nearby infantry from its fragmentation interceptors, and possible interference with the K2’s existing soft-kill systems led to its deferral. The plan now is to incorporate KAPS into the future K2 Product Improvement Program (PIP) variant. Development work continues, with efforts reported in 2023 to enhance KAPS for urban combat scenarios, including better defense against drones, potentially at a lower cost. While export versions of the K2 often feature other APS solutions (like variants of Trophy), the original KAPS technology remains a national development, recently seen integrated on a prototype N-WAV wheeled armored vehicle in late 2023.
The Hungarian Army selected the StrikeShield hull-mounted APS for the Rheinmetall KF-41.
StrikeShield – A Hybrid Defender
Germany’s Rheinmetall offers a distinctly different approach with its StrikeShield APS, the third generation of its Active Defence System (ADS) technology. Rather than relying solely on standalone launchers, StrikeShield embodies a “hybrid” layered protection philosophy, integrating its components directly within modular armor tiles. This means the sensors and countermeasures are sandwiched between layers of passive armor, providing physical protection for the APS components while the APS elements themselves contribute to the overall ballistic integrity.
This distributed system uses low-power radar and optical sensors to detect threats like ATGMs and RPGs. When an engagement occurs, StrikeShield employs a directed energy blast countermeasure very close to the vehicle (within about 10 meters) to neutralize the incoming projectile before impact. A key advantage of this design is its extremely low electromagnetic signature due to the low-power radar, making the protected vehicle much harder for adversaries to detect electronically. Rheinmetall also stated StrikeShield addresses the challenge of defeating high-speed kinetic energy penetrators, having successfully demonstrated this concept in testing. This advanced system achieved a major success in 2021 when Hungary selected it to equip its entire fleet of 209 new Lynx KF41 infantry fighting vehicles, integrating it into the vehicle’s innovative hybrid armor tiles. The US Army has also subjected StrikeShield to extensive testing, evaluating its potential for future American armored vehicles.
India – Charting its Own APS Course
India, with its vast armored fleet, is actively pursuing APS capabilities through a dual-track approach. The Defence Research and Development Organisation (DRDO) lays the groundwork for an indigenous system. At the Aero India show in 2025, DRDO showcased developmental components, including advanced radar panels designed for long-range (4km) detection of small, stealthy targets like drones and ATGMs, aiming for near-hemispheric coverage with multiple panels. They also work on trainable launchers (4 interceptors each) for 20-50m intercepts. A full indigenous system is anticipated by the end of the decade. Simultaneously, recognizing immediate needs, India issued a formal request in early February 2025 seeking off-the-shelf APS solutions for its T-90S ‘Bhishma’ tanks. This request specifically highlighted the need to counterattack drones and loitering munitions, reflecting global threat trends. This follows earlier stalled efforts to acquire Russia’s Arena-E.
Conclusion
These diverse Active Protection Systems illustrate the recent evolution in armored warfare. From the combat-proven reliability of Trophy to the flexible defense of Iron Fist, the top-attack focus of Arena-M, the integrated hybrid approach of StrikeShield, the low-collateral design of AKKOR, the close-in shield of PULAT, the high-elevation reach of GL-6, each system reflects different requirements, technological choices, and operational priorities. What unites them is the recognition that passive armor alone is no longer sufficient. As threats become faster, smarter, and attack from multiple vectors, sophisticated, multi-layered defenses incorporating APS are essential. The ongoing integration of artificial intelligence, improved sensors, and potentially new kill mechanisms like directed energy promises even more capable shields in the future, ensuring that armored vehicles can continue to play their decisive role on the battlefield.
This week in the defense technology sector is marked by significant international partnerships, advancements in unmanned systems, and substantial investments in next-generation capabilities. From major naval contracts in the Middle East to the expansion...
This week in the defense technology sector is marked by significant international partnerships, advancements in unmanned systems, and substantial investments in next-generation capabilities. From major naval contracts in the Middle East to the expansion...
Rafael Advanced Defense Systems unveils its new IRON BEAM 450 HELWS with an upgraded laser beam director at the Paris Air Show. The system features a 450mm aperture with Coherent Beam Combining technology, enabling precision targeting of coin-sized objects beyond 10km while maintaining speed-of-light threat neutralization capabilities.
The first week of June 2025 marked significant defense technology milestones, including Ukraine's 4,300km drone strikes, Israel's operational laser weapon deployments, and major AI partnerships. Capital markets showed strong confidence with over $6 billion in investments and acquisitions, while localized manufacturing accelerated across European and Middle Eastern markets.
Barrett Firearms Manufacturing has been selected as the winner of the U.S. Army's xTech Soldier Lethality competition, securing a contract to develop an advanced 30mm precision grenade rifle system. The new system features programmable...
Hermeus Corporation achieved the first flight of its Quarterhorse Mk 1 hypersonic demonstrator on May 27, 2025. Quarterhorse Mk 1 went from a clean sheet to flight-ready in a little over a year. The...
India formally approved its Advanced Medium Combat Aircraft (AMCA) program, officially joining the fifth-generation stealth fighter market with a stealth, twin-engine advanced fighter jet.
The new development, approved by Defence Minister Rajnath Singh, will follow...
Russia’s KS-172: Strategic Aerial Sniper
Europe’s Meteor: Sustained Power with Ramjet Propulsion
Implications for Doctrine, Tactics, and Platforms
The acquisition responds to the rapid proliferation of unmanned aerial systems across the Middle East, where both state and non-state actors have employed small drones for surveillance, intelligence gathering, and kinetic attacks. Critical infrastructure—including oil and gas facilities, airbases, and seaports—faces heightened risk from low-cost, attritable UAS operations. By deploying FS-LIDS at fixed sites protecting these assets, Qatar strengthens its defensive posture against evolving aerial threats and aligns with broader regional efforts to bolster airspace security.
European Armored Modernization Efforts Underway
