BERLIN, July 12 — Rheinmetall AG and Diehl Defence are expected to manufacture 50,000 strike drones for Ukraine, according to industry sources. The deal, if confirmed, would mark one of the largest single drone procurements of the conflict and further entrench Germany’s role as a key military supplier to Kyiv. Rheinmetall, headquartered in Düsseldorf, is Germany’s largest defence contractor.
The company reported revenue of €7.1 billion in 2023. Its product line includes the Marder and Lynx infantry fighting vehicles, Leopard 2 main battle tanks, and artillery systems.
Diehl Defence, based in Überlingen, specialises in air defence systems and guided missiles. Its IRIS-T SLM system is already operational in Ukraine.
The drone package and production capacity
Neither company has issued a formal statement on the 50,000-unit figure. Officials familiar with the planning have confirmed that both firms are expected to handle production. The HX-2 loitering munition, developed by Diehl, is considered a potential candidate for the package.
Rheinmetall has already expanded its drone production capacity in recent months. The German defence industry has seen a sharp rise in orders since 2022.
Rheinmetall’s stock price has climbed by more than 200 percent over that period. The companies also benefit from a €100 billion special fund for the Bundeswehr, announced by Chancellor Olaf Scholz in February 2022. That fund was designed to modernise Germany’s armed forces after years of underinvestment.
Rheinmetall has established a joint venture with Ukraine’s state-owned defence conglomerate Ukroboronprom to produce military vehicles. That partnership is separate from the drone deal but reflects a broader trend of direct industrial cooperation between German and Ukrainian defence firms.
Strategic context and supply chain risks
The drone deal, if executed, could further boost production lines and create jobs at both companies. Germany’s defence sector has been hiring steadily as order books fill. The war in Ukraine has transformed the industry’s outlook, with long-term procurement programmes replacing the stop-start cycles of the past.
Supply chain constraints remain a challenge. Components such as microchips are in high demand across the global defence industry, and German manufacturers are not immune to bottlenecks.
The record shows that both Rheinmetall and Diehl have been working to secure alternative suppliers, though officials have acknowledged that the situation remains fragile. The 50,000-drone figure, if accurate, would represent a significant increase in the volume of unmanned systems flowing to Ukraine. Kyiv has repeatedly requested more drones for reconnaissance and strike missions.
The German government has not commented publicly on the expected delivery timeline. Rheinmetall’s revenue of €7.1 billion in 2023 places it among the top defence contractors in Europe.
The company’s expansion into drone production is a departure from its traditional focus on armoured vehicles and artillery. Diehl, meanwhile, has built its reputation on missile systems and air defence, making the HX-2 loitering munition a natural extension of its existing capabilities.
What to watch next
The coming months will show whether the German defence industry can scale up drone production to meet the reported target. Supply chain bottlenecks, particularly for microchips, could slow delivery. The political calculus in Berlin will also matter: the special fund for the Bundeswehr provides financial backing, but any new commitment to Ukraine must navigate coalition dynamics and public opinion.
For now, the record shows that both Rheinmetall and Diehl are positioned to benefit from the shift toward drone warfare. The question is whether they can deliver at the scale Kyiv needs.
Sources
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