Europe Rethinks Its Missile Arsenal as Ukraine Exposes the Cost of Modern War

Russia’s war against Ukraine is reshaping how European countries think about missiles and air defence. Instead of relying primarily on small stocks of sophisticated and expensive systems, governments are increasingly looking for weapons that can be produced quickly, in large quantities and at substantially lower cost. The battlefield in Ukraine has become one of the clearest demonstrations of why this shift is necessary: sustained missile and drone attacks can rapidly consume even substantial stocks of high-end interceptors.

The change is creating new demand across Europe’s defence market. Governments are increasingly turning to younger defence companies developing cheaper cruise missiles and interceptors designed not simply for technological sophistication, but for mass production. The objective is not to replace expensive systems such as Patriot, but to build a layered architecture in which high-end interceptors are reserved for the most difficult targets while cheaper systems deal with a larger share of incoming threats.

Ukraine has changed the economics of air defence

For years, European defence procurement was largely built around relatively small production runs of highly sophisticated weapons. That model made sense in peacetime, when the priority was maintaining technological superiority rather than sustaining the consumption rates of a major conventional war. Ukraine has demonstrated a different reality: ammunition can be used far faster than the defence industry is capable of replacing it.

The problem is particularly visible in air defence. Russia has repeatedly launched large numbers of drones and missiles against Ukrainian cities and critical infrastructure, forcing defenders to allocate limited interceptor stocks across different types of targets. Using some of the most expensive missiles available against every incoming drone is difficult to sustain over a prolonged campaign.

Ukraine has consequently developed a layered approach combining machine-gun systems, interceptor drones and electronic warfare with conventional air-defence systems. This allows expensive interceptors to be conserved for ballistic missiles, cruise missiles and other more demanding targets. The experience is increasingly influencing European militaries and defence manufacturers as they reconsider what an effective air-defence architecture should look like.

The case for cheaper missiles

The issue is not simply the price of an individual interceptor. The more fundamental question is whether a country can replenish its arsenal quickly enough after sustained combat.

Depending on the system and the target, the cost of an individual interception can reach tens of millions of euros. New European manufacturers are attempting to bring that figure down to roughly €1–2 million, while some companies are pursuing even lower costs. Ukrainian defence company Fire Point, for example, says it is developing a ballistic-missile interceptor costing less than €1 million — potentially several times cheaper than a Patriot interceptor.

The economics become particularly important during a mass attack. If an adversary can launch hundreds of relatively inexpensive drones in a single wave, a defence system that responds to every target with a highly expensive missile can face an unfavourable exchange rate. Even a technically successful air-defence network can become unsustainable if the rate at which it consumes interceptors substantially exceeds the rate at which industry can replace them.

European manufacturers are therefore increasingly focusing on a different balance between cost, range, accuracy and production speed. The goal is not necessarily to develop the most sophisticated missile possible, but to produce a weapon that is sufficiently capable while remaining affordable enough to be manufactured and deployed in large numbers.

A new generation of European defence companies

This demand is creating opportunities for companies that until recently had little presence in Europe’s traditional defence market. In June, the Netherlands ordered 700 Ruta Block 2 cruise missiles from European start-up Destinus in a deal worth €250 million. The UK has also placed its first contracts for Skyhammer interceptors with Cambridge Aerospace, while Estonia’s defence forces have highlighted the growing importance of affordable systems capable of responding to the changing character of warfare.

The production targets being set by these companies illustrate the scale of the shift. Cambridge Aerospace plans to reach output of 2,500 interceptors a month by the end of the first quarter of next year. Missile manufacturer Frankenburg is targeting production of up to 100 missiles a day and aims to reach 1,500 units in 2026.

These figures point to a broader change in the European defence industry. Traditionally, the value of a weapons programme has often been associated with technological complexity and sophisticated capabilities. The experience of Ukraine is placing another metric alongside those factors: whether a system can be manufactured in the thousands, replenished rapidly and scaled up when a crisis begins.

Europe’s industrial base is becoming part of defence planning

Technology alone is not the main constraint. European companies already possess expertise in guidance systems, electronics, propulsion and missile design. The more difficult challenge is building industrial capacity capable of maintaining high-volume production while securing critical components and meeting the testing and certification requirements of military procurement.

Destinus, for example, is integrating into Rheinmetall’s industrial base through a joint venture. Cambridge Aerospace is investing in access to missile engines and other critical components while drawing on commercial technologies, including automotive radar chips. Fire Point is developing a network of production partners that allows different elements of the manufacturing process to be scaled independently.

That model could gradually alter the structure of Europe’s defence industry. Rather than depending predominantly on a limited number of major contractors producing relatively small numbers of extremely complex systems, European countries are beginning to develop a broader network involving established defence companies, start-ups and civilian manufacturers. For governments seeking both higher defence spending and greater strategic autonomy, industrial capacity is increasingly becoming a security capability in its own right.

Expensive systems will remain essential

The push for cheaper missiles does not mean that Europe is moving away from sophisticated air-defence systems. High-end interceptors remain essential for dealing with the most difficult threats, particularly ballistic missiles.

The emerging model is instead based on complementarity. Expensive systems can provide the upper layer of defence against complex targets, while cheaper interceptors, drones, electronic warfare and other systems absorb a greater proportion of lower-end threats. This reduces pressure on the most valuable missile stocks and allows them to be reserved for targets where their capabilities are genuinely required.

The approach effectively creates a new economics of air defence. The value of a high-end interceptor is not only determined by its ability to destroy a target, but also by whether it can be preserved for situations where cheaper systems are unsuitable. A layered network therefore becomes both a military and an economic calculation.

From stockpiles to the ability to replenish

Another lesson emerging from Ukraine concerns the meaning of military readiness itself. Maintaining large stocks of missiles in peacetime is no longer sufficient if the industrial base cannot replace them rapidly once a major conflict begins.

European manufacturers are consequently treating production capacity as part of deterrence. The ability to replace thousands of missiles and interceptors can become strategically important because it determines whether a country can sustain its defences during a prolonged confrontation rather than simply withstand the first few waves of attacks.

Investors are already responding to the trend. Cambridge Aerospace has raised $300 million to expand production, while Destinus is seeking additional financing ahead of a potential initial public offering. The European drive for cheaper missiles is therefore becoming not only a procurement story but also a new area of industrial investment.

Ukraine’s experience is central to this transformation because it provides Europe with a real-world demonstration of how quickly different types of weapons are consumed, how mass attacks stress air-defence networks and where expensive systems reach their economic limits. European governments are now attempting to incorporate those lessons into their own defence planning before having to test the resilience of their arsenals under comparable conditions.