There is a cold logic in Vladimir Putin’s war of aggression. He believes that Russia has more of everything— more men, more tanks, more aircraft, more drones, more missiles, and a greater tolerance to squander it all for the leader’s great project of subjugating Ukraine.
In one area at least, his math is right. An examination of the output numbers for ballistic and other missiles, and drones, show sharply rising output at low cost, while Western interceptors are produced far more slowly and at much greater expense.
It’s an equation that risks ultimately swamping Ukraine’s air defenses and opening the country’s military and its civilians to unchecked attack. (It should also alert the wider West to the risks it now faces from massed, coordinated aerial assault.) Russia’s aerial campaign may not win the war — Ukrainians stubbornly refuse to surrender on Putin’s demands for capitulation — but it can do very extensive damage and greatly raise the cost.
So what are the numbers?
In June, Russia’s defense industry produced approximately 195 strategic missile units. Output included 60 to 70 Iskander-M ballistic missiles, 10 to 15 Kinzhal hypersonic missiles, and 60 to 63 Kh-101 cruise missiles.
This production volume was enabled by post-2022 infrastructure expansion at the Votkinsk Machine Building Plant. Modifications included two additional workshops, 2,500 personnel, and computer numerical control (CNC) machining systems sourced from China, Taiwan, and Belarus for airframe and control system fabrication.
Rostec and Tactical Missiles Corporation coordinate labor assignment, component procurement, and material intake under centralized state contracting. Input flows are routed through protected domestic supply channels. No commercial subcontractors are involved. No multi-agency approvals are required.
Add to that skyrocketing rises in drone production, including a sevenfold increase in output of modernized and largely autonomous Iranian Shahed drones, which now include everything from Nvidia chips to thermal vision and hardened navigation — Ukraine’s military describes this as representing “a challenge to our entire doctrine of air defense.”
What of the West’s defensive missile production? Interceptor manufacturing in NATO-aligned states remains constrained by fixed output ceilings and delayed production line expansion. Lockheed Martin produced 500 PAC-3 MSE interceptors in 2024. Stated 2025 output is 600 units, with a projected ceiling of 650 by 2027. Japan contributes 30 units annually. Expansion plans are delayed by component shortfalls in seeker assemblies. GEM-T interceptor production in Germany will not be operational before the third quarter of next year.
Ukraine operates between six and eight Patriot batteries. As of July, PAC-3 missile transfers from the United States have been suspended following (contested) US claims that it must address depletion of its own inventories. French-Italian SAMP/T and Crotale systems inside Ukraine are non-operational due to total interceptor exhaustion. Forward-positioned Ukrainian Patriot batteries held no remaining PAC-3 interceptors as of June 30, 2025.
Russian missile production in the second quarter of this year totaled 585 units. PAC-3 output from the United States, Japan, and European partners will remain capped at 650 units annually. Russian manufacturing operates on state-issued throughput mandates. NATO-aligned interceptor production remains tied to peacetime contracting models and delayed component delivery schedules.
Russian missile manufacturing operates under vertically integrated and subsidy-based procurement. Pricing excludes research amortization, system integration overheads, and commercial profit. Internal accounting assigns cost ceilings based on material input, baseline labor, and volume delivery targets. As a result of this process, very different to Western accounting, Iskander-M unit production is estimated to cost $400,000-$500,000. This range aligns with historical costing for solid-fuel platforms in the Russian defense sector including Tochka-U and early Kalibr variants.
Facilities such as Votkinsk are state-owned and directed by annual Ministry of Defense procurement schedules. Components, including metal composites, energetics, and microelectronics, are sourced through domestic suppliers with fixed-state pricing. Energy and logistics costs are absorbed under sovereign budget caps. Workforce costs are suppressed through pooled labor assignments and capped salary bands derived from Ministry of Defense wage tables.
Western interceptor systems are priced under cost-plus acquisition systems. PAC-3 MSE units cost $4m. This includes subcontractor profit, component licensing, depreciation, and performance incentives. Output is fragmented across multiple tier-one and tier-two suppliers. Lockheed Martin’s declared production rate across United States facilities remains capped at 54 units monthly under current funding.
No NATO member applies profit-exempt or vertically integrated manufacturing to missile defense systems. Production rates are determined by shareholder margin, supplier dependency, and multiyear lead-time budgeting. Unit cost reductions are not structurally possible under the present contract architecture.
The outcome of all this is predictable. In a typical engagement, interception of six incoming Iskander missiles requires 12-18 PAC-3 interceptors. The resulting expenditure, between $48m-$72m, exceeds Russia’s monthly ballistic production cost by a factor of two. Ukrainian stocks are depleted faster than they can be replenished. Donor nations have not adjusted procurement models to reflect the adversary’s unit economics.
As of mid-2025, no Western supplier has implemented structural reforms to reduce interceptor unit cost. No integrated missile defense production program exists at scale. Contractual reconfiguration remains unaddressed.
Russian missile platforms now incorporate counter-intercept adaptations. Modified Iskander variants deploy radar decoys, irregular flight paths, and terminal-phase maneuvers designed to degrade Patriot effectiveness. Ukrainian data from April and May 2025 confirms declining intercept rates during saturation strikes. Interceptor overuse combined with degraded hit probability accelerates depletion.
Western procurement remains optimized for low-volume, precision defense. No scalable framework exists to match sustained missile attrition under cost pressure. Current industrial posture is insufficient to cover multi-theater needs.
Stockpile asymmetry now functions as a strategic weapon. Unit cost disparities can be converted into coercive leverage over time. This is simply not being addressed in the West, which can only be seen as highly vulnerable to attack by swarms of drones and missiles that it will not be able to fend off.
The current inertia has to be broken. Otherwise, as Ukrainian Major General Vladyslav Klochkov writes: “Break it now [or] the next generation of drones will break it for us.”
George Janjalia leads Healix’s security division in Ukraine, with a focus on fortifying business continuity and organizing security programs tailored for high-risk areas. Previously, he was a special forces and military intelligence officer in the Georgian military.
Europe’s Edge is CEPA’s online journal covering critical topics on the foreign policy docket across Europe and North America. All opinions expressed on Europe’s Edge are those of the author alone and may not represent those of the institutions they represent or the Center for European Policy Analysis. CEPA maintains a strict intellectual independence policy across all its projects and publications.
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