BAE Systems will produce 55,000 APKWS II rockets under a new Pentagon contract. These are known for their use against Shahed drones in Ukraine and the Middle East.
The total value of the contract is $1.7 billion, implying that, based on rough estimates, each rocket costs about $30,900. This makes it the cheapest mass-produced air-defense rocket, as a single Stinger MANPADS costs several hundred thousand dollars.
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In other words, APKWS remain a cost-effective solution for countering attack drones, whether launched from the ground, fighter jets, or even drones. It should be noted that they are based on 70 mm Hydra rockets.
Most of the production will take place in the U.S., with just over 16% conducted in the UK. This highlights that although BAE is now a multinational company, its roots remain in the UK.
Full completion of the contract is projected by 2031, which is a significant timeframe given the demand for these systems. However, this is most likely in addition to existing orders.
No funds are currently being allocated for the agreement, with funding applied to each smaller order individually. In other words, it is possible to attract European funding for purchases for Ukraine.
In early June 2025, U.S. Secretary of Defense Pete Hegseth ordered APKWS components intended for Ukraine to be redirected to Air Force units in the Middle East. So, U.S. supplies remain a rather specific issue.
With the continued use of inexpensive strike drones, there is still a need for effective, cost-efficient interception solutions. Unlike lasers, APKWS is a much more versatile countermeasure option.
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