30th November 2025
Why Western Militaries Struggle to Build Affordable Weapons: A Summary
The Core Problem
NATO and allied defense industries excel at producing cutting-edge military technology—fifth-generation fighters, advanced submarines, and precision weapons systems. However, they often struggle to develop cheaper, mass-producible alternatives. Russia’s 2022 invasion of Ukraine starkly highlighted this weakness, demonstrating that in large-scale conventional warfare, quantity and magazine depth can matter as much as, or more than, sheer quality.
The Cost Gap Reality
The price disparity between Western and competitor systems varies significantly by equipment type:
Where gaps are smaller: Long-range cruise missiles show minimal cost differences. Russian missiles like the KH-101 cost roughly $1-2 million, comparable to American Tomahawks at $2.2 million. Advanced systems like the F-35, despite criticism, often provide better value per capability than many alternatives.
Where gaps are larger: Small drones, loitering munitions, and armored vehicles show the starkest differences—sometimes an order of magnitude. A NATO drone costing $6,000 might have a $600 Ukrainian equivalent. New Russian T-90M tanks remain in the seven-figure range, while a fully-equipped Leopard 2A8 enters eight figures.
Four Keys to Affordability
The formula for cost-effective weapons systems involves four main factors:
- Scale: Mass production dramatically reduces per-unit costs through economies of scale
- Specifications: Higher performance requirements inevitably drive up costs
- Setting: Labor costs, regulations, and infrastructure vary by location
- Certainty: Long-term, predictable orders enable efficient investment and production planning
Why the System Produces Expensive Equipment
Military Incentives
End users naturally prioritize survivability, performance, and comfort over cost—they want the Cayenne, not the Corolla. Program-level officers focus on their specific projects succeeding rather than balancing the entire defense budget. Senior leadership may be incentivized to maximize capability in their funded programs, even at the expense of cost efficiency.
Political Pressures
The phrase “our troops deserve the best” carries enormous political weight, making it difficult to openly advocate for cost savings that might reduce capability. High-profile platforms like fighters and tanks generate better photo opportunities and public support than investments in ammunition factories or explosives plants. Industrial policy considerations and local politics further complicate cost-focused decisions.
Industry Dynamics
Defense companies face natural incentives to develop higher-cost, lower-volume systems. Expensive programs can be less risky from an investment perspective than building massive production capacity for cheap items that might not sell. Cost-plus contracts sometimes reward higher program costs with proportionally higher profits. Proprietary systems can lock in maintenance contracts and future upgrades, while commercial off-the-shelf components may reduce these revenue streams.
Barriers to Cost Reduction
The requirements trap: If specifications demand cutting-edge performance, affordable alternatives that don’t meet those specs simply won’t compete, regardless of their price point.
The tinkering problem: Militaries love to modify and improve systems, even during production. These changes, while often worthwhile for capability, disrupt efficient manufacturing and drive up costs.
Short-term ordering: Purchasing one ship or one year of ammunition at a time provides flexibility but sacrifices the cost benefits of bulk orders and long-term contracts.
Post-2022 Progress and Limitations
Since the Ukraine invasion, there’s been clear movement toward affordability:
- Surge in procurement of small drones and loitering munitions
- Multiple low-cost cruise missile programs across the US and Europe
- Interest in “high-low mix” strategies combining premium and affordable systems
- Programs like the US Navy’s Raptor torpedo explicitly prioritizing commercial components
However, significant caveats remain:
- Many programs remain in conceptual or planning stages
- Some performance requirements simply cannot be achieved cheaply
- The expensive, high-performance option is sometimes genuinely the most cost-effective solution for specific missions
- Old procurement habits and incentive structures haven’t fundamentally changed
The Path Forward
Western defense industries can build affordable systems—they’ve done it before with examples like JDAM and the Swedish Gripen fighter. The real question isn’t capability but willingness: Are governments and militaries prepared to make the necessary policy decisions, including long-term contracting commitments, acceptance of “good enough” specifications where appropriate, and greater use of commercial technology?
The Ukraine war provides lessons in mass production under pressure. Whether countries facing less immediate threats will implement these lessons remains to be seen. The fundamental incentive structures remain largely unchanged, even as the rhetoric around affordability has shifted.
