Rheinmetall Chief Predicts Falling Tank Prices

The head of Rheinmetall, Germany’s largest arms manufacturer, has predicted that the cost of tanks, armoured vehicles, and artillery systems will fall in the coming years, even as European governments ramp up defence spending. Chief executive Armin Papperger told the Financial Times that expanded production and automation will benefit both the company and its customers, countering concerns that rising military budgets could inflate prices and reduce value for taxpayers.

Scaling Up to Cut Costs

Papperger said the company expects “thousands and thousands” of orders across its portfolio, including its flagship Leopard 2 battle tank, as European nations rearm in response to growing security threats. He argued that mass production will drive down per-unit costs, while investment in automation will further enhance efficiency.

“Economies of scale and greater use of automation should be good for the company but it should also be good for the customers,” he said, rejecting fears of a price spiral in the defence sector.

Defence Spending Surge Across Europe

The comments come amid a historic surge in European defence budgets following Russia’s invasion of Ukraine, with NATO members pledging sustained increases in military outlays. Germany, where Rheinmetall is headquartered, has embarked on a €100 billion rearmament programme, with other EU states following suit.

While industry analysts note that high demand often leads to rising prices in the short term, Rheinmetall’s projection suggests that production efficiencies could temper cost inflation over the medium term.