German arms giant gets record artillery order

Rheinmetall will produce €8.5 billion worth of shells for Berlin, Kiev and others

The German government has awarded an €8.5 billion contract to weapons firm Rheinmetall for the production of 155mm artillery shells. Rheinmetall said that many of these shells will be sent to Ukraine, but the company’s production capacity lags far behind Kiev’s needs.

Rheinmetall announced the contract on Thursday, stating that the €8.5 billion ($9.1 billion) order is the largest in the company’s 135-year history. Rheinmetall did not state how many shells would be made for this price, but said that the ammo would be used to replenish German, Danish, Dutch, and Estonian stocks, as well as “to support Ukraine in its defensive struggle.”

Germany will pay for Ukraine’s share of the order, the company stated.

The first deliveries are due to begin in 2025, with around a tenth of the shells built at Rheinmetall’s new factory in Lower Saxony, which is still under construction. The plant is expected to produce around 100,000 shells annually from its second year of operation onwards, while Rheinmetall said last month that it aims to produce 700,000 shells across all of its factories next year.

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However, Ukraine has demanded far more than 700,000 shells per year. According to EU estimates, Russia was firing this number every 35 days during Ukraine’s so-called counteroffensive last summer. Earlier this year, Ukrainian officials declared that they would need 20,000 per day to keep their Western-supplied guns firing at the same pace.

Despite spending hundreds of billions of dollars on military aid to Ukraine, the West has struggled to manufacture enough artillery shells and deliver them to Kiev. After promising last March to deliver a million 155mm projectiles within a year, the EU admitted three months ago that it had missed this target by half. Likewise, while the US has given Ukraine more than two million 155mm shells since the conflict began in 2022, American arms factories can only produce around 28,000 of these projectiles per month, although the Pentagon plans to almost quadruple this number by next year. 

Rheinmetall stated last year that a single 155mm shell costs at least €3,600 ($3,813), and that this price would rise further as the Ukraine conflict drags on. Theoretically, €8.5 billion could buy more than 300 million shells, although it would take the company more than four centuries to build this many, assuming it reaches its production goal of 700,000 per year.

Russia has repeatedly warned the West that continued arms deliveries to Ukraine will not swing the conflict in Kiev’s favor, and will only serve to prolong the bloodshed while increasing the risk of a cataclysmic clash between Russia and NATO.