When asked whether Ukrainian companies would one day sell their drones to NATO, Rheinmetall CEO Armin Papperger sighed and shook his head. They would not make it through the alliance's bureaucracy, he told The Atlantic's Simon Shuster. "They need a NATO qualification," Papperger said, suggesting that Western regulators could keep them off the European market by requiring licenses that Ukrainian firms might find hard to obtain, "Hvylya" reports, citing The Atlantic's investigation.
The regulatory burden extends well beyond market access. During a tour of Rheinmetall's main production plant in Unterluss, Germany, the company's press officer Jan-Phillipp Weisswange explained the complexity of changing anything about a German weapons system. "Any adjustment needs to be recertified by the procurement agency," he said. Even a change to the material used to make a tank barrel would take at least a year to certify. "The quality controls are very strict, and the costs are very high."
This bureaucratic structure gives established manufacturers a powerful competitive advantage. Rheinmetall holds all of the necessary permits, licenses, and security clearances to sell arms to the German military. Few other companies in the world can manufacture what the Bundeswehr wants. The company increased its artillery shell production from about 70,000 annually before the war to 700,000 last year, and orders from NATO allies have poured in.
Ukraine, meanwhile, has built its drone industry at breakneck speed outside the Western regulatory framework. Production has scaled from fewer than 150,000 drones in 2023 to 4 million last year, with output expected to double again in 2026. The country now makes more drones than any democracy in the world. But navigating NATO's procurement labyrinth requires institutional knowledge, legal teams, and years of compliance work that Ukrainian startups have never needed on the battlefield.
Rheinmetall has a strong financial incentive to maintain the status quo. The company's stock has risen more than 15-fold since the Russian invasion, and its market value of roughly $80 billion now exceeds that of Germany's biggest carmakers. Papperger told The Atlantic that the company was in talks to sell weapons worth 80 billion euros, with a backlog expected to top 135 billion euros by the end of 2026. In that environment, continuing to produce expensive conventional weapons remains far more profitable than adapting to the drone age.
"Hvylya" earlier reported on why Ukrainian soldiers found NATO's readiness for modern warfare far below expectations after joint training exercises.