Germany’s biggest arms manufacturer took another step towards an even weightier presence in Ukrainian arms production with the handover – precisely on time – of the very first Rheinmetall Lynx infantry fighting vehicle to be operated by the Armed Forces of Ukraine (AFU), Tuesday news reports led by the Frankfurter Allgemeine Zeitung said.
Both Ukrainian and German media on Tuesday reported the Lynx was the first of a total ten combat vehicles that the AFU would test on the battlefield. Rheinmetall CEO Armin Papperger, in October interviews with Ukrainian media, said construction of a Lynx manufacturing line in Ukraine had begun and that, all being well, the first vehicle would roll off the conveyer “by the end of the year.”
The price of Rheinmetall shares by Wednesday had spiked from $630 to a high of $668, a massive jump in value and hard opposite to the downward trend of most companies listed on Germany’s primary stock market index, the DAX.
Capitalized at $28.5 billion, the Düsseldorf-headquartered firm is Germany’s 26th-biggest corporation, data published by the market watch group companiesmarketcap showed.
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Rheinmetall’s Lynx KF41 (Kettenfahrzeug) is a heavy infantry fighting vehicle (IFV) designed to carry men into combat and win close-in battles. Its main weapon is a 30mm autocannon firing advanced, airburst rounds. Some versions displayed by Rheinmetall to the public were fitted with an Israeli anti-armor missile called Spike. The vehicle is designed to accept upgrades easily. Rheinmetall assembles Lynxes in a factory in Hungary.
The Lynx is similar to the made-in-USA Bradley IFV. Ukraine’s army has operated the Bradley since early 2023 and has received about 300 vehicles. The Bradley is popular with troops for its firepower, speed, and rugged construction, allowing it to take serious damage without harm coming to soldiers aboard. Designed in the 21st century, the German Lynx has better sensors, more efficient armor, and a more accurate cannon but weighs more and likely costs more than the Bradley.
Officials both in Berlin and Kyiv have said Ukrainian combat brigades will be equipped with Lynx IFVs in the future, but, vehicle numbers and means of funding have not been made public.
The early January delivery of the Lynx IFV to the Ukrainian military – exactly to Papperger’s timeline – followed a December Rheinmetall announcement that Ukraine’s government had booked an order for 180,000 rounds of 35mm HEI-T ammunition (High Explosive Incendiary with Tracer), to be used by Cold War-era Gepard anti-aircraft system donated by Germany to Ukraine.
The AFU has widely and successfully employed its 55-vehicle Gepard fleet to hunt down and destroy Russian long-range kamikaze drones. The order is in “the high double-digit million euro range” and funded by Germany, a corporate statement said.
Outside Ukraine, Rheinmetall, on Dec. 20, inked an agreement with representatives of the EPSO-G development group and the Lithuanian company Giraitės to build a manufacturing plant for 155mm artillery shells for the Ukrainian military – probably the single most critical combat munition excepting First Person View (FPV) drones. Rheinmetall will hold a 51% controlling share and local firms, the remainder. Start-up costs will be around $270 million and production should begin in late 2026.
Ukraine in the fourth quarter of 2024 bought directly from Rheinmetall several tens of thousands of 155mm propellant charge modulesnin, in a deal worth nearly $10 million. Propellant charges are critical for artillerymen because without a charge, a cannon or howitzer will not shoot. Delivery is scheduled for January 2025.
Another order targeting a supply chain bottleneck was made by the German government in December 2024 for 20 Marder infantry fighting vehicles – the combat system Lynx is replacing – to be sent to the Ukrainian military.
Germany, per a Bundeswehr statement, has donated nearly 140 Marders to the AFU, along with 103 Leopard 1 A5 main battle tanks, 18 Leopard 2 A 5 main battle tanks, and close to 200 lighter armored vehicles.
Rheinmetall did the upgrade work on the Marders, the Leopard tanks (both types), and some of the light combat vehicles prior to transfer to Ukraine. A Rheinmetall-led joint venture in west Ukraine in June opened a major maintenance facility to perform most upgrades and repairs for that fleet, including for combat damage.
Probably the biggest and – for Ukrainian infantrymen – most important Rheinmetall initiative to date is a contract signed in late 2023 and now being filled for “tens of thousands” of 155mm howitzer shells for the Ukrainian artillery.
The German government is paying “a three-digit million Euro” sum to fund the production starting in 2025. If extended, Berlin could contract a total $1.35 billion for more Rheinmetall 155mm shells to be delivered to Ukraine through 2029.
Aside from the Lynx factory, Rheinmetall is setting up a 155mm shell production line in Ukraine as well. The project, per a February 2024 memorandum of understanding “covers the complete technical equipment of the factory through to commissioning...(with) a total value ranged in a low three-digit million euro range.”
A June corporate statement said manufacturing equipment had been ordered and that the factory could begin production “in 24 months.” Ownership terms are similar to the Lithuania facility, with Rheinmetall holding a 51% controlling share.
Pappenberger, in March comments to Sueddeutsche Zeitung newspaper, said that worldwide, Rheinmetall should be producing more than one million 155mm shells a year by 2027.
Rheinmetall also plans to build plants in Ukraine to manufacture gunpowder and anti-aircraft weapons, the Ukrainian defense research group Militarniy reported.
Rheinmetall is not alone in jumping on the Ukraine arms manufacturing bandwagon.
Denmark has announced government plans to invest $628 million in arms production. Britain has worked closely with Ukraine’s navy to develop and field envelope-pushing robot boats. Sweden has discussed localizing the production of CV-90 infantry fighting vehicles. The Czech Republic and Ukraine jointly manufacture howitzer and tank ammunition. And Ukrainian officials have met with France’s KNDS and Finland’s Nammo to discuss licensed shell production, Ukrainska Pravda reported.
US interest in on-shoring arms production into Ukraine has been, relatively limited. Incoming US President Donald Trump, during a recent successful election campaign, repeatedly criticized US policy giving Ukraine military hardware either purchased by US taxpayers from US manufacturers or by transferring the equipment or ammunition to Ukraine from existing US stocks.
Aside from minor initiatives like a mostly stalled attempt to produce American high-tech attack drones, and preliminary talks with Northrop Grumman, possibly to produce unguided rockets for helicopters, neither Washington nor the US private sector have made serious attempts to produce arms or munitions in Ukraine.
According to Ukrainian President Volodymyr Zelensky, only about half of the promised American military material Trump was complaining about, has actually reached Ukrainian fighting men, because of Pentagon concerns about too-small inventories and supply chain bottlenecks.
During a weekend interview with popular US blogger Lex Fridman, Zelensky said that US assistance costs to Ukraine were wastefully increased because American defense contractors refused to use Ukrainian state-owned, high-capacity heavy cargo jets to deliver critical weapons to Ukraine, preferring to give the shipping business instead to lower-capacity and more-expensive private contractors.
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