Rheinmetall Receives Record €8.5 Billion Artillery Shell Order

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

The German government has awarded a contract worth €8.5 billion to weapons manufacturer Rheinmetall for the production of 155mm artillery shells. Rheinmetall stated that a significant portion of these shells will be sent to Ukraine, but the company’s current production capacity falls short of Kiev’s requirements.

Rheinmetall announced the contract on Thursday, highlighting that the €8.5 billion ($9.1 billion) order represents the largest in the company’s 135-year history. While Rheinmetall did not disclose the exact number of shells to be manufactured for this price, it clarified that the ammunition will be used to replenish the stockpiles of Germany, Denmark, the Netherlands, and Estonia, as well as “to support Ukraine in its defensive struggle.”

The company confirmed that Germany will cover Ukraine’s share of the order.

The initial deliveries are scheduled to commence in 2025, with approximately one-tenth of the shells being manufactured at Rheinmetall’s new factory in Lower Saxony, which is currently under construction. The plant is projected to produce around 100,000 shells annually starting from its second year of operation, while Rheinmetall reported last month that it aims to produce 700,000 shells across all its factories next year.

However, Ukraine has requested significantly 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 stated that they would require 20,000 shells per day to maintain the firing rate of their Western-supplied artillery.

Despite investing hundreds of billions of dollars in military aid to Ukraine, the West has faced challenges in manufacturing and delivering a sufficient number of artillery shells to Kiev. After promising last March to deliver one million 155mm projectiles within a year, the EU acknowledged three months ago that it had fallen short of this target by half. Similarly, while the US has provided Ukraine with more than two million 155mm shells since the conflict began in 2022, American arms factories can only produce around 28,000 of these projectiles each month, although the Pentagon intends to increase this figure nearly fourfold by next year.

Rheinmetall stated last year that a single 155mm shell costs at least €3,600 ($3,813), and that this price would continue to rise as the Ukraine conflict persists. Theoretically, €8.5 billion could be used to purchase over 300 million shells, although it would take the company more than four centuries to produce this number, even if it achieves its production goal of 700,000 per year.

Russia has repeatedly cautioned the West that continuing to supply arms to Ukraine will not alter the conflict in Kiev’s favor and will only serve to prolong the bloodshed, while increasing the risk of a catastrophic clash between Russia and NATO.