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The Tanks of European Rearmament

From the series War industry and European defence

European arms industry sales amounted to €183.4 billion in 2024, with a 13.8% annual increase. This information comes from the latest report of ASD (Aerospace, Security, and Defence), the sector's industrial association, which also includes the United Kingdom, Norway, and Turkey. The report adds that the land defence sector earned €65.3 billion, with a 14.3% annual increase.

The world's top 100 armaments groups listed in the chart drawn up by SIPRI (Stockholm International Peace Research Institute) registered a 5.9% increase in revenues in 2024, reaching a record figure of $679 billion, but the 26 European groups among them had double that rate of growth, amounting to 13%. SIPRI points out that Rheinmetall, with a 47% increase in turnover, and KNDS, with a more than 40% increase in orders, are among the companies with the most rapid growth.

This is interesting because KNDS and Rheinmetall are the two main continental European companies that produce battle tanks, the Leopard 2 and the Panther KF-51. They are also partners in the MGCS (Main Ground Combat System) programme which is developing the future Franco-German tank. At the presentation of the new Leopard 2A8 in the KNDS factory in Munich, the German Defence Minister Boris Pistorius said: The technology coming from these production chains is not outdated. On the contrary, we know that modern wars will not just be drone wars [Les Echos, November 19th].

The Ukrainian experience

Looking at the war in Ukraine, one might initially find this hard to believe. In this conflict, the Russian army is said to have lost 4,100 tanks and the Ukrainian army 1,250, i.e., an average of four per day, many in the initial period. A study of the battle tank by the French think tank IFRI ["Char de combat: obsolescence ou renaissance?", November 2025] seeks to understand and describe these figures in detail.

Its starting point is that, in 2022, the Russian armed forces thought that the so-called special military operation would be a rapid campaign that would meet with little resistance. Consequently, the columns of tanks and armoured vehicles were short on logistics – including fuel, ammunition, spare parts, and electronic countermeasures – and lacked adequate infantry support to protect the advancing columns.

As a result, the tanks were spotted by drones and heavily bombed by artillery and antitank missiles. In many cases, they were abandoned by their crews because of failures, malfunctions, or breakdowns. In some instances, tanks were captured, but usually they were destroyed by suicide drones. Vehicles such as heavy tanks have tremendous advantages over uneven terrain, often full of holes and ditches, because of the extensive support base provided by their tracks. But if one of these breaks, for example due to a mine, it cannot be put right without adequate repair logistics. Once the initial tactical phase was over, the nature of the war changed.

The tactical situation in Ukraine, centred on positional warfare made transparent by the use of drones – says the IFRI study – should not be the only point of reference on the use of armoured vehicles. Consequently, after three decades of contraction of the tank fleets in service, the European armies are carrying out a huge reinvestment in tanks, which remain an indispensable element of inter-arms combat.

New generation of tanks

These tanks will need to have some specific characteristics, which the arms industry is working on.

For one thing, they will have to be able to operate in collaboration with unmanned ground vehicles, the so-called UGVs, i.e., systems able to provide air cover, transport ammunition, or perform engineering functions.

The passive protection functions of the new tanks will have to be strengthened, with extensive use of special steels, tungsten, composites, and ceramics, with due regard to the relative increase in weight. A chart by Rheinmetall highlights the weight of the various elements of a big tank: 23% for the running gear, 15% for weapons, fire control, and ammunition, 13% for the propulsion system, and a good 49% for the hull and its armour. As a result, greater importance will have to be attached to the active protection of the tanks. The Leopard 2A8s will be provided with a German variation of the Israeli Trophy system, which spots an incoming threat via radar and seeks to counter it using small munitions. Another active protection is the use of jamming systems which disorient the enemy's laser-guided munitions, such as the second-generation MUSS developed by Hensoldt in which Leonardo is a shareholder. There is also the use of loitering munitions, suicide drones launched from the tank, which fly near it for an extended period with the aim of spotting and destroying eventual enemies.

The 130 mm gun developed for the Panther KF-51 and for the new generation of the Leopard, is able to hit a target as small as an A4 sheet of paper located 1,000 metres away, with four shots in succession. The practical military value of this precision is debatable, but it can certainly be used to advertise the technological prowess of the vehicles.

German success

The small box showing the European orders of new tanks reveals the weight of German industry in the sector. Even though Europe has produced fourteen different battle-tank models in the post-war period, the Leopard has had a substantial share of the market and now accounts for 50% of the continental armies' available tank fleet. In the last decade, the production of the English Challenger tanks and of the French Leclerc and the Italian Ariete has halted, while the German KMW (Krauss-Maffei Wegmann), which became KNDS in 2015 after its merger with the French Nexter, has continued the production of the Leopard, using incremental improvements and upgrades which have led to eight different versions. It now plans to quadruple its production rate by 2028.

European rearmament incentivises combinations between industries in the sector and brings about initial steps towards a level of industrial concentration potentially favourable to the interests of continental imperialism; at the same time, it can be expected to reignite rivalries in the race for contracts worth billions. A Leopard 2A8 can cost €25 million, which is the cost of about 30 Ferraris.

KNDS and Rheinmetall are both competitors and collaborators. The barrel of all the Leopard 2 versions is produced by Rheinmetall, which in turn equips its Panther KF-51 with a chassis identical to that of the Leopard 2; in addition, they both have the same MTU turbodiesel engine and the same running gear (suspensions, wheels, and tracks). These parts are also expected to be used in the Italian tanks to be produced by a joint venture between Rheinmetall and Leonardo. According to the IFRI study, KNDS could design a transitional tank combining the Leopard chassis with a Leclerc modified turret. London is going to restructure 148 tanks that will become the Challenger 3, with a turret produced by Rheinmetall.

Quarrels over the main programmes

Rheinmetall has manoeuvred skilfully, writes Le Figaro [October 10th], to enter the MGCS programme for the new generation Franco-German tank, which should be ready by the end of the next decade. Rheinmetall has also declared itself ready to replace the Bode-Wegmann family, which currently owns 50% of KNDS's share capital – the French State owning the other half – a stake the family wishes to dispose of on the occasion of the opening of the holding company's capital, potentially via a stock market listing.

If this were to happen, the French role in KNDS would be painted into a corner. Paris is worried about this, at the very moment when tension is rising around the FCAS, the Future Combat Air System, the second major Franco-German military programme.

Finally, Le Figaro notes that the American funds BlackRock and banks such as Morgan Stanley, Goldman Sachs, and the Bank of America have a stake in Rheinmetall's capital. However, it is worth recalling that the Paris daily is owned by the Dassault family whose company produces the Rafale fighter plane – a group determined to defend its pre-eminent role in the conception of the next, sixth-generation fighter plane.

Rheinmetall aims to reach a €30-billion turnover by 2030. According to the assessment of its shareholder Morgan Stanley, its major trump card is that it is the main European producer of ammunition, which in 2024 gave it a 28.4% profit margin, as against 11.2% on armoured vehicles, 12.6% on electronic solutions, and 4.2% on civilian car parts. The circle closes: profits from ammunition are being used to develop modern tanks.

Lotta Comunista, December 2025

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