Quantity beats quality: Why Ukrainian $500 drones outclass US high-tech weapons
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Published on: October 27, 2025 / Updated on: October 27, 2025 – Author: Konrad Wolfenstein
Quantity beats quality: Why Ukrainian $500 drones outclass US high-tech weapons – Image: Xpert.Digital
The Switchblade Debacle: The Expensive Lesson the West Learned in Ukraine
The Garage Army: How Ukrainian Pragmatism Exposes a Multi-Billion Dollar Arms Industry
The spectacular failure of American Switchblade drones on the Ukrainian battlefield marks more than just a technical failure. It reveals a fundamental shift in the economic logic of modern warfare, one that will have far-reaching consequences for the global defense industry, government procurement strategies, and the balance of power between established military powers and agile conflict participants. The article from Focus describes a phenomenon that is shaking the foundations of the defense economy, which has been established for decades, and ushering in a new era in which technological excellence, but rather availability, adaptability, and cost-effectiveness, will no longer determine success or failure.
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The anatomy of a systemic failure
When a shipment of American Switchblade 300 drones arrived in Ukraine in 2022, expectations were correspondingly high. These systems were considered the epitome of modern precision weapons, developed by AeroVironment, a leading defense contractor with decades of experience. The Switchblades had proven themselves indispensable equipment for special forces in Afghanistan and Iraq. They embodied the Western defense paradigm of the past decades: high-quality, precise, technologically superior, and correspondingly expensive.
The reality on Ukrainian soil, however, was sobering. With unit costs between $60,000 and $80,000 per unit, the Switchblade-300 proved hopelessly incapable of handling the conditions of a high-intensity conflict. Russian electronic warfare systems severely disrupted the systems. The small warhead, barely the size of a 40-millimeter grenade, proved ineffective against even lightly protected targets. Valery Borovyk, a Ukrainian drone developer, reports tests in which a Switchblade drone hit the rear window of a minibus but failed to even shatter the front windows. A devastating verdict for a weapon system that costs more than 100 times as much as a Ukrainian FPV drone.
This failure, however, is not primarily technical, but rather economic and conceptual. The Switchblade was developed for a mission profile that fundamentally contradicts the realities of the conflict in Ukraine. It was developed in an era of asymmetric warfare, in which Western armed forces operated against technologically inferior opponents and could afford precision strikes against high-value individual targets. Ukraine, on the other hand, faces a worthy opponent with sophisticated electronic countermeasures and a warfare approach that emphasizes quantity over quality.
The economic revolution of drone manufacturing
Ukraine's response to this challenge represents a fundamental reorientation of the defense economy. Within less than three years, Ukraine has created a drone industry unparalleled in production volume and speed of innovation. The numbers speak for themselves: From a modest 1,200 drones produced in 2022, the country increased its production to 415,000 units in 2023 and reached the impressive mark of 1.7 million drones in 2024. For 2025, the Ukrainian government is targeting a production output of 4.5 million first-person view drones, accompanied by over 385,000 electronic warfare systems.
This unprecedented scaling is based on a radically different manufacturing philosophy than that of Western defense contractors. From its inception, the Ukrainian drone industry has focused on cost minimization, modularity, and rapid iteration cycles. An average Ukrainian FPV drone costs about $500 to manufacture. The Blyskavka, a fixed-wing drone modeled after the Russian Molniya, is constructed from the cheapest materials available and costs only $800 per unit, yet can carry eight kilograms of explosives over a distance of 40 kilometers. Compared to the $60,000 to $80,000 for a Switchblade-300, this represents a cost ratio of 120:1 and 75:1, respectively.
The economic significance of this cost difference only becomes truly clear when one compares the sums invested. The US spent between $42 and $56 million on approximately 700 Switchblade drones, which proved largely ineffective. For the same amount, between 84,000 and 112,000 Ukrainian FPV drones could have been procured—a quantity 120 to 160 times greater. This simple calculation reveals the fundamental economic superiority of the Ukrainian approach in a conflict where the sheer availability of weapons systems determines success or failure.
The paradigm of availability-oriented warfare
The Ukrainian-Russian conflict has established a new warfare paradigm, which Eduard Lysenko of the state defense technology department Brave-1 aptly describes with the metaphor of a BMW and the Škoda Octavia. A BMW may be faster and more comfortable, but if the task is to provide a car for everyone, the Škoda is the economically rational choice. This analogy goes to the heart of the new defense economics: In a high-intensity conflict, it is not the technical perfection of the individual system that counts, but the ability to provide sufficient quantities of deployable systems.
Russia recognized this early on and is pursuing a drone spam strategy, using drones en masse to overwhelm defense systems. The numbers are impressive: While Russia deployed approximately 250 FPV drones per day in March and April 2024, this number has now risen to 1,000 to 1,200 units daily, with peaks of around 30,000 drones in August. These volumes cannot be countered militarily or economically with high-priced Western systems.
The consequences of this availability-oriented warfare are dramatic. Viktor Dolgopiatov, head of Burevii, a design bureau for unmanned ground systems, reports that an average ground drone in Ukraine has a lifespan of only one week. Multiplied by the more than 2,000 kilometers of front line, the extent of the consumption becomes clear. Western ground systems, which cost hundreds of thousands of dollars, cannot be used economically in this environment when Ukrainian counterparts are available for $10,000 to $20,000.
The structural deficiencies of the Western defense industry
The failure of the Switchblade drones is symptomatic of deeper structural problems in the Western defense industry. This industry has developed over decades in an environment characterized by a few major customers – primarily government defense ministries – and long development cycles. The incentive structures of this system favor not cost minimization and rapid adaptability, but rather the maximization of complexity and the associated development and production costs.
Traditional defense contractors operate with profit margins of seven to nine percent of revenue, according to a 2023 Pentagon study. Given limited production volumes and high research and development costs, the industry relies on maximizing prices per unit. This leads to a vicious cycle: The more complex and expensive a system, the fewer units can be procured, which in turn results in higher unit costs. Critics like Blyskavka's lead engineer accuse Western competitors of focusing on oversized products with enormous profit margins to justify small production volumes and high research and development costs.
This problem is exacerbated by the extremely long procurement cycles of the Western defense industry. While commercial technology companies bring products to market within months, military programs often take years or decades. Lockheed Martin's F-35 program, for example, is more than a decade late and $165 billion over budget. In 2024, all delivered F-35 fighter jets were delivered an average of 238 days late. This inertia is increasingly problematic in a rapidly changing technological environment.
Another structural problem is the limited innovation capacity of established defense companies. Although these companies improved their profit margins and cash flows between 2010 and 2019, the share of spending on internal research and development and capital investments declined. Instead, distributions to shareholders through dividends and share buybacks increased by 73 percent. This focus on short-term shareholder returns comes at the expense of long-term innovation and adaptability.
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The Ukrainian innovation engine and its recipe for success
In direct contrast to the Western model, Ukraine's defense technology industry represents an impressive example of accelerated innovation under extreme conditions. The state-funded Brave1 program, launched in April 2023, acts as a catalyst for this innovation ecosystem. With a budget of the equivalent of $39 million for 2024, Brave1 has registered over 3,500 developments, codified more than 260 according to NATO standards, and awarded over 470 grants totaling UAH 1.3 billion.
The Ukrainian drone industry's recipe for success is based on several pillars. First, there is close proximity between developers and end users. Drone manufacturers test their products not in sterile laboratory environments, but under real combat conditions. Feedback from frontline soldiers is incorporated into product improvements within days, not months or years. This speed of iteration is unattainable for Western defense companies, which must undergo rigorous approval and certification processes.
Second, Ukraine has consistently focused on localization and import substitution. While Chinese components dominated at the beginning of the conflict, around 70 percent of components are now produced domestically by leading manufacturers such as Vyriy. Ukrainian startups such as Odd Systems produce thermal imaging cameras for $250, which are 20 percent cheaper than Chinese equivalents and are specifically tailored to the needs of FPV drone operators. This independence from foreign supply chains, which can be disrupted by political decisions—such as China's export restrictions on drone components—is a strategic advantage.
Third, the Ukrainian model is characterized by remarkable flexibility in production scaling. Monthly FPV production capacity increased from 20,000 units in January 2024 to 200,000 in December of the same year—a tenfold increase within a single year. The target for the end of 2025 is a monthly production rate of over 500,000 FPV drones, representing a 25-fold increase from the baseline. This scalability is unparalleled in the traditional defense industry.
Fourth, Ukraine has reversed the classic technology transfer from the military to the civilian sector. Instead of adapting expensive military technology for commercial applications, commercial technologies have been repurposed for military use. This approach minimizes development costs and time by leveraging existing technologies. Critics note that much of this technology is easily replicable, which calls into question its long-term economic viability. In the short term, however, this approach enables unprecedented responsiveness to evolving threat scenarios.
Electronic warfare as a technology equalizer
A key factor in the failure of high-cost Western systems in Ukraine is the intensive electronic warfare conducted by both sides. Russia deploys massive amounts of jamming devices operating in the frequency ranges of 400 to 1100 megahertz, as well as 2.4 and 5.8 gigahertz—precisely the frequencies used by many Western drone systems. The consequences are devastating: drones lose contact with their operators, GPS signals are jammed or falsified, and video transmissions are interrupted.
The Switchblade-300 proved particularly vulnerable to these electronic countermeasures. Under jamming conditions, malfunctions occurred, rendering the drones unusable. While AeroVironment has since developed an improved version that has been used with reasonable success under limited jamming conditions, the fundamental problem remains: A system costing $60,000 to $80,000 that can be neutralized by a $1,000 jammer is not a commercially viable solution.
The Ukrainian response to this challenge is multifaceted. On the one hand, fiber-optic drones are increasingly being used, which are connected to the operator via a physical cable and are thus immune to radio interference. While these systems have range limitations due to the cable connection, they are operable in highly disrupted environments. On the other hand, Ukrainian manufacturers are investing heavily in AI-supported terminal guidance systems that enable drones to fly autonomously to their target even after the connection to the operator is lost.
Companies like Germany's Helsing, which has delivered 1,950 AI-equipped HF-1 kamikaze drones to Ukraine and is producing another 6,000 HX-2 drones, demonstrate the direction of technological development. These systems can lock on to targets and remain locked in the electromagnetic spectrum despite all enemy countermeasures. The crucial difference from Western developments: These capabilities are implemented in systems that are capable of mass production and significantly more cost-effective than traditional Western weapons systems.
The investment dynamics and their implications
Investment flows into the Ukrainian defense technology industry have accelerated dramatically in recent years. While a total of approximately $90 million flowed into Ukrainian defense tech companies through the Brave1 platform by 2024, over $100 million in investment commitments were announced at the Defense Tech Valley Summit in September 2025 alone. The average investment amount per transaction has increased from $300,000 to $1 million, signaling the increasing maturity and attractiveness of the sector.
Particularly noteworthy is the European Union's commitment to provide seven billion dollars from interest income on frozen Russian assets to the Ukrainian drone industry. This sum far exceeds previous investments and could enable the Ukrainian industry to further increase its already impressive production capacity. President Zelenskyy has stated that Ukraine has the capacity to produce eight million drones annually, but lacks the financing. The announced EU funds could close this gap.
Interestingly, despite these investments, approximately 40 percent of Ukraine's drone production capacity remains unused. This reflects the central dilemma of the Ukrainian defense industry: While the technological expertise and production infrastructure exist, the financial resources to fully utilize it are lacking. Western NATO states are currently increasing their defense spending to five percent of gross domestic product, of which 3.5 percent is earmarked for hard defense. However, a large portion of these investments continues to flow to European and American defense companies that produce technologies unsuitable for the challenges of the war in Ukraine.
This misallocation of resources has far-reaching strategic implications. While Western governments invest billions in weapons systems that could potentially prove obsolete, a battle-tested, cost-efficient, and highly scalable industry remains chronically underfunded. The economic irrationality of this situation is obvious, but it is perpetuated by political factors—national industrial policy, job security considerations, and established lobby structures.
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Deceptive success: The risks of the Ukrainian drone model
Risks and limitations of the Ukrainian model
Despite all the enthusiasm for Ukraine's successes, the inherent risks and limitations of this model cannot be overlooked. Investments in the Ukrainian drone industry are fraught with significant risks. The country offers weak intellectual property protection, the rule of law is questionable, and arms exports are largely restricted during wartime. These factors deter institutional investors who require planning security and legal certainty.
The long-term viability of the Ukrainian drone industry is also questionable. As mentioned, much of the developed technology is easily replicable. Ukraine currently benefits from a natural monopoly as a test laboratory for military technology under real combat conditions. Should the conflict end, this unique competitive position could be lost. Other countries—primarily China, but also Western nations—could use the knowledge gained to build their own production capacities and neutralize Ukraine's market advantage.
Another structural problem is the extreme dependence on Chinese components. Despite localization efforts, Ukraine still sourced 89 percent of its drone-related imports by value from China in the first half of 2024. Nearly 97 percent of Ukrainian drone manufacturers identify China as their primary source of supply. This dependence represents a strategic vulnerability that China could exploit at any time. As early as 2024 and 2025, Beijing imposed export restrictions on drone components such as flight controllers, motors, and navigation cameras, significantly impacting Ukrainian production.
The question of scalability beyond the war economy is also open. The Ukrainian drone industry operates under conditions of extreme demand and government support. Companies can test their products immediately on the front lines and receive immediate feedback. These conditions are not replicable in peacetime. Whether the Ukrainian model will remain competitive in a normal market environment is uncertain.
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The strategic implications for Western defense policy
The lessons learned from the Ukraine conflict call into question fundamental assumptions of Western defense policy. For decades, Western military strategy was based on the belief that technological superiority could compensate for quantitative inferiority. High-quality, precise weapons systems were supposed to make it possible to prevail against numerically superior opponents with smaller numbers. The Ukraine conflict demonstrates the limits of this doctrine.
In a high-intensity conflict against a matched opponent with sophisticated electronic countermeasures and its own production capabilities, the Western high-price model proves unsustainable. The sheer availability of weapons systems becomes the deciding factor. A system that works excellently but is only available in limited quantities loses out to one that works well enough and is available in large quantities.
This realization has profound consequences for procurement strategies. Western defense ministries must move away from their fixation on technical excellence and instead prioritize availability, cost-effectiveness, and rapid iteration. This doesn't mean that advanced technology becomes irrelevant—complex, expensive systems remain essential for certain capabilities such as strategic missile defense, anti-submarine warfare, or space operations. But for the majority of frontline tactical warfare, new procurement models must be developed.
Some Western actors have already internalized this lesson. In October 2025, US Secretary of Defense Dan Driscoll announced a fundamental reform of the procurement system and a reduction in dependence on large defense contractors. The Army will transition to a Silicon Valley approach, combining venture capital and mentoring with a startup culture. Procurements will no longer be measured in years and billions, but in months and thousands. The system that has held the Army back for decades and lined the pockets of the prime ministers will be completely dismantled.
However, this rhetoric has yet to translate into concrete action. The structural incentives of the military-industrial complex continue to favor established large corporations. Smaller, innovative companies struggle to secure contracts because they lack the established relationships, certifications, and production capabilities. The U.S. Army's recent multi-billion dollar agreement with AeroVironment for Switchblade 300 and Switchblade 600 drones in August 2024 demonstrates that traditional procurement patterns persist.
The global reorganization of the defense industry
The Ukraine conflict is catalyzing a reorganization of the global defense industry, the contours of which are only gradually becoming apparent. The traditional distinction between commercial and military technology development is becoming increasingly blurred. Companies like Anduril and Helsing, which originate from Silicon Valley and the European technology sector, respectively, are bringing commercial development practices—agile methods, rapid iteration cycles, user orientation—to the defense sector.
At the same time, new hubs of defense innovation are emerging beyond the established centers. Ukraine is positioning itself as a global testing ground for military technology and is attempting to transform this temporary role into a permanent industrial base. President Zelenskyy announced in September 2025 that Ukraine would relax its arms export restrictions. Banned under martial law since 2022, controlled exports will be permitted in the future, particularly for sea drones and other proven systems. This could make Ukraine a major arms exporter, with the unique selling point being the combat testing of the systems.
The established defense powers are responding to this challenge in different ways. Germany, France, and the United Kingdom are intensifying their cooperation with Ukrainian drone manufacturers, partly through investments and partly through joint ventures for joint production. Quantum Systems, a German company that manufactures reconnaissance drones, established a local presence in Ukraine early on and is now benefiting from its proximity to the market. Rheinmetall, BAE Systems, Thales, KNDS, and Kongsberg Defence & Aerospace are planning joint ventures with Ukrainian manufacturers, according to Ukrainian government documents.
These collaborations could lead to a partial technology transfer from Ukraine to the West—a historic reversal of the usual trend. Western companies and armies could benefit significantly from relying more heavily on Ukraine's drone expertise, as Valery Borovyk notes. His advice to defense companies is clear: Those who fail to engage intensively with the war in Ukraine today will be on the road to bankruptcy tomorrow.
China's double game: supplier, observer and strategic threat
China plays a paradoxical role in this global reordering. On the one hand, the country is the indispensable supplier of components for both Ukrainian and, increasingly, Russian drone production. The vast majority of drones used in Ukraine and Russia contain Chinese chips, motors, cameras, and batteries. This dual dependence gives Beijing considerable strategic influence, which it also exerts, as the export restrictions of 2024 and 2025 demonstrate.
On the other hand, China benefits enormously from the technological learning process taking place in the Ukraine conflict. Chinese observers are intensively studying the tactical lessons of drone warfare, electronic warfare, and the mass production of military systems. These insights are being incorporated into Chinese military doctrine and arms planning. Given that China has far greater industrial capacity than Ukraine, the country could be capable of producing drones in even greater numbers in the event of a conflict.
Western dependence on Chinese components for defense systems presents a strategic dilemma that is almost insurmountable. On the one hand, Chinese components are often unrivaled in price and availability, making their integration into Western and allied weapons systems attractive. On the other hand, this dependence creates vulnerabilities that could be catastrophic in the event of a conflict—for example, over Taiwan. Efforts to diversify supply chains and build domestic production capacities for critical components are underway, but are lengthy and costly.
Systemic transformation or temporary phenomenon
The central question is whether the phenomena observable in the Ukraine conflict represent a lasting systemic transformation of warfare and the defense economy, or whether they are a temporary, context-specific phenomenon. Several factors point to a permanent shift. The democratization of military technology through commercial components is irreversible. The availability of drones, electronic components, and AI systems on the commercial market enables even smaller players to develop relatively powerful weapons systems.
The proliferation of these technologies is fundamentally changing the strategic landscape. President Zelenskyy warned in his speech to the UN General Assembly in September 2025 that tens of thousands of people can now be killed professionally with drones. Drones used to be expensive and complex, and only the strongest countries could deploy them. Today, even simple drones can fly thousands of kilometers. This development, he said, is the most destructive arms race in human history.
At the same time, there are factors that argue against a complete transformation. For certain military capabilities—strategic bombers, aircraft carriers, ballistic missile submarines, air superiority fighters—there are no cost-effective mass alternatives. Dominance in these areas continues to secure the military superiority of the major powers. The Ukraine conflict is also atypical in several respects: a high-intensity conflict between equal adversaries with a distinct front line and massive material deployment. Many other conflict scenarios—counterinsurgency, peace enforcement, limited interventions—could pose different technological requirements.
Nevertheless, the evidence points to a fundamental shift. Availability is becoming the new currency of military power. The ability to rapidly develop, mass-produce, and continuously improve weapons systems is becoming more important than the technical superiority of individual platforms. This favors actors with flexible, decentralized production structures and short decision-making processes over cumbersome bureaucratic systems.
Economic policy consequences and recommendations for action
The developments described require profound adjustments to Western defense and economic policies. First, procurement processes must be radically accelerated. Multi-decade development cycles are no longer sustainable in the current technological environment. Instead, iterative development models are necessary that begin with minimal functional versions and continuously improve them. This requires a departure from perfectionism and the acceptance of risks and occasional failures.
Second, the diversification of the supplier base must be promoted. Concentration on a few large corporations creates inflexibility and limits innovation potential. Smaller, agile companies must be systematically integrated into procurement processes, even if this means additional administrative effort. The increased use of alternative procurement instruments such as Other Transaction Authorities in the USA is a step in the right direction.
Third, the new reality requires massive investments in domestic production capacity for critical components. Dependence on Chinese supply chains must be reduced, even if this entails higher costs in the short term. The EU initiative to strengthen European semiconductor production is an example of such strategic industrial policies. Similar programs are necessary for batteries, sensors, and other key components.
Fourth, Western governments should systematically expand cooperation with the Ukrainian defense industry. Ukraine offers not only battle-tested technologies but also valuable insights into modern warfare. Joint ventures, technology transfer, and joint research programs can help Western militaries keep pace. The EU's announced $7 billion for the Ukrainian drone industry is an important step, but it must be accompanied by systematic knowledge transfer.
Fifth, investment is needed in training and doctrine development. New technologies require new tactical concepts and operational formats. Armed forces must learn to handle masses of disposable systems, master electronic warfare, and conduct decentralized, network-based operations. This requires comprehensive restructuring in training, organization, and leadership.
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The irreversible lessons of drone warfare
The disappointment over American Switchblade drones in Ukraine is far more than a technical anecdote. It symbolizes the failure of a decades-old paradigm that prioritized technological excellence over availability, complexity over simplicity, and cost maximization over cost-effectiveness. The Ukrainian defense industry has developed an alternative model with remarkable speed, based on mass, adaptability, and rapid iteration cycles. This model is proving superior in the context of a high-intensity conflict.
The strategic and economic implications of this shift are profound. Established defense companies are being forced to fundamentally rethink their business models. Governments must adapt procurement strategies and invest in new industrial capacities. The global balance of power is shifting in favor of those actors that can learn and adapt more quickly. A Pandora's box of cheap, mass-producible military technology has been opened. Any army that is unprepared for this threatens to be overwhelmed by the development.
Valery Borovyk's warning to the arms industry is urgent: No one in this world knows what threats await in the future, not a single analyst, not a single general. Anyone who doesn't intensively address the war in Ukraine today will be headed for bankruptcy tomorrow. This statement applies not only to companies, but to states and their defense strategies as a whole. The lessons of the Ukraine war must be learned before it is too late. The alternative is to be confronted with overpriced, insufficiently available systems in the next conflict, while opponents overwhelm with inexpensive masses. The economics of modern warfare have fundamentally changed. Those who ignore this do so at their own peril.
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