Ukraine on target to surpass one million FPV drone production goal, fueling wartime GDP growth

Ukraine appears to be ahead of its stated 2024 objective of producing a million drones for battling Russia’s invasion, with government officials saying 200,000 of those first-person view (FPV) UAVs have already been manufactured by the nation’s proliferating aerial tech companies.

Anna Hvozdiar, deputy minister for strategic industries, told Forbes’ Ukrainian language edition Thursday that the country’s specialized drone and wider defense sector companies had already produced about 200,000 FPV UAVs before the close of February. That puts Ukraine on pace to surpass the 2024 objective of providing a million of the craft to the nation’s fighters by 20%.

That augmented cadence is significant for a few reasons. 

First, it reflects activity rising to match what  Ukraine minister for strategic industries Oleksandr Kamyshin said in a December social media post was Ukraine’s objective to “produce a million drones next year.” The target was specifically for FPV craft, which have proven particularly potent since Ukraine began re-adapting the hobby UAVs for strike purposes in late 2022.

Indeed, Hvozdiar said the two-month 2024 production of 200,000 craft represented the largest component of what Ukraine expects to be over two million drones of various kinds turned out this year.

According to Ukraine publication Militarny, photos and videos of the new drones indicate they’re outfitted with sensors enabling night as well as day activity, including operation in hostile weather conditions. 

The FPV UAVs are also reportedly capable of flying from 40 to 50 km while carrying a four kg warhead. It’s believed they may be used in longer distance deployment of swarms, relying on a repeater communication craft that act like a “queen bee” serving as the eyes and relay station for remote pilots to stage attacks.

But the rising drone production rates is also significant for a broader reason.

Despite what is now the two-year invasion by Russia that has ravaged a large swath of the nation, Ukraine has managed to keep its economy moving despite the destruction of war. Drone activity has been central to that.

Contrary to what might be expected amid the fighting, Ukraine said its GDP expanded by 5.3% during the first nine months of 2023 compared to the same period the previous year, and expects growth of about 5% this year. That’s only about two-thirds of what it was in constant terms prior to the invasion, but still quite a feat for a country fighting relentless attacks to preserve its very existence.

A large part of that growth has arisen from government policies to adjust the economy to provide for the nation’s defense efforts, and directing foreign aid toward that rather than simply relying on it as plug-and-play material assistance. 

In doing so, leaders in Kyiv have relaxed formerly strict tax, import, and business creation rules to make activity easier to initiate and build. They’ve also launched special areas where newly-formed companies can work in proximity to create mutually beneficial ecosystems and economies of scale. 

One result of that, officials have said, is that Ukraine has gone from having had essentially no domestic drone production capacity when the invasion began, to boasting over 200 companies now churning out a wide range of UAVs for the war effort.

On the other hand, however, that drone and wider economic growth are dependent on continuing inflows of support from abroad – a resource that has slowed to a trickle as US assistance remains blocked by what’s increasingly looking like a de facto civil war across the nation’s political divide.