Russia’s drone dream is grounded in harsh reality, as Putin’s ambitious ambitions collided with production bottlenecks and foreign dependence.
Russia shot down a S-70 drone, a large and stealthy aircraft, after it flew into Ukrainian territory uncontrolled in early October. This sparked speculation as to how Moscow lost such a valuable asset. It is a mistake that will be felt by Moscow, which has been unable to achieve its lofty goals of producing its own drones.
Russia, which has a shortage of manpower, munitions and artillery as well as aircraft, believes that unmanned systems can be transformative in a war of attrition. The Kremlin has listed drone production among its priority projects. Russian President Vladimir Putin also announced plans to tenfold drone production in 2024. He aims to manufacture 1.4 millions this year.
Is this a realistic picture or just more propaganda, then?
Russia will struggle with this target and may have to rely heavily on China for drones. China would have to increase its production significantly to meet this demand.
After its invasion in 2008 of Georgia, Russia increased investment in unmanned aircraft. Despite this, drone production was not given priority, and Russian firms were unable to compete with international competitors such as China, the U.S.A., Israel, or Turkey.
The low production output of large combat models such as the S-70, and smaller, more disposable, reconnaissance drones, reflects the difficulty in moving from prototypes to serial production, a problem that plagues Russia’s defense industry in general.
Since the full-scale invasion of Russia, it has deployed low-cost Chinese drones in large numbers. Another Russian company, Albatross has localized production for Iran‘s Shahed loitering munition (or “kamikaze”) drone. The fact that Russia has relied so heavily on Chinese support and Iranian support shows the difficulties that the Kremlin faced in meeting the increasing battlefield demand for drones due bottlenecks within domestic production.
The Kremlin’s struggles to meet the growing demand for new drones on the battlefield due to bottlenecks within domestic production are highlighted by the fact that Russia relies so heavily on Chinese support and Iranian assistance.
Despite the influx of new state funding, Russia’s defence industry is still plagued by systemic problems, including poor productivity, low profits, corruption, an aging infrastructure and a lack of skilled workers. It also continues to rely on foreign parts and machines tools despite Western sanctions. It is not easy to scale up production and supply chain.
The Russian defense industry has adapted to new threats more quickly and efficiently than expected by outsiders, taking advantage of the country’s vast resources, high levels state influence on strategic enterprises, and illicit network.
To meet Putin’s ambitious goal, Russian defense managers must work in three directions: increasing manufacturing, accelerating localization of foreign drone technologies or paying others to make them, and importing the maximum number of drones possible to fill any gaps when domestic production falls short.
Kremlin officials are focusing on increasing productivity, but it is a difficult task. The labor market is tight and firms must reorient their supply chains towards Asia. Many critical technologies and machines tools are harder to obtain. Companies can purchase parts from China or other trading partners, or tap into the growing “gray market” of components acquired via third countries. This can create quality control problems, particularly since many illicit supply chains produce shoddy or fake parts. These barriers show that Russia cannot achieve its goals using only domestic resources.
Albatross is a good example of localizing production. It produces a version the Shahed in Alabuga, Tatarstan, with funding from VTB. This shows how drone production can be a lucrative business opportunity for new companies. In Russia, entrepreneurship can be encouraged during times of state need. Partnerships with foreign suppliers are a great way to quickly take proven designs and produce a local version.
To achieve its goals, Russia must buy a large number of drones.
It is unlikely that Russia will be able to produce 1.4m units in the near term, given its growing dependency on China for parts. Russia could become China’s biggest drone customer.
According to RAND Research, global drone production was estimated at 2.4 millions units in 2023. China holds a 70% share (1.68 million units) and its company DJI has a dominant position.
Recent reports indicate that a Chinese company in Shenzhen produces drones on order for Kupol – a major Russian defence firm. China would have to increase production significantly to meet the demand from other countries, pushing the Kremlin further into strategic dependence on Beijing.
Putin’s announcement of a “drone-campaign” is significant. However, bold new political goals won’t be able to ignore complex industrial realities. The Kremlin hopes this will unlock financial resources and force defense managers to mobilize their resources in any way they can. It’s still unclear how Russia will be able to achieve such a dramatic increase in drones without relying on off-the-shelf purchases, especially from China.
This campaign should be a signal for Kyiv and partners that investing in drone countermeasures as a priority is important, just as EU nations and NATO nations continue to increase their drone production to support Ukraine’s defence.
Editor’s note: The opinions expressed by the authors in the op/ed section do not reflect the views of Kyiv Independent.
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