Ukraine now builds far more weapons than it can afford to buy. A year ago, it promised to sell the surplus abroad and turn the proceeds back into its own army. However, 12 months later, that promise has barely materialized: a state fee of up to 30% is pricing Ukrainian arms out of foreign markets, and no one can say how much the army has actually gained, said Ihor Fedirko, executive director of the Ukrainian Council of Armorers.

President Volodymyr Zelenskyy announced the resumption of controlled weapons exports in October 2025, resting it on four promises: 1) sell what Ukraine makes beyond its own needs, 2) channel part of the proceeds into a special fund for the army, 3) open export offices in Europe and the US, and 4) establish joint ventures abroad.

The surplus is real: Ukraine's defense output is projected to reach $55 billion in 2026, far beyond what the state can finance. A year on, Fedirko checked each promise in turn.

1) Export of surpluses: rules that strangle businesses

On 1 July 2026, the government approved rules for controlled arms exports. They shortened the maximum application review period from 90 to 30 days, but also introduced an export fee: 20% for finished products and technologies, and 30% for components. For finished products exported under the special procedure, the contract value must be at least $334,000.

In September, the Ukrainian Council of Armorers, together with other associations, proposed a zero rate, no advance collection of the fee, refunds for deals that fall through, and simplified test shipments. The industry was promised that its amendments would be taken into account and that the resolution would be rewritten.

Even in early October, however, the rules still needed work. According to Fedirko, the new mechanism has effectively not started working. Whether it can bring in additional funds for defense depends on how acceptable the export terms are to manufacturers.

Fedirko says, though, that judging by current decisions, the state intends to keep the export fee.

“The industry is ready to discuss its contribution to defense financing. But the rate must be economically justified,” he says.

2) Procurement for the Ukrainian military: balance is only being established

He adds that the Ukrainian Council of Armorers intends to push for a rate significantly lower than 20%, one that would let companies fulfill contracts and invest in production.

With such high rates, Fedirko says, the competitiveness of Ukrainian weapons on foreign markets is in question, as is the ability to send even small test batches to potential buyers.

“The fundamental requirement is post-payment: after the contract has actually been fulfilled and the manufacturer has been paid. A company should not pay the state in advance a share of income it has not yet received,” he says.

He added that, given all this, the real export figures remain unclear, as does how much exports have actually brought the military.

“The military and manufacturers must feel the benefit of exports. I sincerely hope that next year will bring much better results,” he says.

In addition, on 12 October, the Ukrainian Parliament passed bill No. 15400 in the first reading. It provides for crediting the export fee to a special fund directed to the Ministry of Defense: 50% for the procurement, modernization, and repair of weapons and equipment, and 50% for the pay of Armed Forces personnel.

The bill has not yet been adopted, but Fedirko says he expects “final adoption and launch of the mechanism.”

3) Export offices: offices in Germany and Denmark

On 3 November, the Ukrainian government named the first cities for export offices: Berlin and Copenhagen. On 15 December, it again spoke of preparing an office in Berlin. In reality, Fedirko says he does not know the office’s status, and it likewise remains unclear how companies can apply to it and how many contracts it has helped close.

4) Joint ventures abroad: There are concrete results in this area

According to Fedirko, eight joint ventures have been created, five of which are already supplying products to Ukraine. He stresses that this is the result of work by Ukrainian companies, foreign partners and the state, and that it deserves recognition.

As early as February 2026, the authorities spoke of plans to create ten joint ventures in Europe within a year. At the same time, they announced Quantum Frontline Industries in Germany, with a planned annual capacity of 10,000 drones for Kyiv.

Beyond the number of ventures and deliveries, however, it is important to understand how other manufacturers can join the Build with Ukraine program.

“Who accepts applications, by what criteria are decisions made, and what support does a company receive?” Fedirko asks.

In other words, joint ventures are already delivering results, but the rules of participation and the state support mechanism must be clear to companies that want to develop production abroad.

Ukraine’s military intelligence (HUR) published a 3D model and parts list of Russia’s new Filin cruise missile on 22 October. The breakdown names the Russian companies behind the missile and the foreign makers of its electronics.

HUR runs its War&Sanctions portal to trace such parts back to their makers. Its stated aim is to “deprive the aggressors of the ability to produce weapons for terror,” the portal says. Meanwhile, Russia is betting on cheap, fast cruise missiles, Serhii Beskrestnov, a freelance adviser to the president on technology, told Radio NV in mid-September. Naming the Banderol, Dan-T, Dan-M, and Gerbera-5, he warned they would soon outrun Ukraine’s jet-powered interceptors, so Ukraine needed its own cheap missiles to shoot them down.

Composite body, ground launch

JSC NPO Molniya, part of Russia’s Tactical Missiles Corporation, builds the Filin, HUR said. The agency called it part of a Russian defense-industry trend toward cheap jet-powered, ground-launched air-attack weapons. Russia began firing it at Ukraine in late summer 2026.

HUR’s data puts the carbon and fiberglass fuselage at 3.5 m, with a 3 m wingspan. Some parts are 3D-printed. Russia claims a top speed of 800 km/h. The range is 600–1,200 km, and the missile flies at ultra-low altitude or up to 6 km. Versions carry 50-kg or 100-kg warheads. A solid-fuel booster fires it from a ground launcher.

A firm tied to a Shahed-type drone

PLAZ LLC makes the onboard equipment, HUR said. The firm also helps produce the Garpiya, a version of Russia’s Shahed-type Geran-2 drone. Filin and Garpiya units share a similar layout and markings. Guidance combines a Chinese-made inertial navigation system with a 16-channel Kometa anti-jamming module from Russia’s VNIIR-Progress.

The electronics resemble those in other Russian missiles and drones but carry a larger share of Chinese parts. Of 81 components, 35 are American and 22 Chinese. The engine, however, is Russian: an R500 turbojet from Reynolds LLC. A similar engine earlier turned up in the S-71K Kover aviation cruise missile and S-71M Monokhrom, HUR said.

For comparison, Ukraine found more than 20 foreign components in a different cheap missile, the Banderol, in May 2025. They included 10 US microchips, and the Banderol flies on a Chinese jet engine.

Ukrainian drone maker Wild Hornets is rethinking projects it is currently working on, including launching interceptors from aerial platforms, because of limits on SpaceX’s Starlink satellite internet. Spokesman Mike Orliuk told The War Zone (TWZ) this on 20 October. The company builds Sting interceptors, which it says destroyed over 15,000 Shaheds and Gerberas, a cheaper Shahed lookalike, in a year. Orliuk said Sting’s current operations are unaffected.

The stakes rise as Russia shifts to faster drones. Ukrainian defense technology adviser Serhii Beskrestnov counted more than 2,500 jet-powered Gerans, Russia’s version of the Shahed, in August. President of Ukraine Volodymyr Zelenskyy said on 16 October that these drones fly faster than 400 km/h. He added that some Ukrainian interceptors chasing them work through Starlink. When the link was slowed, Ukraine could not intercept some of them, he said.

How Sting stays connected

“Our own communications system provides the basic connection to our interceptors,” Orliuk said. The company’s remote-control technology can draw on various internet sources, he added, though the military often uses Starlink. Even then, the terminal does not need to move at high speed. It only links the command center to a ground station, which Orliuk compared to a cell tower.

“For these needs, everything is operating normally with Starlink at the moment,” he said.

An air-launch project under review

“Some drones carry a terminal on board and need to fly at high speed with it,” Orliuk said. “In such cases, Starlink’s limitations make their operation impossible.”

That is why the company is rethinking the air-launch project. Wild Hornets has made no clear decision yet but will test alternatives, Orliuk said. He declined to describe them.

“I believe, in any case, depending on a single solution is very risky,” he said.

Other firms share the concern

Orliuk said he has spoken with other companies that rely far more on Starlink and have expressed concerns. He pointed to growing interest in Europe’s Eutelsat network, though “creating something like Starlink won’t be easy.”

Who ordered the slowdown remains unclear. The order to slow Ukraine’s Starshield service came from inside the White House, two US officials and a Western official said. A US official told TWZ the president never made such a request. US Secretary of State Marco Rubio said on 17 October that the slowdown had “nothing to do with the White House” and called “a report on that” “categorically false,” without saying which report he meant.

Defence City, Ukraine’s special support regime for arms makers, now has 63 member companies, the Defense Ministry said in a 19 October release. That is more than double the late-May count, and Euromaidan Press calculations show the newcomers are, on average, much smaller firms.

Ukraine already buys most of its weapons at home. More than 75% of its 2025 weapons procurement budget went to domestic manufacturers. Most new weapons models cleared for military use are Ukrainian too: 892 of the 1,000 authorized from the start of 2026 to mid-June. Defence City is meant to turn that demand into more production capacity, and our calculations suggest it is now reaching smaller producers too.

Who is joining

Each resident’s figure in the ministry’s count is its qualified income, meaning revenue from selling weapons and military equipment. Applicants file details of their defense contracts for the previous calendar year with their application, the ministry’s guide shows. So the combined total changes as members join. It does not track month-to-month sales.

The 63 current residents have a combined qualified income of nearly $2.47 billion. At the end of May, 31 residents had $2 billion, the ministry reported. By July, 45 residents had over $2.07 billion, it added.

By Euromaidan Press calculations, the 32 companies added since May bring about $15 million each on average. The first 31 averaged about $64 million each. The math assumes all 31 early members remain, with unchanged figures. If they do, the newcomers are smaller producers on average, because each figure reflects a firm’s own prior-year weapons sales.

What residents get

The profit-tax break comes with a condition. Residents choose where their untaxed profit goes, but it must go to purposes the tax code allows, the ministry explained. If the money goes elsewhere, the break does not apply.

Residents also get customs incentives and state support to relocate plants and better protect production sites. They can rent state property without an auction. They can also ask to restrict access to sensitive information about them in public registries. Some defense export procedures are simplified too.

Resident status also makes a company eligible to be designated critically important to the defense industry. That lets it defer up to 100% of its staff liable for military service from the draft, the ministry noted.

To join, a company must confirm it meets the legal requirements and file an application with supporting documents. By law, the ministry has 10 working days to decide. If approved, a ministerial order grants the status, and the company enters the Defence City register.

Ukrainian company Nodrics has developed MAT1LDA, an eight-wheeled amphibious ground robot that can carry supplies across water, swamps, and rough terrain, robot-maker Tencore said, Ukrainian military outlet Militarnyi reported on 17 October. The machine joins Tencore’s new family of ground robots, which the company has also shown in the US.

Ukraine’s ground robots now haul supplies and evacuate wounded soldiers through zones where drones make every move deadly, and the Defense Ministry has launched its first competitive tender for them.

500 kg on land, 400 kg afloat

A petrol engine drives MAT1LDA’s eight wheels, and side pontoons keep it afloat, so it can cross water, marshland, and rough ground without preparation, Militarnyi said. Its makers claim it carries up to 500 kg on land and 400 kg on water, with a range of up to 160 km on land and 50 km on water.

Its open frame lets crews swap equipment quickly to suit the task, fitting cargo containers or evacuation stretchers.

Four robots, one system

MAT1LDA is part of the Tencore Ecosystem, which brings together four classes of ground robots for military and civilian work, Militarnyi reported earlier. Besides the amphibious eight-wheeler, it includes the tracked TerMIT, the wheeled TOR 4×4, and the TRAX Utility firefighting and rescue robot. The company says it has delivered more than 4,000 robots to Ukraine’s armed forces since the full-scale invasion, used across more than 50 brigades.

Tencore calls it Ukraine’s first integrated ecosystem of its kind. Putting the platforms into one system is meant to make them easier to use, maintain, and fit with extra equipment. One of the first shared add-ons is AI KIT, a hardware and software module that lets a robot keep to its route or drive back on its own after losing contact with its operator.

On show in Washington

Tencore displayed MAT1LDA carrying a TerMIT robot at the Association of the US Army’s annual trade show in Washington this month, Breaking Defense reported.

Other Ukrainian makers have built swimming ground robots too: one switches from land to water in seconds, and another can tow 10 tons, its maker says. In April, Tencore formed a joint venture with France’s Shark Robotics.