The race to lower the cost-per-kill

What is being done to address the United States’ depleted stockpile of interceptors?

It is not just Patriot and Terminal High Altitude Area Defense (THAAD) interceptors, estimated to be as low as 80%, taking a few years to replenish. I’m told that in the Navy, for example, there is a “critical shortage” of SM-3 surface-to-air missiles which intercept ballistic missiles. Beyond the human cost, this is another toll of the wars in Iran and Ukraine.

Today, Patriots cost about $4 million per shot, while one Shahed drone from Iran is estimated to cost about $30,000. You do the math.

As a result, there is a race to make cheaper interceptors inside the defense sector — to lower the cost-to-kill, or the amount of money it takes to neutralize a target.

“The idea of creating lower cost interceptors is that you can free up systems like the Patriot to only shoot at more expensive or more technically difficult targets,” including ballistic and hypersonic missiles, former Pentagon official Matt Tavares told me. He consults with the private sector on this issue.

This summer, announcements have come rolling in among the defense primes — the largest companies working with the Defense Department.

In July, Lockheed Martin unveiled at a prominent airshow in the UK a cheaper Patriot interceptor, called the ACE, which stands for Adapted Capability Effector. Lockheed says it will cost less than half of what the gold standard, the PAC-3 MSE (Missile Segment Enhancement) costs, around $1.5 to $2 million. But it isn’t expected to fly until early 2028, with production starting some 18 months after.

In early August, Northrop Grumman revealed the Raid Hunter, a new 50mm gun-based air defense system. The company says it can take down cruise missiles and drone swarms.

Smaller firms are working on their own interceptors. And Ukraine is also working with 13 European defense firms to build an air defense system called Freyja, Reuters reported.

Matt explained how drones compete with missiles. “You really can’t talk about countering ballistic missiles and not talk about drones. Drones are competing with ballistic missiles for interception.”

Lt. Col. Adam Scher, spokesperson for Joint Interagency Task Force 401, which leads the Defense Department’s efforts to counter drones, told me by email that JIATF-401 is connecting with prime defense companies, venture capitalists, tech startups, and nontraditional defense firms.

“Cost-effective kinetic and non-kinetic defeat solutions show promise in countering the drone threat,” he said. “While we continue to pursue these advances, it is clear to JIATF-401 that there is no silver bullet to countering drones and there is not a one-size-fits-all package for every base or piece of critical infrastructure. We believe in creating a layered defense so the right tool can be used in the right circumstances, and the right approach can be tailored to each scenario.”

More in the video.

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