13.09.24 Review

Kiel Warning: The successful expansion of defence production gives Russia an advantage in the early stages of a potential direct conflict with Europe


Faced with the need to fight a prolonged war, Russia has significantly increased its arms production rate, bringing it to a level that far exceeds the current capabilities of, for example, Germany, the strongest economy in Europe.

Experts at the Kiel Institute estimate that the pace of Russian military production may have almost tripled since the beginning of this year. The most significant impact on the advancement of the Russian army comes from the increased output of armoured vehicles. However, the high production and supply rates are likely due to the use of ready-made hulls from Soviet reserves. The growth in air defence systems production is also largely explained by the modernization of older complexes. At the same time, thanks to the active expansion of military production, Russia has gained the resources to equip new units with up to 20,000 personnel.

Due to its expanded military production, Moscow would likely have an advantage in the early stages of a direct military conflict in Europe. Although Germany's GDP is nearly twice that of Russia’s, and the combined GDP of NATO’s European countries is almost 10 times greater, this advantage stems from the fact that Europe is still in an era of ‘long peace’, which began some 40 years ago. Meanwhile, when it comes to organising its production capabilities, Russia has already entered a new era of preparation for a large conventional war of a new type.

Although the number of European NATO countries that have increased their defence spending to 2% of GDP has sharply risen over the past year, they still lag critically behind in the pace that they are building their defence capacities, which is a key condition for sustainable defence capabilities. Europe's lag and the potential advantage it gives Russia in the early stages of a possible conflict, in turn, increase the likelihood of such a conflict.

During its war against Ukraine, Russia has significantly increased its military production, bringing it to a level that far surpasses the current capabilities of Germany, according to a report by the Kiel Institute for the World Economy. Experts at the institute estimate that the Kremlin began shifting its industry to a wartime footing in October 2022, when the failure of the war’s initial phase became clear. This phase was marked by poor operational planning and a high consumption of material resources on the Russian side. For example, in the summer of 2022, in Donbas, Russian forces were expending 60,000 shells per day, which, if sustained for a year, would exceed the total global production of shells.

However, after painful defeats near Izyum and Kherson, the Kremlin decided to carry out mobilisation and restructure its industry to be prepared for a prolonged war, while also gradually improving the quality of military planning. This approach ultimately allowed the Russian army to increase pressure along the front line, leading to the capture of Bakhmut in May 2023 and Avdiivka in February 2024, followed by a large summer offensive. All of this was made possible by a steady supply of weaponry.

To assess the scale of these supplies, experts from the Kiel Institute analysed the composition of Russian forces in Ukraine, estimating how different battalions (motorised rifle, tank, artillery, etc.) should be equipped, taking into account weapons consumption and troop depletion. As a result, they estimate that Russia’s military production has roughly tripled since the beginning of the year. Tank production, for instance, rose from 123 units in the fourth quarter of 2022 to 387 in the second quarter of 2024 (a 3.2-fold increase); BMPs and APCs rose from 585 to 1409 (2.4 times); artillery from 45 to 112 units (2.5 times); multiple rocket launchers from 15 to 38 (2.5 times); short-range air defence systems from 9 to 27 (3 times); medium- and long-range air defence from 6 to 12 (2 times); and Lancet drones from 93 to 535 (a 5.75-fold increase). However, these estimates assume that Russian units are fully equipped with weapons, which is likely far from the case.

Nevertheless, the progress in weapons supplies is undeniably impressive. The most noticeable impact on the Russian army’s battlefield performance comes from the increased production of armoured vehicles, including tanks, BMPs, and APCs, which play a key role in the success of offensive ground operations by providing protection to infantry and enabling effective attacks. However, analysts attribute the extremely high growth rate in armoured vehicle production to the fact that 80% of this output uses pre-existing hulls from Soviet stockpiles (which could also explain the inflated growth figures in Russian industry). These reserves are expected to run low by 2026, leading to a sharp decline in supplies to the military. The growth in air defence production is also largely due to the modernization of older systems, the report states.

Another bottleneck in Russia’s military production is artillery barrels, which wear out quickly in combat conditions. Although the current production rate is sufficient, the Russian army’s future needs for such weapons will increase significantly, as its combat operations primarily rely on artillery.

At present, Russia has an excess of ammunition thanks to supplies from North Korea. By mid-2024, Pyongyang had delivered up to 4.8 million shells, as well as various types of missiles to Moscow, according to researchers' estimates. Military analysts widely agree that Russia is capable of producing an average of 10,000 shells per day. Experts from the Kiel Institute calculated that at this rate, German ammunition stockpiles would be exhausted in just a few days, while Germany’s defence industry can produce enough shells annually to sustain only 70 days of such firing intensity.

Russia has also successfully addressed its lag behind Ukraine in drone technology. In 2022, Kyiv led both in terms of the quantity and quality of drone production. However, Moscow gradually caught up, developing its own innovative drone ecosystem. The most effective of these is the long-range Lancet loitering munition, capable of striking up to 70 km deep into Ukrainian territory and equipped with a powerful enough warhead to destroy tanks, artillery, and air defence systems. The combination of Lancet strikes and ballistic missile use, aided by drones, had a devastating impact on Ukraine’s rear defence systems in 2024, the researchers note. However, producing Lancet drones is technically complex and resembles rocket manufacturing, which limits production rates.

Thanks to the active military construction of the last two years, Russia has acquired the resources to form three new units, with a total potential strength of up to 20,000 personnel, which could be deployed to the front in Ukraine as early as this autumn, according to the report’s authors. The main lesson for Europe, in their view, is the speed with which Russia resolved the issue of replenishing its ammunition stockpile, a key factor in maintaining army resilience, particularly in air defence. Despite Germany's GDP being nearly twice that of Russia, and the EU’s GDP being almost 10 times larger, the critical factor is how quickly military production can be scaled up. Russia’s current production rates allow it to manufacture as much military equipment in six months as Germany’s entire current arsenal, according to the Kiel Institute analysts.

In a direct conflict between NATO and Russia, which Putin has mentioned in connection with the expected decision by Washington and London to launch Ukrainian strikes on Russian territory, Moscow's current rate of military construction is likely to give it an advantage in the initial phase of a conflict. Of particular concern to the Kiel Institute researchers are Russia's supersonic and hypersonic missiles, with which Moscow could deliver a painful blow to NATO infrastructure in European countries.

That said, a direct military conflict with Moscow is unlikely to unfold exclusively as a Russia-Germany confrontation. The report does not provide an assessment of NATO’s overall European forces and weapons or the capability of all alliance countries in Europe to expand military production. Nevertheless, the main concern of the report’s authors is that the conflict in Ukraine has allowed Russia to scale up its military industry, while Germany and European countries in general continue to exist in the era of ‘long peace’, which began in Europe about 40 years ago. This creates a temporary advantage for Russia in the early stages of a potential direct conflict, while the likelihood of such a conflict is inversely proportional to Europe’s preparedness for it (→ Re:Russia: Waiting for War).

NATO countries' realisation of their mission within the new geopolitical reality is happening slowly, partly because European voters largely still see the Russia-Ukraine conflict as not directly affecting them. However, according to Chekhov’s famous rule, the gun hanging on the wall in the first act must inevitably fire in the fourth. The defence capabilities that Russia has deployed are such a gun. While the number of NATO countries spending at least 2% of GDP on defence has increased from three in 2014 and seven in 2022 to 23 today, and NATO soldiers' readiness for war (including in Europe) has improved (→ Re:Russia: Going Backwards), the issue of achieving parity in the early stages of a conflict remains unresolved. Military production capabilities still reflect the mindset of the ‘long peace’ era rather than the new era of ‘the likelihood of a new conventional war’.