The world wants Ukraine’s cutting-edge drones, but they aren’t yet for sale
Kyiv says it needs all its drones for the battlefield, but manufacturers insist the foreign revenue from exports would let them expand their production.
KYIV — Foreign drone companies are swarming Ukraine, hoping to be a part of one of the most exciting unmanned vehicle production hubs in the world. There’s one problem: Ukraine’s drone makers are severely limited in exporting their production and know-how.
Drone use and production have skyrocketed in the war between Ukraine and Russia, now in its fourth year, because of these machines’ low cost and deadly effectiveness. The constant battle-testing has accelerated the pace of evolution for the drones,with changes taking place within weeks instead of years.
“The speed of innovation is so quick: It’s a six-week cycle and then it’s obsolete,” said a European diplomat who spoke on the condition of anonymity because he was not authorized to speak to the media. Ukraine’s drone market is “like a watering hole in the Serengeti — all are coming.”
For Western countries, who wish to avoid doing business with Russia, Ukrainian drones are the preferred choice. Among the most sought-after items are long-range attack drones, sea-born drones and drones with advanced electronic warfare capabilities, industry experts say.
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Ukrainian drones in particular are adept at overcoming the electronic warfare countermeasures saturating the battlefield that foreign drone companies have yet to confront.
But selling Ukraine’s military production to outside buyers is extremely difficult because for a country at war, every piece of equipment is needed on the front lines, officials say. On paper, Ukrainian drone manufacturers are allowed to export their production, but in reality, this process is slow and bureaucratic.
“If NATO countries want the gold standard in drones, then they want Ukrainian drones,” said Alexander Fergusson, a British-based drone manufacturer who has done extensive business in Ukraine. “But they can’t have them.”
A man works in a drone production facility on April 5, in eastern Ukraine. (Ed Ram/For The Washington Post)
Model drones stand on the shelf in the office of Mykhailo Fedorov, Ukraine’s minister of digital transformation, in Kyiv. (Ed Ram/For The Washington Post)
Ukraine’s 500-some drone producers, most of which are private start-ups, say the issue is critical and they need to export. They say that they are struggling to increase production, and the added revenue from exports will allow them to expand.
They need this extra capacity to keep up with Russia and its much larger industrial base as it launches nightly devastating attacks against Ukraine’s cities. Thanks to a joint production venture with Iran, Russia now sends 500-600 drones per attack, and Ukrainian officials say it is on track to launch up to 1,000 at a time. The D.C.-based Institute for the Study of War said in July this number could reach 2,000 by November.
But the export situation could improve soon.
In June, President Volodymyr Zelensky told journalists that in the coming months, Ukraine would “sign relevant agreements to start exporting our technologies abroad in the format of opening production lines in European countries” under a Build With Ukraine program.
This production would be “for us and for them,” he said, and would include “drones of various types, missiles and, possibly, artillery.” He announced agreements in which Ukraine would export its technological know-how to manufacture drones in Denmark and Britain for Ukraine.
Zelensky in August also talked about a proposal to the United States for a “large-scale” five-year drone production deal “worth $50 billion,” but he added that this would probably not happen until after the war.
The latest sign of movement has been a new measure passed by the parliament in August — but not yet signed into law — to create the “Defense City” legal structure for top Ukrainian military producers, allowing them to enter into joint ventures with Western partners.
The companies could set up production lines in Ukraine and abroad and produce for Ukrainian and foreign markets. They would also receive tax breaks, simplified customs and export procedures, and increased security measures as protection. It still leaves the actual rules governing exporting up to the cabinet.
A soldier puts tape on a munition that will be attached to a drone, on Aug. 14 in the Donetsk region of Ukraine. (Ed Ram/For The Washington Post)
Large drones in a warehouse run by Ukraine’s 82nd Brigade, in the Donetsk region. (Ed Ram/For The Washington Post)
Danylo Getmantsev, chairman of parliament’s finance committee and one of the main authors of the legislation, said that exports are critical, as they will provide revenue to expand Ukraine’s defense industry.
Ukraine’s annual domestic military production is close to $10 billion, but its capacity is close to $30 billion, he said. At the same time, Ukraine’s Western allies are restricted in their ability to directly finance the country’s military sector, and Ukraine’s tax revenue is too low.
“We have the potential for growth, but we need money, and we need orders — we need somebody who will pay for these weapons to make our companies work. This is the idea behind this law,” Getmantsev said in a recent interview, adding that the law was now awaiting Zelensky’s signature.
But some of Zelensky’s own officials are calling for maintaining export restrictions. In July, newly appointed Defense Minister Denys Shmyhal told the BBC that “direct export is impossible to imagine.”
Shmyhal said that there could be “partnership projects, when some [weapons] remain in the warehouses of partners,” and that it was “possible to form strong arms exchange chains with partners.” But Ukraine’s armed forces must first receive “100 plus percent” of what they need. “If there is a surplus of production, we must find ways to finance it and give it to our armed forces.”
Shmyhal’s comments confused some Ukrainian arms manufacturers, who had believed that restrictions would be lifted soon. “Shmyhal broke down everything that Zelensky has built up over the last months,” said one Ukrainian drone producer, speaking on the condition of anonymity because of the sensitivity of the issue.
Drone manufacturers in Ukraine said they need the foreign funding and cooperation to scale up production, hire more workers and invest in research and development — as well as repair facilities under constant Russian assault.
A limit on exports also restricts Ukraine’s ability to obtain crucial technology from the West that would come with joint ventures, said Kateryna Mykhalko, director general of Tech Force in UA, an umbrella organization for the defense tech industry. Tech Force wrote an open letter with 36 tech defense companies to Zelensky in May, asking to loosen export restrictions.
“When export is closed, you cannot share your experience with European Union companies and you cannot start joint ventures to ask international companies to share the experience with you,” she said.
Service members monitor drone feeds at a command post near Pokrovsk, Ukraine, on Aug. 13. (Ed Ram/For The Washington Post)
A drone feed at the command post shows damaged buildings. (Ed Ram/For The Washington Post)
Ultimately, regular Ukrainians could pay the price. Without funds to ramp up production, Ukraine’s own drone fleet, including its efforts to develop autonomous drone interceptors, will lag far behind.
Even if the rules for export are lifted, however, Ukrainian officials caution that the countries that drone producers could sell to may be limited.
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“Export controls of dual-use products are always a political issue for any government,” said Yaroslav Azhnyuk, founder and CEO of Fourth Law, which is developing AI for drones. “The thinking obviously is that the exports of such products is not only a matter of economics but also a matter of politics — and the government has to decide who are we going to trade with.”
Large parts of Asia and Africa could be off-limits, Ukrainian officials say — for fear that Ukraine’s technology could fall into Russian hands or help countries that support Moscow.
Oleksandr Khomiak, director of Drone Space Labs, a defense start-up, said that Ukraine would “lose out in some of the markets where Russians are also active.”
“It’s not just about the money; it’s about political influence,” he said.
A separate set of risks could also arise once the export market is open, the drone executive said: Ukrainian drones could fuel conflicts and terrorism around the globe.
The situation was similar to “when the Soviet Union collapsed, and Ukraine became a massive exporter to Africa.” Now you could have this on an “unprecedented scale,” he said.
“I’m generally for exports, but this is like opening some type of Pandora’s box that will have massive negative implications.” He said that “at least once a week,” he receives a new inquiry to purchase drones. He called many of these inquiries “super suspicious.”
“I’ll get an inquiry like, ‘I’m a businessman in the South of France and I want some systems for Doha to send to Congo,’” he said. “I’m like, ‘No, it’s not our business from a brand equity perspective. Killing people in Africa is not what I’m politically aligned to.’”
