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Ukraine's strikingly cost-efficient drones are getting the $7 billion boost they need for mass production

Europe says it's investing $7 billion into Ukraine's increasingly famed drone industry.
It comes after Ukraine's defense minister estimated that Kyiv needs $6 billion to cover drone costs.
It's paid by interest on frozen Russian assets, so it's not clear if all $7 billion is now available.

Europe is poised to inject $7 billion into Ukraine's drone industry, hoping to supercharge mass production for the country's increasingly renowned low-cost weapons.

The European Commission's president, Ursula von der Leyen, said on Wednesday that the European Union would "frontload 6 billion euros," or roughly $7 billion, for Ukrainian drones.

"Ukraine has the ingenuity. What it needs now is scale," von der Leyen said in her State of the European Union address.

The announced $7 billion would be the biggest official tranche of funding to Ukraine's drone industry so far.

It's close to the $6 billion that Ukraine's defense minister, Denys Shmyhal, has said Kyiv needs to cover this year's production of first-person-view drones, interceptors, long-range drones, and missiles.

While new, Ukraine's drone industry has increasingly been in the spotlight for producing cheap but effective weapons regularly being used to destroy Russian loitering munitions, armor, artillery, and production facilities.

Importantly, they also allow Kyiv's troops to harass and halt Russian ground assaults from afar, meaning additional or improved drones could further stifle Moscow's ability to advance or attrit Ukrainian forces.

The local drone industry is now seen as a globally leading force, driven by a wide range of domestic manufacturers and individual military units. Many of these firms and troops are often strapped for cash, partially relying on volunteer donations and crowdfunding to update their drones or stay afloat.

Ukrainian President Volodymyr Zelenskyy estimated in June that his country had the capacity to make 8 million drones a year, but lacked the funding to do so.

In her speech, von der Leyen said that Ukrainian drones were responsible for at least 23% of Russian equipment losses. Ukrainian officials have said that at least 70% of all reported hits in the war were caused by drones.

She also spoke of Ukraine's need to fight Russia's growing Shahed waves, indicating that the money could be used to fund the production of interceptor drones.

"So we can use our industrial strength to support Ukraine to counter this drone warfare," von der Leyen said.

Per von der Leyen, the funding will come from interest on frozen Russian assets.

However, it's not immediately clear how much of the $7 billion is now ready to be used in Ukraine. Europe estimates that frozen Russian assets can, at most, generate interest of roughly $3.5 billion a year.

Nor has the European Commission publicly detailed plans on how the money will be disbursed or monitored.

Spokespersons for the European Commission did not respond to a request for comment sent outside regular business hours by Business Insider.

Von der Leyen said that since 2022, Europe has contributed close to $200 billion in financial and military aid to Ukraine.

While drones are often associated with the first-person-view, or FPV, propeller platforms used to fly into enemy targets with explosives, Ukraine has also been experimenting with a range of uncrewed aerial, naval, and ground systems in combat.

More recently, it's been codifying more ground-based robots to relieve human soldiers from dangerous frontline combat tasks.

Some of Kyiv's long-range munitions are also drones, such as the winged platforms it's been using to strike Russia's production facilities hundreds of miles from the border.