KYIV, July 11 — Ukraine is quietly rewriting the economics of modern warfare. The math is straightforward: domestically produced strike systems cost a fraction of their Western equivalents, and Kyiv is now betting heavily on that arithmetic to reduce its dependency on foreign-supplied weapons.
The mechanics here are worth unpacking. The Palianytsia, a jet-powered drone-missile first used in combat in August 2024, carries a range of up to 700 km. That puts the Engels-2 airbase in Saratov Oblast—650 km from the border—within reach. The Peklo drone, whose name translates to “Hell,” goes further, exceeding 1,000 km and theoretically capable of hitting the Shahed drone assembly plant in Yelabuga, Tatarstan, some 1,200 km away. The Neptune anti-ship missile, originally designed for a 280 km range, has been adapted for land attack and reportedly extended to 400 km.
The catch is production scale. In 2024, Ukraine ramped up its domestic drone output to over 1.5 million units per year, spanning both short-range FPV types and long-range strike variants. That industrial mobilization comes at a steep price: defense spending consumed 40% of the state budget in 2024.
Follow the money
The state-owned defense conglomerate Ukroboronprom and private manufacturers are the engines behind this build-up. The new long-range command, established to prioritize these systems, will focus on targets like Engels-2 and the Yelabuga assembly plant—facilities that Western-supplied weapons have sometimes struggled to reach due to political constraints on their use.
On closer reading, the strategic logic is clear. Every Palianytsia or Peklo launched from Ukrainian soil bypasses the diplomatic wrangling that accompanies requests for longer-range Western missiles. It also keeps the production chain—and the jobs and tax revenue it generates—inside the country.
The Neptune adaptation is particularly telling. Originally a naval defense weapon, its conversion to land attack mode signals a shift in doctrine: Ukraine is no longer just defending its coastline but actively building a toolkit for striking deep into Russian territory.
What to watch next
The 1,200 km distance to the Yelabuga plant remains a stretch for most current systems, though the Peklo’s range exceeding 1,000 km suggests Kyiv is closing the gap. The question is whether production capacity can keep pace with operational demand without further squeezing an already strained state budget.
For now, the numbers speak for themselves: 1.5 million drones a year, a 40% defense budget share, and a growing arsenal of indigenous long-range systems. The financial and industrial bet is that these numbers will translate into battlefield leverage—and a reduced reliance on foreign suppliers whose political calculations do not always align with Kyiv’s.
