The New World Leader in Drone Production

Last week, we learned that Elon Musk unilaterally intervened to keep Ukrainian drones from attacking Russia’s navy. 

Fortunately, that wasn’t enough to stop Ukraine from defending its homeland. 

To the contrary, Ukraine’s proficiency with drones has left an indelible mark on the flagging Russian military and the world at large.

"The experience we are getting right now is unique, in terms of its usage, constant improvement of technologies, the research and development process, and scaling the production," Ukrainian Vice Prime Minister Mykhailo Fedorov recently told Newsweek.

“After the war ends, Ukraine will have a unique experience and every chance to become a major exporter of UAVs in the world. After all, each of these drones has not just been tested at a training ground somewhere, it has been tested in a real war. I am sure the Ukrainian experience of drone usage in this war will be studied by other countries in the future."

Indeed, Ukraine has acquired the kind of experience and success that could well make it a world leader in UAV production.

Just to highlight a few examples…

Last week, Ukrainian Shark drones uncovered about a half dozen surface-to-air missile (SAM) batteries in the hotly contested Zaporizhzhia region. 

Within a few minutes, they were targeted and destroyed by U.S.-supplied HIMARS (High-Mobility Artillery Rocket System).

Sharks are 100% manufactured in Ukraine. They have a range of 50 miles, have a maximum speed of 80 mph, and can fly for four hours at a time.

They’re also highly resistant to countermeasures, which means they can collect and relay intelligence through electronic disruptions like jamming.

Meanwhile, Ukrainian Beaver drones have been menacing Moscow with kamikaze attacks on government office buildings.

These are small drones with a range of more than 600 miles, and they’ve been able to either overwhelm or slip past Russian border defenses to do their dirty work. 

Seaborne or marine drones have been a factor, too. 

Last month, what are effectively remote-controlled boats packed with explosives assailed Russia's Novorossiysk naval base on the Black Sea.

In the wake of the attack, a Russian ship, the Olenegorsky Gornyak, could be seen listing in the harbor, its port side slinking into the water.

Ukrainian forces even disseminated a video to prove it. Shot from the bow of a tiny vessel, the video showed the drone speeding into the side of the massive ship just as the camera feed cut out.

It wasn’t the first time these drones had been deployed to such great effect, either. 

In July, one crashed into a support structure of the Kerch Bridge — a vital 12-mile-long artery that connects Crimea to Russia — causing a partial collapse.

These attacks have been commonplace for almost a year now, going back to last October, when 16 drones descended on Russia’s Black Sea fleet apparently to Elon Musk’s chagrin.

As I said, drone warfare has been a vital part of Ukraine’s defense, enabling it to compensate for disadvantages in personnel and firepower. 

Indeed, Russia has had the luxury of throwing waves of criminals and conscripts carelessly into the fray, but for Ukraine, preserving soldiers’ lives is of the utmost importance.

"The important thing is that UAVs allow us to save the lives of our military," says Vice Prime Minister Fedorov. “We believe that in this war, it's the drones who should fight and die, not people."

That, of course, is another advantage of using drones — they’re cheap and expendable.

Just a few thousand dollars' worth of drones have been responsible for destroying millions of dollars' worth of Russian equipment, whether it’s ships, tanks, or SAM batteries.

And that’s why Ukraine is so heavily invested. 

The country has partnered with more than two dozen schools to train 10,000 drone pilots. And the goal is to train 10,000 more. Additionally, the government has cut red tape to streamline and expedite the production and delivery of drones to the front line. 

It’s a necessary effort because the British Royal United Services Institute estimates the Ukrainians are losing around 10,000 UAVs per month.

That’s a lot of attrition, but the results are plain to see and production is only ramping up.

And, naturally, the domestically produced UAV fleet is being augmented by imports from the United States and Europe. 

The last U.S. aid package, which went out in February, included $2 billion worth of drones and ammunition. 

In fact, a UAV company I recently recommended in my Secret Stock Files investment service was a big beneficiary of that package, netting two separate orders. 

That same company recently saw its stock shoot up 30% in a single day last week, after it announced blockbuster earnings.

So if you want the details on that and other cutting-edge military tech, check out Secret Stock Files here.

Fight on,

Jason Simpkins

@OCSimpkins on Twitter

Jason Simpkins is Assistant Managing Editor of the Outsider Club and Investment Director of Wall Street's Proving Ground, a financial advisory focused on security companies and defense contractors. For more on Jason, check out his editor's page. 

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