U.S. defense contractor Lockheed Martin on July 20 introduced a lower-cost Patriot interceptor called the PAC-3 Adapted Capability Effector (PAC-3 ACE).
The company said the new interceptor will cost less than half as much per unit as its current flagship missile, the PAC-3 MSE.
The U.S. Army’s fiscal 2026 budget request includes funding for 224 PAC-3 MSE missiles at a unit cost of $3.871 million, including the missile itself, supporting hardware, and production resilience measures.
Lockheed Martin said the new interceptor is built on the same guidance system as its pricier sibling.
Engineers reused the PAC-3 fire-control software, and the missile links directly into the existing Patriot system and the Integrated Battle Command System, a network that connects different air-defense weapons so they can share targeting data.
Lockheed Martin said the PAC-3 ACE is intended to shorten development and testing, allowing production to begin faster than with a traditional missile program.
“American and allied warfighters need a solution that is battle-tested and budget-smart, and PAC-3 ACE delivers exactly that by building on the unrivaled performance of the PAC-3 MSE,” Tim Cahill, president of Lockheed Martin Missiles and Fire Control, said. “As we look to partner with our allies, we can further enhance resiliency and ensure our forces can swiftly counter emerging threats today and tomorrow.”
Defense Production
The launch follows several years of rising demand for Patriot interceptors as the United States and its allies replenish stockpiles and respond to growing missile and drone threats.
The Patriot system has been widely used to defend against ballistic missiles, cruise missiles and aircraft, including in Ukraine and the Middle East.
On April 9, the U.S. Army awarded Lockheed Martin a $4.76 billion contract to increase production of PAC-3 MSE interceptors. The contract runs through June 2030 and is intended to expand supplies of one of the Pentagon’s most widely used air-defense missiles.
A Patriot missile PAC-3 system on display in South Korea in 2008. (Jung Yeon-Je/AFP/Getty Images)
On July 7, it signed a memorandum of understanding with the German arms manufacturer Rheinmetall to establish the first European production center for the Army Tactical Missile System (ATACMS).
The companies said the agreement, supported by the U.S. and German governments, is the next step toward creating a joint venture to manufacture, integrate, and distribute ATACMS missiles for NATO members and allied European countries.
“By combining Lockheed Martin’s unmatched missile expertise with Rheinmetall’s manufacturing excellence, we’ll deliver combat-proven capabilities faster and more efficiently to our allies,” Lockheed Martin International President Jay Pitman said.
Earlier this year, Lockheed Martin also expanded its U.S. manufacturing partnerships.
The company also signed a memorandum of understanding in June with GM Defense, the military subsidiary of General Motors, to increase defense production using commercial manufacturing techniques.
A display shows a Lockheed Martin PAC-3 Missile at the Singapore Airshow 2010 in Singapore on Feb. 2, 2010. (Roslan Rahman/AFP/Getty Images)
Frank St. John, Lockheed Martin’s chief operating officer, said the company’s ability to expand production is as important as developing new technologies.
He said the partnership would bring together “two leaders in American manufacturing and innovation” to strengthen the U.S. defense industrial base, expand production capacity, and speed up the delivery of military equipment for the United States and its allies.
Lockheed Martin says it develops defense technologies across the air, land, sea, space and cyber domains, including systems for the U.S. government’s proposed Golden Dome missile defense shield.
Kimberly Hayek and Bill Pan contributed to this report.
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