Half the price, but not now: Lockheed Martin is creating a new PAC-3 ACE missile for Patriot

The American company Lockheed Martin announced the development of a new interceptor missile PAC-3 Adapted Capability Effector, or PAC-3 ACE, intended for use in Patriot air and missile defense systems.

The main promise of the manufacturer is not to create an even more powerful missile, but to sharply reduce its cost and simplify production. One PAC-3 ACE should cost less than half the price of the modern PAC-3 MSE, which is about 4 million dollars, and can be even higher under certain contracts.

The project was a response to one of the most painful conclusions of recent wars: even the most developed countries were not ready to repel massive combined strikes for months. Russia uses ballistic and cruise missiles, decoys, and hundreds of drones against Ukraine simultaneously, and the confrontation between Israel and Iran and its allies also showed how quickly stocks of expensive interceptors can be depleted.

However, several years lie between the presentation of the new missile and its appearance in combat units. The initial production of PAC-3 ACE is expected to begin around 2028, and at the time of the announcement, Lockheed Martin did not yet have a confirmed Pentagon serial contract for this interceptor.

What PAC-3 ACE represents

Officially, the new missile was presented on July 20, 2026, at the Farnborough International Airshow in the UK.

The name Adapted Capability Effector can be translated as “interceptor with adapted capabilities.” The key idea of the project is already contained in the name: Lockheed Martin is not trying to build a complete cheap copy of the PAC-3 MSE but is consciously creating a missile with more limited characteristics.

PAC-3 ACE should use the existing fire control system of the PAC-3 family, be compatible with the Patriot complex, and integrate with the American air and missile defense command system IBCS. The use of ready-made software and existing architecture should reduce the time for development, testing, and subsequent deployment.

It is assumed that ACE will be able to hit:

• aircraft and other aerodynamic targets;
• cruise missiles;
• short-range ballistic missiles;
• part of short and intermediate-range ballistic missiles.

At the same time, the president of Lockheed Martin Missiles and Fire Control, Tim Cahill, specifically clarified that PAC-3 ACE is not being created to intercept drones. Other, even more affordable means are needed to destroy cheap drones — short-range anti-aircraft missiles, aviation, artillery systems, lasers, and electronic warfare complexes.

This is an important limitation. The new missile will not become a universal answer to massive attacks by Shahed and their analogs, which Russia is trying to overload Ukrainian air defense with, and Iran and its related structures — the defense systems of Israel and American bases in the Middle East.

PAC-3 ACE and PAC-3 MSE: what’s the difference

The modern PAC-3 MSE — Missile Segment Enhancement is the most advanced interceptor of the PAC-3 family. It uses Hit-to-Kill technology: the target is destroyed primarily by direct collision with the missile at high speed, not just by the explosion of a fragmentation warhead.

Such technology requires extremely precise guidance, a powerful engine, a complex seeker head, and expensive sensors. PAC-3 MSE is designed to combat tactical ballistic missiles, cruise missiles, aircraft, and some hypersonic threats.

A preliminary comparison looks as follows:

Financial Times reports that PAC-3 ACE can provide approximately two-thirds of the MSE’s range for about a third of its cost. The preliminary price is stated in the range of 1.5–2 million dollars, but the final cost will depend on testing, the number of missiles ordered, and the organization of production.

How Lockheed Martin plans to reduce costs

The main problem is that it is impossible to simply reduce the price of a high-tech anti-missile while retaining all its characteristics.

To make PAC-3 ACE cheaper, the company plans to lower the requirements for several of the most expensive components. This primarily concerns the solid-fuel rocket engine and the seeker head — the sensor system that detects and tracks the target in the final phase of flight.

A simpler engine may mean less range, altitude, or interception speed. A simplified seeker head may potentially limit the missile’s ability to detect especially fast, maneuvering, or decoy-protected objects.

Therefore, PAC-3 ACE cannot be considered a full replacement for PAC-3 MSE. Rather, it should become an additional defense echelon that will take on less complex targets and allow the most expensive missiles to be preserved for the most dangerous ballistic threats.

This logic is becoming the basis of the new Western air defense concept today: to destroy each target with the cheapest interceptor that can reliably perform the task.

Using a missile costing 4–5 million dollars against a relatively simple cruise missile is sometimes inevitable if it is about protecting a city, power plant, military base, or critical infrastructure. But in a prolonged war, such an exchange cannot be maintained indefinitely.

Why there is a global shortage of Patriot missiles

After the start of the full-scale Russian invasion of Ukraine, Patriot complexes became one of the most sought-after types of Western weapons.

Ukraine uses Patriot to protect Kyiv, major cities, energy facilities, and other critical infrastructure. PAC-3 family missiles are considered one of the most effective means available to Ukraine for combating Russian ballistic missiles. The Ukrainian Ministry of Defense also associates PAC-3 with the ability to intercept such complex targets as “Kinzhal,” “Iskander,” and “Zircon.”

However, the number of launchers alone does not solve the problem. Each battery requires a constant supply of missiles, and during a massive raid on one target, several interceptors may be launched simultaneously to increase the probability of a hit.

For readers of NAnews — Israel News, this situation is well known from the Middle East experience. Even a multi-layered missile defense system faces a serious load when the enemy simultaneously uses drones, cruise missiles, and ballistic means of attack.

Reuters notes that the demand for Patriot has sharply increased not only because of Russia’s war against Ukraine but also due to missile exchanges between Iran, Israel, and the United States, as well as general instability in the Persian Gulf region.

Production cannot keep up with consumption

In September 2025, the US Army signed a contract with Lockheed Martin worth 9.8 billion dollars for the production of 1970 PAC-3 MSE missiles and related equipment. At that time, it was the largest order for Patriot missiles in the company’s history.

However, even such contracts do not allow quickly filling the warehouses.

According to the agreement reached in 2026, Lockheed Martin should increase the annual production of PAC-3 MSE from about 600 to more than 2000 missiles. But the expansion is calculated for seven years: it is necessary to build new lines, find suppliers, increase the production of engines and electronics, and prepare qualified personnel.

US Army procurement system representative Brent Ingram admitted that PAC-3 was not initially designed with the requirements of mass and highly technological production in mind. Simultaneously, the US Army launched a competition to create another interceptor compatible with Patriot costing less than a million dollars.

This shows the scale of the problem. Even PAC-3 ACE with a declared price of about 1.5–2 million dollars is not the endpoint. The American military needs a whole range of missiles of different costs and complexities.

Why the new missile won’t help Ukraine right now

Lockheed Martin’s announcement may create the impression that the solution to the deficit has already been found, but this is not the case.

At the time of the presentation, PAC-3 ACE was not in serial production. The company expects to start initial production in 2028 or about 36 months after the project announcement. Before that, it is necessary to complete development, manufacture prototypes, conduct flight tests, and confirm the missile’s ability to hit the declared types of targets.

Moreover, the US government still needs to decide on funding and the volume of purchases. The presence of a promising project does not mean the automatic appearance of a large order.

Even the production of existing Patriot missiles cannot be increased in a few months. Experts interviewed by Reuters warned that building new capacities and organizing a supplier network would take significantly more than a year. The production of European GEM-T missiles in Germany, agreed upon back in 2024, is expected to deliver the first supplies only at the beginning of 2027.

Consequently, in 2026 and probably in a significant part of 2027, Ukraine will still depend on the transfer of missiles from existing American and European stocks.

The new PAC-3 ACE may become an important solution for the next stage of the war or for the post-war security system of Europe, but it cannot immediately meet the current needs of Ukrainian air defense.

Unclear effectiveness against the most complex Russian missiles

Another fundamental question is which ballistic targets PAC-3 ACE will be able to hit.

Lockheed Martin talks about short-range ballistic missiles and a certain part of intermediate-class targets. However, the exact indicators of range, interception altitude, speed, and probability of a hit are not disclosed.

The Wall Street Journal notes that the company did not report how effectively ACE will be able to counter the longer-range ballistic missiles used by Russia against Ukraine.

The reduction in engine and seeker head characteristics is especially important when dealing with ballistic targets. The higher the speed of the approaching missile and the more complex its trajectory, the less time the air defense system has to detect, calculate the meeting point, and launch the interceptor.

In the case of the most complex Russian missiles, Ukraine may still need PAC-3 MSE. The new ACE is likely to free MSE from some tasks but not replace it completely.

European production of PAC-3 ACE

Lockheed Martin is considering creating a wide European production chain for the new missile.

Tim Cahill stated that the company is negotiating with several European countries. In the future, PAC-3 ACE may be assembled from components produced predominantly or entirely in Europe.

For European countries, this has several advantages:

• reducing dependence on American factories;
• creating additional production capacities;
• reducing delivery times;
• developing their own defense industry;
• the ability to replenish stocks faster after transferring missiles to Ukraine.

For the United States, European production is also beneficial. It will allow distributing the load between enterprises, increasing the overall production volume, and preserving American capacities for supplying its own army and other strategic directions.

But negotiations are at an early stage. Partner countries, specific factories, and investment volumes have not yet been officially named.

What PAC-3 ACE can change for Ukraine

Upon successful completion of the project, Ukraine could receive a deeper and more sustainable ammunition supply for Patriot.

PAC-3 ACE can be used against cruise missiles, aircraft, and some ballistic targets, preserving PAC-3 MSE for the most dangerous strikes. Theoretically, for the amount needed to purchase one MSE, it will be possible to acquire two or even more ACE missiles.

This is especially important during combined attacks when Russia tries to force Ukrainian air defense to simultaneously respond to dozens of different objects.

The presence of different types of interceptors will allow the command to choose the missile depending on the target, its direction, speed, and the protected object. Instead of a single expensive response, there will be an opportunity to build a more flexible defense system.

However, PAC-3 ACE will not solve the drone problem. For Shahed and other cheap devices, Ukraine will still need separate mass interception means, the cost of which should be measured in tens or hundreds of thousands, not millions of dollars.

The significance of the project for Israel and the Middle East

For Israel, the appearance of more affordable interceptors also has strategic significance, even if PAC-3 ACE does not become a direct replacement for missiles of the Israeli systems Arrow, David’s Sling, and Iron Dome.

Israeli missile defense is built on a multi-layered principle. Different complexes are used for different altitudes, ranges, and types of threats. American systems and US forces deployed in the region can complement this architecture during large-scale conflicts.

The experience of confrontation with Iran has shown that the main threat is not a single missile, but a combination of quantity, speed, and variety of attack means. Even effective air defense must consider the cost of each interception and the speed of replenishing the ammunition supply.

As noted by NANews — News of Israel, modern missile defense warfare is increasingly turning into a competition not only of technologies but also of production capabilities. The winner is not the one who has a few of the most advanced missiles, but the one who can produce them faster than the opponent creates new threats.

The PAC-3 ACE is an attempt to change precisely this economy of war.

Why the decision came so late

Western defense industry has been built for decades around relatively small orders for extremely complex weapon systems.

It was assumed that high-tech missiles would be used sparingly, and conflicts would not require the daily expenditure of dozens of expensive interceptors over several years. Russia’s full-scale war against Ukraine shattered these calculations.

It turned out that air defense must simultaneously be precise, multi-layered, and massive. Technological perfection alone is not enough if a missile takes several years to produce, depends on hundreds of suppliers, and costs millions of dollars.

The PAC-3 ACE shows that the American defense industry has begun to adapt to the new reality. But the change in the production model is happening slower than the development of threats.

The new missile is important, but time has already been lost

The development of the PAC-3 ACE is indeed an important step.

Lockheed Martin is trying to create a missile that will be compatible with existing Patriot systems, capable of hitting a wide range of targets, and will cost approximately half as much as the PAC-3 MSE. Possible European production will further increase available capacities.

But for now, this is only a prospect.

The ACE is not intended to combat drones, its capabilities against the most complex ballistic missiles are unconfirmed, a serial contract has not yet been announced, and production is not expected to begin before 2028.

For Ukraine, this means that a saving and quick solution is still not available. In the near future, it needs existing PAC-3 MSEs, additional Patriot batteries, missiles of other types, and cheaper means to combat drones and cruise missiles.

The West is finally beginning to realize that missile defense must be not only effective but also massive. Unfortunately, this understanding comes late, the cost of which is measured not in military contracts and budget lines, but in destroyed cities and human lives.