Indigenous deals as the foundation of the Switchblade’s success in Ukraine
US-based uncrewed aircraft systems (UAS) manufacturer AeroVironment has benefited from the performance of its Switchblade loitering munition in Ukraine, with the system reportedly achieving significant success on the battlefield, which had driven further demand.
The foundations for the Switchblade’s success in Ukraine began in May 2020 as the US Army contracted AeroVironment for the Switchblade loitering missile system. Equipped with intelligence, surveillance, and reconnaissance capabilities, the Switchblade 300 can engage beyond line-of-sight targets and light-armoured vehicles across land, sea, and air-launched scenarios.
GlobalData’s “The Global Military UAV Market 2022-2032” report states that the global market for loitering munition segment is valued at $247m in 2022 and is anticipated to register a growth rate of 5.3% over the forecast period to reach $412m by 2032.
The Switchblade has been manufactured in two variants: Switchblade 300 and Switchblade 600, wherein the former has a lesser payload than the latter.
AeroVironment laid the foundations for its Switchblade success as they secured indigenous deals with the US Army and the USSOCOM, which then led to the US exporting the drone to eastern European countries as it faced possible or definite Russian threats.
Whilst the Ukraine war continues, the Switchblade’s profits and exports will continue as Ukrainian demand needs to be met, US inventory needs to be replenished, and new deals will be struck with eastern European nations as the threat of Russia grows.
GlobalData’s “U.S. Defense Market 2022-2027” claims the ongoing conflict and success of Ukrainian forces in using US weaponry to fight back against Russian advances means that the requirement for US aid will likely continue. This, and the need to replenish weapons stocks to send to Ukraine.
Russia’s invasion of Ukraine boosts demand as America defiantly sends Switchblades
The US has provided numerous weapons and large volumes of military aid to Ukraine. Shortly after the war began, the US decided to send Switchblade loitering munitions to the Ukrainians.
An AeroVironment spokesperson stated: “Loitering munitions such as the Switchblade are starting to show long-term effects on the battlefield in the war against Ukraine. As the benefits of these unmanned systems are becoming more evident, we’ve seen increased demand from across the globe for this technology.
“Switchblade was approved for sale to approved nations soon after the start of the Ukraine war, including our allies through NATO.”
Harry Boneham, a defence analyst at GlobalData, said: “It’s notable that in company filings, the company attributes its strong increase in funded backlog (16% increase year-on-year) to a rise in international demand directly resulting from the performance of their platforms in Ukraine. The explicitness of this statement underscores how much of an impact the war in Ukraine has had on their business.”
At the end of 2022, Balkan country Lithuania signed a $45m deal with the US to procure Switchblades to strengthen the country’s armed forces. It has been designed to provide precision optics to destroy targets in a direct downward attack.
Intense competition raises challenges for AeroVironment
AeroVironment designs, develop, and commercialises unmanned aircraft systems. However, it is operating in a competitive defence market. Many of its competitors have been working for longer, with greater brand recognition and more significant financial resources.
The AeroVironment spokesperson continued, talking about the company’s plans for the Switchblade and other loitering munitions in 2023.
“Long term, we’re forecasting international solid sales growth from US, NATO and Ukraine demand, and targeting market opportunities with high growth potential. We have six product lines today geared toward customer success in all domains, including the current war in Ukraine. Our platforms are proven technologies that are making an impact every day and dominate the US Department of Defense arsenal.
“We have continuously leveraged advancements in new technologies such as advanced processors, cameras, batteries and secure data links for our Switchblades and other UAS. But more significantly, we have listened and learned from our users. Their continuous feedback has been invaluable in helping to focus our engineering efforts to further adapt our systems for improved mission performance and battlefield survivability.”
Asia-Pacific potential as Taiwan eyes up Switchblade deal
Reportedly Taiwan is considering purchasing up to 100 Switchblades in 2024. With the impending threat of China looming over Taiwan, the island nation is seeking to buy the small attack-type uncrewed aerial vehicle and give it to the Taiwanese Army’s special forces.
GlobalData’s “Taiwan Defense Market – Attractiveness, Competitive Landscape and Forecasts to 2027” report claims the threat of a Chinese invasion of Taiwan is currently an issue of concern for the US. The US DoD is looking to support its allies in the region, creating a strong pro-US presence in the Indo-Pacific and protecting its interests.
The invasion of Ukraine by Russia raised concerns that China may mirror the conflict and take control of Taiwan by force. The US has committed to ensuring Taiwan remains independent and upholds a close military relationship.
In mid-September 2022, the US Senate approved a bill for financing weapon exports to Taiwan for the first time. This bill will provide Taiwan with weaponry valued at $4.5bn over the next four years. This bill follows a summer of Chinese military drills after Nancy Pelosi, Speaker of the US House, visited Taipei.
GlobalData’s “US Defense Market 2022-2027” report claims that between 2022 and 2032, Asia-Pacific is set to account for the largest share of the loitering munitions market at 59.7%, respectively, followed by North America at 18.0% and the Middle East at 13.9%.”
Taiwan has taken a closer look at such suicide drones after noticing their success on the Ukrainian battlefield.
GlobalData’s “Taiwan Defense Market Data 2022-2032” report shows that Taiwan’s loitering munition’s value in 2022 was $83.10m. However, it is expected to grow to $150m in 10 years.
