In response to concerns that the swelling European defense budgets would drive up demand and prices for armored vehicles and artillery, Papperger states that "prices will fall and not rise". The reason is economies of scale and increased automation.
According to Papperger, the price of ammunition has already fallen since Rheinmetall has increased its production capacity tenfold over the past three years in response to increased demand.
So far, similar scale benefits have been more difficult to achieve for main battle tanks and armored vehicles. But Papperger says that Rheinmetall expects "thousands and thousands" of orders in the coming year for Boxer and Puma vehicles, as well as for the Leopard 2 main battle tank, for which Rheinmetall manufactures the turret.
Rheinmetall has become one of the big winners of the significant increase in European defense spending in the wake of Russia's full-scale invasion of Ukraine in 2022. The stock has risen sharply since then and the company is now valued at 72 billion euros, equivalent to 806 billion kronor.
