The economics of mass-producing combat drones is not a single number problem. It is an industrial design, supply chain, and procurement puzzle wrapped around mission definitions. If you want thousands of systems, cheap per-unit price alone is necessary but not sufficient. You need repeatable manufacturing, resilient supplier networks, realistic logistics for sustainment, and procurement rules that reward scale rather than bespoke engineering theater. I have spent years building prototypes for defense contractors. The hype says just press a button and flood a battlefield with cheap robots. The reality is messier and it matters for doctrine and budgets.

Start with categories. The United States Air Force popularized the term attritable to describe uncrewed aircraft that are affordable enough that loss in combat is tolerable. The service framed a target cost range for such systems in the low millions rather than tens of millions. That gives program managers a useful budgeting envelope and forces designers to trade away marginal capability for producibility and low cost.

But target ranges are aspirational until the production line proves them. Commercial examples and defense demonstrators show how unit costs fall with quantity and with deliberate simplification. Kratos and other firms building “loyal wingman” or medium-sized attritable air vehicles have publicly discussed per-unit costs that look painful at low rates but drop as factories mature and volumes grow. Those vendor claims are instructive because they show the levers that actually move price: simpler airframes, fewer bespoke subassemblies, and tooling investment that spreads fixed costs over many units.

Contrast that with the cottage industry model that emerged in Ukraine in 2022 and early 2023. Volunteer groups and small firms converted hobby racing drones into lethal, one-way attack vehicles. Some groups reported per-unit production costs in the hundreds of dollars and monthly throughput measured in the hundreds or low thousands. That example is important for two reasons. First, it proves a low-cost baseline is feasible when designers embrace commercial off-the-shelf components and low-complexity designs. Second, it shows decentralized production can surge quickly in wartime if capital and skilled labor are available locally. But it is not a direct template for larger, more capable systems because durability, maintainability, logistics, and training become constraints once you move beyond one-way munitions.

If you are designing an economic model for mass production there are three industrial pathways to consider, each with different cost profiles and operational tradeoffs:

  • Heavy prime production. Traditional defense primes invest in tooling, automated composite layup, and rigorous test systems. Upfront capital is high. Unit cost falls with rate but only after a long lead time. This model buys reliability and integration with existing sustainment chains. It is the default for medium and high end unmanned systems. Evidence from industry proposals shows per-unit costs can be several million dollars at low rates but with technical scope to shrink toward the low millions at higher cadence.

  • Distributed small-batch manufacturing. This is the Ukrainian/volunteer model. Low barrier to entry, fast iteration, rapid scaling within a local supplier ecosystem. Unit cost is minimal because of COTS components and manual assembly. The tradeoff is variability in quality, limited lifecycle support, and fragmentary logistics. It is excellent for massing cheap, expendable effects but poor for long-term fleet maintenance or complex missions.

  • Hybrid modular production. Design the drone as a set of standardized modules: airframe, propulsion, power, payload, and a common avionics bus. Let a prime factory handle high-tolerance assemblies while smaller firms or regional facilities produce modular subassemblies. This lowers entry cost for suppliers, shortens lead times for capacity expansion, and captures many benefits of COTS while preserving quality control. The learning curve and unit-cost reductions in this model are real if the architecture is locked early and suppliers are given predictable orders.

Across all models the basic industrial economics follow the same laws. Fixed costs like tooling, jigs, test rigs, and certification dominate early outlays. Repetitive labor, supply logistics, and parts costs dominate marginal cost. Expect per-unit cost to follow a classic experience curve: sharp early declines as production problems are ironed out, then slower reductions as the line is optimized. The only way to accelerate that curve is committed volume and funding to underwrite factory investment before cash flows from sales appear.

Procurement strategy is the other side of the coin. Cost-plus contracts are safe for novel R&D but hinder the market signals needed for scale. Fixed-price production contracts with clear performance baselines incentivize suppliers to find cost reductions, but they must be paired with realistic transition risk sharing. A practical hybrid is a phased buying approach: initial low-rate initial production under cost-plus or incentive-type contracts to mature the design, followed by firm fixed-price production awards with volume and options that give suppliers predictable cash flow to invest in tooling. National security justifications sometimes require sole-source urgency. Even then, contract design should bake in unit price reductions tied to agreed production milestones.

Supply chain realities will kill any mass-production plan that ignores single-source bottlenecks. Motors, ESCs, batteries, RF links, IMUs, and specialized semiconductors are chokepoints. In 2023 the maker community and some defense reports repeatedly pointed out that cheap drones were possible because the same global consumer supply chain serviced hobbies and industry. That is a strength you should plan to exploit, but you must also plan for component shortages, export restrictions, and the need for secure logistics for military-grade builds. Sourcing strategies include dual-sourcing, bottleneck inventory buffers, and qualification of commercial alternatives.

Finally a word about operational math. Cheap attackers and expensive interceptors create a cost-exchange problem. If a defender expends a high-cost missile to kill a low-cost drone, budgets and stockpiles lose rapidly. That reality drove the early conversation about attritable systems in part because the defender needs options that are price commensurate with the threat. Examples from air defense literature show interceptors can be orders of magnitude more expensive than projectiles or low-cost drones, which is why defenders are experimenting with lower-cost point defense, directed energy, and layered counter-UAS mixes. The implication for producers of combat drones is twofold. First, offensive systems should factor the defender’s likely economics into mission design. Second, governments must budget the full lifecycle cost of fielding mass drones: procurement, spares, munitions, training, transport, and even the cost to replace lost inventory. Otherwise the headline per-unit price is a lie.

Recommendations for a defensible economic model:

1) Define the operational requirement tightly. Cheap is not the same as suitable. Make engineers design to mission profiles that accept simplicity by design.
2) Lock the architecture early and modularize. Standard interfaces let multiple suppliers compete on subsystems reducing single-vendor risk.
3) Finance factory investment up front. Use option awards and production-rate milestones to force suppliers to internalize scale economics.
4) Hedge the supply chain. Qualify COTS and military-grade alternatives for the same subsystem and maintain buffer stocks for critical parts.
5) Pair procurement with doctrine. If the goal is mass attritable effects, field countermeasures and sustainment budgets should be rebalanced accordingly.

If you want mass-produced combat drones you have to stop treating them like software and start treating them like aircraft and ammunition at once. That means factories, supply chains, maintenance depots, and procurement rules that reward scale. The cheap DIY kamikaze that made headlines in 2022 and early 2023 proves a point about affordability. The attritable programs and industry demonstrators show where formal procurement is trying to take that concept to mature capability. Neither side is magical. Both require honest industrial economics and hard work on the shop floor to reach useful scale. If you are a planner, investor, or program manager, build your models around production realities not marketing promises.