Germany approves Rheinmetall KNDS tank project to complement the Leopard before MGCS arrival.

Germany has authorized Rheinmetall and KNDS Deutschland to expand cooperation for a future Bundeswehr main battle tank using the PSM joint venture, tied to an upcoming procurement that has not yet been formally awarded.

On December 15, 2025, Germany’s Federal Cartel Office approved an expanded cooperation between Rheinmetall Landsysteme and KNDS Deutschland for a future main battle tank for the German Army. The cooperation will use the existing PSM joint venture structure and is explicitly linked to a forthcoming, time-sensitive German Army requirement. The project is intended to complement the Leopard 2A8 while bridging the gap to the MGCS program.
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Everything points to this project being framed as an interim solution that complements the Leopard family, not a successor that would phase it out, as the Leopard 2A8 currently remains Germany’s reference main battle tank. (Picture source: German MoD)

On December 15, 2025, Germany’s Federal Cartel Office approved an expansion of cooperation between Rheinmetall Landsysteme GmbH, based in Südheide, and KNDS Deutschland GmbH & Co. KG, headquartered in Munich, for a future main battle tank intended for the Bundeswehr, to complement the Leopard 2A8. The approval allows the two companies to rely on an already existing joint structure rather than establishing a new corporate vehicle for this purpose. The decision is directly linked to an upcoming German Army requirement that has not yet been formally awarded, but which is described as time-sensitive. In parallel, the approval reflects a broader German objective to secure near-term industrial control over a new tanker while the longer-term Franco-German Main Ground Combat System (MGS) remains decades away. The context of the decision also includes ongoing industrial and political frictions between Germany and France over leadership and influence in Europe’s future tank programs.

According to Hardpunkt, the cooperation will be structured around PSM Projekt System & Management GmbH, a joint venture jointly owned by Rheinmetall and KNDS Deutschland. PSM was originally established to manage development, production, and lifecycle activities for the Puma infantry fighting vehicle and already possesses an operational framework suited to large Bundeswehr programs. Under the approved arrangement, this same structure is intended to be reused for a future tank contract covering both development and delivery. At the time of approval, the Bundeswehr had not yet placed an order, but the authority explicitly linked the cooperation to a specific forthcoming requirement. Using PSM avoids duplication of management and governance structures and allows responsibilities between the two partners to be coordinated through an entity already familiar to the German defense procurement system.

The tank project itself is described as an interim solution designed to bridge the capability gap between current Leopard variants and the arrival of the Main Ground Combat System (MGCS), which is currently expected around 2045. The Bundeswehr’s requirement emphasizes speed, with the goal of receiving initial vehicles within only a few years rather than waiting for the next-generation Franco-German system. The Federal Cartel Office noted that the customer has concrete expectations regarding weapons systems and overall configuration, and that fulfilling these expectations requires close cooperation between the two firms. In this framework, the interim tank is positioned as a complement to the Leopard 2A8 rather than a replacement for MGCS. The emphasis is therefore on rapid fielding, compatibility with existing German armored forces, and meeting defined operational requirements in the near to medium term.

According to Andreas Mundt, president of the Federal Cartel Office, the competition assessment concluded that neither Rheinmetall nor KNDS Deutschland would have been able to meet the project requirements independently. The authority stated that no significant restriction of competition is expected beyond the scope of the specific Bundeswehr project. This reasoning frames the cooperation as a practical response to a narrowly defined military need rather than a structural consolidation of the German land systems market. The approval therefore clears the way for a joint industrial approach if the Bundeswehr proceeds with the contract. It also reflects the regulator’s view that schedule pressure, system integration demands, and division of industrial competencies justify the cooperation under competition law.

The approval takes place against a complex industrial backdrop within KNDS, the Amsterdam-based group formed in 2015 through the combination of Krauss-Maffei Wegmann and Nexter. The German owner families, identified as Bode and Braunbehrens, are described as planning an exit, while the French state continues to hold the other 50 percent stake. Rheinmetall CEO Armin Papperger is associated with options to acquire a larger KNDS shareholding from the German side and has also expressed interest in taking over KNDS’s German activities. The German unit, formerly Krauss-Maffei Wegmann, is described as generating the majority of KNDS business, making ownership and control issues particularly sensitive. These dynamics intersect with the interim tank project by reinforcing Germany’s interest in securing influence over near-term armored vehicle production.

In parallel, KNDS is described as preparing for a stock market listing planned for 2026 under CEO Jean-Paul Alary and supervisory board chair Tom Enders, with Lazard involved as adviser and a valuation of around €20 billion referenced. This corporate trajectory runs alongside Germany’s immediate focus on strengthening its domestic tank production pipeline. The Leopard-2A8 remains the current reference platform for the Bundeswehr, and it was publicly presented in Munich in November 2025, underscoring KNDS Deutschland’s continued role in Leopard production and evolution. Within this context, the expanded cooperation with Rheinmetall is framed as reinforcing a Germany-centered approach to meeting Bundeswehr needs in the short term. The interim tank effort thus sits between ongoing Leopard upgrades and the distant MGCS timeline.

The broader discussion around the future tank also touches on Rheinmetall’s Panther concept and its main armament pathway. Beyond the primary gun, the vehicle concept includes a coaxial 12.7 mm machine gun, a remote weapon station, and a launcher for loitering munitions and guided missiles. For the main weapon, development is described as covering kinetic energy ammunition, programmable high-explosive rounds, and training ammunition, with a capacity of 20 rounds in an autoloader and 10 additional rounds stored as reserve inside the vehicle. Key new components are concentrated in the turret, raising the possibility of integrating a 130 mm system onto existing Leopard-2 hulls. The final caliber choice for MGCS is not considered fixed, as France is associated with a 140 mm gun track, and completion of gun and ammunition development remains a prerequisite, with earlier projections dating back to 2016 suggesting production readiness could be reached once these elements are finalized.

Written by Jérôme Brahy

Jérôme Brahy is a defense analyst and documentalist at Army Recognition. He specializes in naval modernization, aviation, drones, armored vehicles, and artillery, with a focus on strategic developments in the United States, China, Ukraine, Russia, Türkiye, and Belgium. His analyses go beyond the facts, providing context, identifying key actors, and explaining why defense news matters on a global scale.