U.S. Aims for 25,000 APKWS Laser-Guided Rocket Kits a Year to Expand Counter-Drone Firepower.

The United States is moving to expand production of APKWS precision-guided rockets to strengthen its ability to intercept hostile drones without relying on more expensive air defense missiles. A new agreement between the Pentagon and BAE Systems aims to increase annual interceptor output while expanding ammunition stocks for American forces and allied militaries facing growing unmanned aerial threats.

During Exercise Sky Shield in Kuwait in December 2025, a U.S. Army Electronic Advanced Ground Launcher System (EAGLS) fired an APKWS 70 mm laser-guided rocket, demonstrating its counter-drone interception capability. (Picture source: U.S. Army)

The agreement establishes a long-term industrial framework intended to sustain production beyond previous procurement contracts. Rather than immediately ordering a fixed quantity of munitions, the Pentagon aims to provide manufacturers with predictable demand, allowing them to expand manufacturing capacity, secure essential components, and address military requirements over an extended period.

On October 19, 2026, the Department of War officially announced the agreement, whose implementation remains subject to congressional authorization and appropriations. The arrangement was finalized in coordination with the U.S. Army, Navy, Air Force and Marine Corps, all four services already employing weapons equipped with APKWS guidance systems. BAE Systems plans to increase production while negotiations continue on a multiyear contract, although neither party has disclosed its financial value.

Beyond the initial requirement of 25,000 guidance kits annually, the agreement provides a pathway to increase yearly production to 35,000 units to accommodate international orders. According to the Department of War, this expansion will depend on allied governments submitting formal Letters of Request through the Foreign Military Sales (FMS) program. Foreign procurement would therefore contribute directly to the development of American manufacturing infrastructure while maintaining additional production capacity for U.S. military requirements.

The industrial dimension is central to this decision. By providing visibility on procurement over several years, the Pentagon intends to enable BAE Systems to anticipate purchases of components with long lead times, expand its skilled workforce, and maintain higher manufacturing rates. Each additional production line would also increase the country's ability to raise output in response to sudden changes in military requirements. Michael P. Duffey, Under Secretary of War for Acquisition and Sustainment, emphasized that predictable procurement would help sustain industrial activity while providing American forces with larger interceptor inventories.

Developed by BAE Systems, APKWS converts conventional 2.75-inch (70 mm) Hydra rockets into precision-guided munitions by incorporating a laser guidance section between the rocket motor and warhead. The system uses distributed aperture semi-active laser guidance, with sensors integrated into four deployable wings. These detect laser energy reflected from a designated target, allowing the rocket to correct its trajectory during flight without requiring the development of an entirely new missile.

The system typically combines an Mk66 rocket motor with different compatible explosive warheads, while counter-drone configurations can incorporate proximity fuzes to engage aerial targets without requiring direct impact. Its relatively compact dimensions allow aircraft to carry multiple rockets or enable integration with suitable ground-based launchers. Its guidance architecture also supports engagements against different target categories, including vehicles, small unmanned aircraft, and other targets requiring precision strikes.

The operational value of APKWS lies partly in providing American forces with an alternative to more expensive air-to-air and surface-to-air missiles when intercepting relatively inexpensive drones. The munition can be employed in air-to-air, surface-to-air, air-to-ground, and surface-to-surface missions, extending its potential applications across different military formations. Aircraft such as the F-16 Fighting Falcon and AH-1Z Viper can employ these guided rockets, while ground-based configurations provide additional options for protecting military installations and deployed units. Nevertheless, interception effectiveness continues to depend on target detection, tracking and laser designation, requiring integration with existing sensors and fire-control systems.

BAE Systems currently manufactures APKWS guidance kits at its facilities in Hudson, New Hampshire, and Austin, Texas. The company delivered its 100,000th kit in February 2026 and continues to invest in manufacturing equipment, supply chains and workforce development. The new agreement builds on existing contracts, including a five-year U.S. Navy contract valued at up to $1.74 billion, while establishing a longer-term framework for future procurement requirements.

The agreement also forms part of a broader American effort to accelerate missile and interceptor manufacturing. Similar arrangements involving PAC-3 MSE missiles and components for the Terminal High Altitude Area Defense (THAAD) system reflect growing attention to ammunition availability and the industrial requirements of prolonged military operations. For the Pentagon, increasing production across different interceptor categories is becoming necessary to address threats ranging from small drones to ballistic missiles.

Internationally, the agreement could improve allied access to precision-guided munitions as NATO members and several Middle Eastern partners reassess their air defense inventories. Saudi Arabia has received U.S. approval for a potential acquisition involving 20,000 APKWS guidance kits, while Italy is examining the system for counter-drone missions. By linking foreign procurement to the development of additional domestic production capacity, Washington aims to expand its defense industrial base while supporting allied rearmament. This approach also reflects a broader strategic consideration: effective air defense depends not only on the technical performance of individual systems but also on the ability to manufacture affordable interceptors in sufficient quantities to sustain prolonged engagements against large numbers of aerial threats.

Written By Erwan Halna du Fretay - Defense Analyst, Army Recognition Group
Erwan Halna du Fretay holds a Master’s degree in International Relations and has experience studying conflicts and global arms transfers. His research interests include security and strategic studies, particularly the dynamics of the defense industry, the evolution of military technologies, and the strategic transformation of armed forces.

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