Lockheed Martin Unveils Low-Cost PAC-3 ACE Interceptor

During the Farnborough International Airshow on July 20, Lockheed Martin unveiled the PAC-3 Adapted Capability Effector (ACE), a lower-cost Patriot interceptor designed to counter drones, cruise missiles, and short-range ballistic missiles. The new missile is expected to cost less than half of the PAC-3 MSE variant, which is priced at approximately $4 million per unit. This development addresses the economic imbalance of using expensive interceptors against cheap munitions, such as Iranian Shahed drones, which depleted stocks during Operation Epic Fury.

Lockheed Martin partnered with GM Defense and German manufacturer Rheinmetall to accelerate production and shorten supply chains, with initial production projected within 36 months and deliveries likely beginning in mid-to-late 2029. The announcement comes as Ukraine faces critical shortages of PAC-3 interceptors, leaving it unable to counter Russian ballistic missile barrages in July 2026.

To further boost capacity, the company recently secured a $4.76 billion contract from the Pentagon to accelerate PAC-3 MSE production. While the U.S. government prioritizes reconstituting its own stockpiles for CENTCOM and Indo-Pacific deterrence, the PAC-3 ACE is intended to supplement, rather than replace, existing advanced air defense systems.