Sheet XIII · Appendix
The Economics Unit cost · supply chain · production
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Sheet XIII · Appendix · the unit economics
XIII

The
economics.

A war fought with line items.

The drone war is the first conflict whose balance sheet can fit on a single sheet of paper — and is, more often than not, the decisive document.

I. Cost asymmetry

A four-hundred-dollar quadcopter destroys a four-million-dollar tank. Even drawn at scale on a single page, the gap is hard to render — a hairline against a heavy rule, and the heavy rule still understates it. For Ukraine the realised exchange ratio sits between one to ten thousand and one to fifteen thousand. For United States and Gulf interceptions of Iranian Shaheds the math runs the other way: every dollar Tehran spends on a one-way attack drone costs the defender between twenty and twenty-eight dollars to defeat.

The Stimson Center's Kelly Grieco has written the cleanest summary: "every $1 Iran spends on a Shahed costs the UAE roughly $20–$28 to intercept." The June 2025 Iran-Israel exchange consumed about a hundred and fifty THAAD interceptors and eighty SM-3s, costing the United States and partners an estimated five to ten billion dollars to defeat roughly one thousand drones and five hundred and fifty ballistic missiles. The math, sustained, is ruinous.

Fig. XIII.a — Cost asymmetry · drawn at logarithmic scale

The blue dot is the attacker; the copper dot is the typical Russian armoured target. The arc connecting them is the exchange ratio. Even at logarithmic scale the gap is visible.

II. Unit cost · the table

What follows is the article's cost table, redrawn as a hairline ledger. The blue rows are the systems the war turns on; the heaviest cost shocks are the bottom three rows — the interceptors that defend against the cheapest entries above.

SystemCost · USDRole
UA / RU FPV$300 — 1,000Tactical strike
Fibre-optic FPV$500 — 2,000EW-resistant strike
Sting interceptor~$2,100Anti-Shahed
Switchblade 300$6 — 10,000Loitering munition
Merops interceptor (US)$10 — 15,000Anti-Shahed
UA logistics UGV$15 — 20,000Frontline supply
Shahed-136 / Geran-2$20 — 50,000Long-range OWA
Lancet~$35,000Tactical hunter-killer
Switchblade 600$70 — 90,000Anti-armour loiter
Israeli Harop$150,000+Loitering munition
Magura V5 USV$250 — 300,000Naval strike
Bayraktar TB2~$5 MMALE strike (legacy)
MQ-9 Reaper~$30 MMALE strike
Patriot PAC-3 MSE~$4 MSAM · defensive
THAAD interceptor$12 — 15 MHigh-altitude SAM

Blue rows mark the systems that have, in this volume, materially shifted the war. The lower the row, the worse the news for whoever is doing the defending.

III. Production · annual output, 2025

Three bars. Two are roughly equal. The third is the one the West will spend the rest of the decade trying to grow.

Fig. XIII.b — Production · annual, 2025

Ukraine and Russia produce roughly four million drones a year, each. The United States produced six hundred and twenty Patriot PAC-3 interceptors in 2025 — its largest defensive missile production line. The right bar is drawn at the same scale as the other two.

IV. The supply chain

The single most underappreciated story for a technically literate reader. The Russian and Ukrainian drone industries are both critically dependent on commodity Chinese components — motors, batteries, cameras, radio modules, fibre-optic cable spools. Russian drones additionally contain large numbers of Western semiconductors. The Iranian Shahed-136, by one analysis, is ninety per cent Western chips by component count.

If Beijing chose to embargo drone components to one or both sides, the answer to the question that follows is not reassuring for Western defence planners.

Fig. XIII.c — Component supply chain · schematic, 2026

The blue lines are the commodity channel both sides depend on. The grey hairlines are Western chips finding their way into Russian airframes despite sanctions. If Beijing closed either route, both Ukraine and Russia would feel it within a quarter.