In light of the growing strategic importance of military drone technology, established industrial giants Rheinmetall, Mercedes-Benz, and Heidelberger Druckmaschinen are forging alliances with emerging drone specialists. At the ILA Berlin Air Show on Wednesday, defense contractor Rheinmetall announced a partnership with Munich-based startup ERC System, which has previously focused on developing electric aircraft for civilian use. Mercedes-Benz and Munich-based drone specialist Tytan also signed a memorandum of understanding (MoU) at the event. Meanwhile, printing press manufacturer Heidelberg announced a cooperation agreement with a Ukrainian firm regarding defense technology, scheduled for Thursday.

Germany's largest defense contractor, Rheinmetall, has already secured several partnerships and now aims to produce an electric cargo drone with ERC capable of carrying payloads up to 250 kilograms. The companies and the state of North Rhine-Westphalia (NRW) announced during the signing of the MoU that the production facility in NRW is expected to create a three-digit number of jobs by 2029. Rheinmetall CEO Armin Papperger stated that this project lays the 'foundation for the industrialization of a pioneering unmanned aerial system in Germany.' Deputy Minister-President and State Minister for Economic Affairs Mona Neubaur (Greens) described it as a 'decisive contribution to the country's resilience.'

ERC develops electric vertical take-off and landing (eVTOL) aircraft that operate like helicopters but fly forward like conventional planes. In February, the subsidiary of the Bavarian technology group and defense service provider IABG successfully flight-tested a 2.7-ton electric aircraft with a 16-meter wingspan. Designed to carry several passengers, it is slated for use by the DRF air rescue service starting in 2031. A smaller, unmanned version named 'Victor' is expected to be ready for series production as early as 2028 in collaboration with Rheinmetall. ERC co-CEO Maximilian Oligschläger told Reuters that this would close a military capability gap, noting that while many drones exist for payloads up to 20 kilograms and traditional helicopters handle cargo over 500 kilograms, there are currently no unmanned VTOL systems for medium payloads.

DRONE DEFENSE ON THE G-CLASS

Tytan's drone defense system could soon be integrated into Mercedes-Benz vehicles, specifically the G-Class off-roader and the Sprinter van, both of which are widely used by the Bundeswehr. 'The threat level is real; every day we witness overflights of critical German and European infrastructure,' explained Tytan CEO Balazs Nagy. The 'Drone Defender' platform will be developed by leveraging the automaker's industrial expertise. Insiders told the 'Financial Times' that Tytan aims to commence production of the 'Defender' by the end of the year.

Meanwhile, Heidelberger Druck is expanding its drone business as part of a strategy to diversify away from its low-growth core business. The Wiesloch-based company stated that defense technology will become a further pillar alongside its electric vehicle charging infrastructure segment. Onberg, a joint venture established by Heideldruck and the US-Israeli technology firm Ondas, will distribute drone defense systems and later begin series production in Brandenburg. At ILA Berlin, Onberg is expected to announce an MoU regarding a potential collaboration with a Ukrainian company on a drone defense project. CEO Jürgen Otto noted that the machinery manufacturer, which generates over two billion euros in revenue, anticipates the defense business could yield 300 million euros in annual revenue in the coming years.

Technology group Bosch also intends to supply defense technology, though it will not provide weapons or ammunition. 'This is a duty we must fulfill,' Bosch CEO Stefan Hartung told Reuters. However, he views the revenue potential as limited: 'I do not currently see this providing a massive safeguard for our value creation.'

(Reporting by Jörn Poltz, Ilona Wissenbach, Maria Rügamer, Rachel More and Anneli Palmen; Edited by Ralf Banser. For inquiries, please contact our editorial team at berlin.newsroom@thomsonreuters.com (for politics and economics) or frankfurt.newsroom@thomsonreuters.com (for companies and markets).)