Key facts
- The U.S. Army is purchasing low-cost interceptor drones to counter Iran's extensive drone attacks during the ongoing conflict.
- Expensive Patriot PAC-3 interceptors are being used against significantly cheaper Iranian drones, creating an unsustainable cost dynamic.
- Perennial Autonomy's Merops drone, costing $15,000, is being acquired by the Army, having previously intercepted thousands of drones in Ukraine.
- The Army's Low-Cost Interceptor program aims to create a scalable, government-owned supply chain for interceptors, decomposing it into competed subsegments.
- X-Bow Systems has introduced its Buckler interceptor, priced under $100,000, designed for drone threats and other aerial targets.
The U.S. Army is facing a critical challenge in the ongoing Iran war due to the high cost of intercepting Iranian drone swarms. The conflict, which began on February 28, 2026, has seen Iran deploy nearly 2,000 drones, forcing the Army to expend expensive Patriot PAC-3 interceptors, priced at approximately $5.3 million each, against drones costing as little as $30,000 to $50,000.
This cost disparity presents an unsustainable financial burden on defense budgets. In response to the immediate threat, the Army purchased 13,000 Merops low-cost interceptor drones from Perennial Autonomy, a startup founded by former Google CEO Eric Schmidt, at roughly $15,000 per unit. The Merops drone is a three-foot fixed-wing unmanned aerial vehicle equipped with a fragmentation warhead and guided by various sensors.
To address the structural issue of procuring interceptors at scale, the Army has launched the Low-Cost Interceptor (LCI) program. This initiative deviates from traditional defense acquisition models by decomposing the supply chain into separately competed subsegments, including solid rocket motors, seekers, and guidance systems. The Army will own the intellectual property for each component, enabling greater flexibility and competition. The goal is to produce a complete interceptor for under $1 million, with a preference for component costs below $250,000.
Meanwhile, New Mexico-based X-Bow Systems has introduced its Buckler interceptor, designed to engage Group 3 drones at supersonic speeds for under $100,000. X-Bow is vertically integrating its manufacturing process for solid rocket motors and airframes to address industrial-base bottlenecks. Lockheed Martin has also partnered with X-Bow as an independent supplier for its programs. The demand for such low-cost interceptors is high, with the U.S. having depleted significant numbers of Patriot and THAAD interceptors, and the Air Force actively soliciting proposals for similar systems.