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Lockheed Martin has introduced a lower-cost interceptor for the Patriot air defense system, aiming to reduce the cost of countering increasingly common missile attacks while helping the United States and its allies address growing demand for air defense capabilities.

The new PAC-3 Adapted Capability Effector (ACE) interceptor, unveiled at the 2026 Farnborough International Airshow, is expected to cost less than half the price of the company’s current PAC-3 Missile Segment Enhancement (MSE) interceptor while remaining compatible with existing Patriot launchers and command systems.

The announcement comes as governments seek more affordable ways to defend against large-scale missile attacks following years of intensive combat in Ukraine and the Middle East, where expensive interceptor missiles have often been used against significantly cheaper aerial threats.

Designed to Lower Interception Costs

Lockheed Martin said the PAC-3 ACE is intended to fill the gap between low-cost drone interceptors and the high-end PAC-3 MSE missile, which remains the Patriot system’s primary interceptor for advanced threats.

According to the company, the new interceptor will cost less than half the approximately $4 million price of a PAC-3 MSE missile, offering militaries a more economical option for engaging a range of airborne threats.

Rather than replacing the PAC-3 MSE, the ACE is designed to complement existing Patriot capabilities by providing a lower-cost interceptor for missions that do not require the most advanced missile.

Compatible with Existing Patriot Systems

One of the key features of the PAC-3 ACE is its compatibility with the current Patriot architecture. The missile will operate using the existing Patriot fire-control system.

The PAC-3 ACE will integrate with both the Patriot weapon system and the Integrated Battle Command System (IBCS). By relying on proven infrastructure, Lockheed Martin expects to shorten development timelines while reducing integration costs.

According to the Lockheed Martin statement, the company intends to develop and manufacture the interceptor jointly with American and European industrial partners.

Focus on Cruise and Ballistic Missiles

Unlike systems designed primarily for counter-drone missions, the PAC-3 ACE is intended to engage what military planners describe as air-breathing threats, including aircraft and cruise missiles, as well as close- and short-range ballistic missiles.

Lockheed Martin President of Missiles and Fire Control Tim Cahill said the new interceptor is not intended to replace specialized counter-drone systems but rather to provide a more affordable option against higher-end airborne threats that do not require the capabilities of the PAC-3 MSE.

To reduce costs, the company simplified some of the missile’s most expensive components, including its solid rocket motor and seeker technologies, while maintaining compatibility with the Patriot system.

Production Targeted Within Three Years

Lockheed Martin said the PAC-3 ACE could reach initial production within 36 months, potentially allowing deliveries to begin in 2028 if development proceeds as planned.

The company emphasized that cooperation with European industry will play a significant role in production. Cahill said Lockheed is discussing plans with several European countries to manufacture the missile locally, with the long-term goal of creating a European-produced interceptor.

The approach aligns with broader efforts across Europe to strengthen domestic defense manufacturing while maintaining interoperability with NATO air defense systems.

Demand for Patriot systems and interceptor missiles has increased sharply since Russia’s full-scale invasion of Ukraine in 2022 and has remained high due to continuing instability across the Middle East.

Ukraine has relied heavily on Patriot batteries to defend major cities against Russian ballistic missile attacks. At the same time, President Volodymyr Zelenskyy has repeatedly appealed to partners for additional launchers and interceptor missiles as Russian strikes intensified.

Meanwhile, missile and drone exchanges involving Iran, Israel and U.S. forces in the Middle East have further strained inventories of advanced interceptor missiles.

During recent U.S. military operations in the region, Patriot batteries were extensively used to counter missile and aerial threats, highlighting concerns over the cost of employing multi-million-dollar interceptors against significantly cheaper weapons.

Defense analysts have increasingly warned that sustaining prolonged high-intensity operations will require larger production capacity and a broader mix of interceptor options that balance performance with affordability.

The Patriot system remains one of the cornerstones of U.S. and allied integrated air and missile defense. Using advanced radar, the system detects, tracks, and intercepts incoming threats with hit-to-kill technology, destroying targets by direct impact rather than with an explosive warhead.

The United States employs Patriot as part of a layered missile defense network alongside the Navy’s Aegis Combat System, equipped with SM-3 and SM-6 interceptors, and the Terminal High Altitude Area Defense (THAAD) system.

Earlier this year, Lockheed Martin announced efforts to integrate PAC-3 MSE interceptors with the Navy’s Aegis system for maritime operations.

The company also received a $4.7 billion Pentagon contract to accelerate production of PAC-3 MSE interceptors, reflecting continued demand for advanced missile defense capabilities.

With the introduction of the PAC-3 ACE, Lockheed Martin is seeking to expand the Patriot interceptor family by offering a lower-cost solution that could help allies replenish inventories more quickly while reducing the financial burden of defending against increasingly frequent missile attacks.