Last month, on my way home from Kyiv, I passed through Germany to visit one of the world’s largest weapons manufacturers. My hope was to see its response to the rise of drone warfare. The company, Rheinmetall, is best known for making artillery and tanks; the Ukrainians have fought the Russian army to a virtual standstill by learning how to destroy such old-school armaments with cheaply made drones. I thought I would find the leaders of Rheinmetall seized by the threat of this revolution in military technology. I found no such thing.When I brought up the drones that Ukraine has used so effectively against Russian tanks, the company’s chairman and CEO, Armin Papperger, was withering in his dismissal. “This is how to play with Legos,” he told me.He did not expect them to disrupt his industry. “What is the innovation of Ukraine?” Papperger asked. “They don’t have some technological breakthrough. They make innovations with their small drones, and they say, ‘Wow!’ And that’s great. Whatever. But this is not the technology of Lockheed Martin, General Dynamics, or Rheinmetall.”It is true: Ukraine’s drones are mostly assembled from imported parts, including rotors, motors, cameras, and computer chips. Most of these components come from China, where a single company produces more than 80 percent of the world’s small drones. But their cheapness—especially when compared with the elaborate weapons systems produced by companies such as Lockheed Martin and Rheinmetall—is precisely what makes them so devastating. For only a few hundred dollars, Ukraine’s drones can do serious damage to a military vehicle worth millions. They have, in effect, done to tanks and cannons what muskets once did to knights in shining armor. What Papperger called Legos have gone a long way to saving an entire country.I argued my point, but he seemed unimpressed. For a taste of real innovation, the CEO wanted me to visit his newest factory in northern Germany, and his staff arranged a tour for me the following day. About an hour into it, my guide and I turned a corner on the factory grounds and came across a handful of tanks that were backing up and jerking forward, like shoppers vying for a parking spot at Costco. The sight of them gave me the creeps, triggering a desire to turn around and walk briskly in the other direction. The machines themselves did not look all that scary. But in modern warfare, standing close to one can get you killed.That, at least, is the feeling toward tanks that I have developed after several years of reporting in Ukraine, where they are no longer seen as vehicles that keep you safe and kill your enemies. In that war zone, they are slow-moving prey for the drones that fill the sky. I would sooner pull the pin from a grenade than ride around near the front lines in a tank.When I explained this to my guide, Jan-Phillipp Weisswange, he seemed confused and a little defensive. The sale of armored vehicles makes up a significant part of the business at Rheinmetall. In Russia and Ukraine, soldiers have learned to protect their tanks from drone strikes using improvised nets and boxes, which cover the vehicles like a turtle shell. I asked whether Rheinmetall had developed something like that after four years of war in Ukraine. Weisswange glanced around at the machines on either side of us, all of them waiting for repairs, their tracks unchained and gun barrels angled upward. “No,” he said. “We don’t have something like that.”Well, why not?The reasons turned out to be complex. But they help explain why Germany, like Europe and the rest of NATO, is so ill-prepared for not only wars of the future but also the ones raging today. The U.S. war with Iran, now in its fourth week, has again demonstrated the power of cheap drones, which Tehran has produced and stockpiled in abundance.[Read: The U.S. and Iran are fighting a massively asymmetrical war]Thousands of Shahed drones have pummeled the Persian Gulf this month, hitting hotels, airports, seaports, desalination plants, and energy infrastructure, and deepening the worst oil-price shock in modern history. One Iranian drone slammed into a U.S. command center in Port Shuaiba, Kuwait, killing six American military personnel and gravely wounding at least 18 others. The United States and its allies have depleted their stocks of expensive air-defense missiles to try to shoot them down, forcing governments across the Middle East to rush-order cheaper alternatives, such as interceptors manufactured in Ukraine.The belated deployment of these Ukrainian drone-killers, announced earlier this month by President Volodymyr Zelensky, points to the deeper failure in the West to learn from Ukraine’s experience. Since the Russian invasion in 2022, the Ukrainians have sparked a revolution in military technology. “Their level of innovation is out of this world,” Lieutenant General Steven Whitney, a senior Pentagon official, testified this week before the Senate Armed Services Committee.A service member of Ukraine's 422nd Unmanned Systems Regiment walks next to a heavy strike drone at a training ground. (Reuters)Ukraine now makes more drones than any democracy in the world, and wealthy nations in Europe, Asia, and the Middle East are lining up to buy them. But when I asked the CEO of Rheinmetall what that could mean for his business model, he bristled. “Who is the biggest drone producer in Ukraine?” Papperger demanded. I listed the ones that I had visited in Kyiv two weeks earlier, Fire Point and Skyfall, which make hundreds of thousands of drones a month for the Ukrainian armed forces. “It’s Ukrainian housewives,” Papperger said of their factories. “They have 3-D printers in the kitchen, and they produce parts for drones,” he said. “This is not innovation.”As one of the biggest gunsmiths in the world, Papperger knows a lot about the state of the art in defense. His empire encompasses 180 factories (including eight in the United States) producing not only tanks and artillery but warships, missiles, high-end drones, anti-aircraft batteries, and fuselages for fighter jets such as the F-35. The company that he leads plays such an outsize role in the defense of NATO and Ukraine that the Russians put Papperger on a target list for assassination in 2024.He now goes around with the kind of security that’s usually reserved in Germany for the chancellor. “We have police everywhere,” he told me. “In my house, in front of the office.” When I arrived at the company headquarters, a police van stood next to the entrance, on Rheinmetall Square, and two heavily armed officers sipped coffee in the foyer, their presence indicating Papperger was in the building.I expected that he might be a bit hungover because the previous day had been Fat Tuesday, the climax of Germany’s carnival season. Millions of people had packed the streets of Cologne and Düsseldorf that week to drink beer and watch the floats pass by. (One of them depicted Vladimir Putin and Donald Trump devouring Europe.) Large corporations often sponsor these festivities, and their executives are expected to march in the parades. But Papperger stayed away, partly for reasons of security and partly because of the historical baggage he carries.During World War II, the company, then called Rheinmetall-Borsig AG, was controlled by the Nazi regime. Its factories, including those seized during the occupation of the Netherlands, France, and Poland, produced artillery and ammo for Hitler’s forces. The company also made extensive use of forced labor from concentration camps, particularly Buchenwald, according to an official company history published in 2014.For decades after the war, Germany’s attempts to atone for that history through a deep commitment to pacifism obliged defense companies to keep a low profile, avoiding sponsorships and splashy ad campaigns. “We tried to make ourselves look smaller than we are,” Philipp von Brandenstein, the head of corporate communications at Rheinmetall, told me. Institutional investors, such as German pension funds, saw the company as ethically tainted, and its stock price lagged far behind that of defense firms from other parts of Europe. Papperger, who became CEO in 2013, even considered ditching the weapons business and turning Rheinmetall into an auto-parts supplier.Then came the moment that Germans call the Zeitenwende—“the changing of the times.” At the end of February 2022, three days after Russia’s invasion of Ukraine, then-Chancellor Olaf Scholz announced a rearmament program worth 100 billion euros, the most ambitious attempt to revive the Germany military since World War II . The Defense Ministry called Papperger a few hours later, on a Sunday afternoon, and asked what the state could buy in a hurry. The list that he delivered the next day amounted to 42 billion euros’ worth of weapons, more than 10 times the market value of the entire company at the start of that year. The offer included more than 200 tanks, new and used, that Rheinmetall had in storage.When government officials went around to kick the tires, they found some problems. Ammunition for many of the weapons had not been produced in years, because the state had not placed any orders. “We didn’t ever take the military that seriously,” Steffen Hebestreit, then a senior aide to Scholz, told me at the time. “We had this defense budget where we would buy the weapon but save on ammunition. Or we would order 10 helicopters and no spare parts for them.” When one chopper broke down, another would be dismantled for parts to fix it.Rheinmetall was an obvious place for bureaucrats to direct the Zeitenwende funds. The company has all of the necessary permits, licenses, and security clearances needed to sell arms to the military, and it is one of the only companies in the world that is capable of manufacturing what the German military wanted. Having made about 70,000 artillery shells annually before the Russian invasion of Ukraine, the company increased production to 700,000 last year. NATO allies sent in purchase orders too. After two decades spent fighting insurgents and terrorist groups in Iraq, Afghanistan, and Syria, they found their arsenals ill-equipped for a land war in Europe. Tanks and armored vehicles began rolling off the line at a rate not seen in generations, and demand in Europe far outstripped the available supply.The gruesome images of tanks blown apart by drones in Ukraine did not dissuade anyone from purchasing these systems. Nearly all of the tanks that Russia had at the start of the invasion were destroyed by spring of last year, according to U.S. military estimates. “The scale of this conflict is just awe-inspiring,” General Christopher Cavoli, then the head of the U.S. European Command, testified last April before the Senate Armed Services Committee. “Thousands of tanks destroyed on both sides.”The Russians had lost an estimated 3,000 tanks in the previous year, along with 9,000 armored vehicles, 13,000 artillery systems, and more than 400 air-defense systems, Cavoli said in written testimony. The main weapon that the Ukrainians had used to inflict this damage was the suicide drone, which costs about $400 to make and explodes on impact. “I would say they’re the world leaders in one-attack drone technology,” Cavoli said.By the start of this year, the Ukrainians had created what they call a “kill zone” at the front—a no-man’s-land, 20 to 30 miles wide, where drones can spot and destroy just about anything that moves. In their ground assaults through that terrain, the Russians now prefer to advance on foot, sometimes using motorcycles, electric scooters, or even horses—all of which have a better chance than a tank of escaping the notice of a Ukrainian drone.[Read: The glaring oversight in the U.S. war plan]Still, purchases of new tanks and armored vehicles keep swelling the deal book at Rheinmetall, as well as the company’s stock price, which has risen more than 15-fold since the Russian invasion of Ukraine. Most of that growth came after Trump returned to the White House and began demanding that Europe spend more on defense. NATO members pledged at a summit in December to increase their defense budgets over the next decade to 5 percent of gross domestic product, more than double the previous spending commitment.To reach that goal, European politicians and military planners need to allocate billions of dollars in a hurry, which is easiest to do by ordering what are known as “exquisite” systems—state-of-the-art machinery such as ballistic missiles, warships, and fighter jets. Most drones are too cheap to move the needle toward NATO’s gargantuan spending targets.Among the few exceptions is the $20 billion contract that the Pentagon signed this month with Anduril, an American defense-technology company founded in 2017. That amount of money “could probably buy all the drones Ukraine produces,” Oleksandr Kamyshin, the official who oversees Ukraine’s weapons industry, told me. But as a general rule, Western militaries tend to give the biggest contracts to established manufacturers.With the start of the war in Iran, Rheinmetall told investors that it expects sales to grow this year by at least 40 percent. Its market value now stands at roughly $80 billion, far higher than Germany’s biggest carmakers, including Volkswagen and Mercedes-Benz. Last month, the company was already in talks to sell weapons worth 80 billion euros, adding to a backlog of orders that is expected to top 135 billion euros by the end of 2026. “This would be the highest order intake ever,” Papperger said. “But everybody knows that this is not enough. We need at the end of the day 400, 500, or more—600 billion!”And for what, exactly?“To achieve, first of all, that we have full equipment,” he said. “And that we are ready, that we are also ready to fight.”Rheinmetall CEO Armin Papperger (center) at the inauguration of a new artillery plant in Unterlüss, Germany. (Noah Wedel / IMAGO / Reuters)The next morning, Weisswange, who works in the company’s press office, picked me up from my hotel for the drive to its main production plant. It spans about 20 square miles in the farming town of Unterlüss, not far from Hanover. Part of the factory’s grounds have belonged to the company since its founding in the late 19th century, when it supplied the armies of Kaiser Wilhelm II, the last emperor of Prussia. In the surrounding forests of spruce and pine, Papperger likes to take investors hunting for wild game, and on the private firing range, the Leopard tank has been known to perform its famous parlor trick: driving around with a full stein of beer balanced on the barrel of its gun.The Leopard 2, a third-generation main battle tank, has been in service since 1979, and it represents the cutting edge of a technology invented during World War I. The first tank ever used in combat, in 1916, was the British Mark I, followed in the 1930s by the German Panzer. The basic concept has not changed all that much since then: an artillery piece that rides on metal caterpillar tracks and has massive slabs of armor to shield the soldiers inside. “For breaking through, you need these vehicles,” Papperger said. “And you need artillery to protect these vehicles.”In February 2024, Rheinmetall began to build a new artillery plant at Unterlüss. It finished the job in less than 14 months, remarkably fast for a country where it can take years to clear the regulatory hurdles for a new school or railway station, let alone a factory that handles high explosives. The main purpose of the facility will be to fill the largest single order in Rheinmetall’s history: a contract worth nearly $10 billion to supply artillery shells to the German armed forces.At the plant’s unveiling, in August, Papperger began by thanking the German finance minister, Lars Klingbeil, for “bringing all the money.” The secretary general of NATO, Mark Rutte, soon took the podium: “It’s really staggering that you were able to pull this off,” he said of the ammunition plant’s construction. “The tide is turning on defense production, and that’s because there is real firepower and innovation coming out of our industries.”The factory was far from finished when I arrived at the hangar where Rutte had given his speech. The place was mostly empty an hour before lunchtime, and the floor managers told me that installing the robots needed to automate production would take months. Meanwhile, a surprising amount of the labor was being done by hand. One worker used a large blowtorch to heat the rod used to bend artillery shells into shape. “That’s not how it’s supposed to look,” his boss told me. “It’s supposed to be automated.”In another part of the factory, a worker used a wooden stick, like a tongue compressor at a doctor’s office, to scrape excess bits of explosive out of the grooves inside each shell, ensuring that the base would screw on smoothly. The explosive mixture, resembling castor sugar, lay on the floor in paper sacks. One of my guides encouraged me to touch the stuff once it had been pressed into one of the shells. Then he laughed and said that I should be careful at the airport going home. The residue on my fingers might set off bomb detectors at security. “Just make sure to wash your hands with soap,” he told me.Although artillery shells cannot be described as weapons of the future, the war in Ukraine has shown the value of keeping them around. The opposing sides spent roughly the first two years of the war engaged in a lopsided artillery duel along the front, which stretched for more than 600 miles. Russia had enough cannons at the time to place one every few hundred paces, and the Ukrainians positioned one every few miles. Their stockpiles of Soviet-era ammunition soon began to run out. “There was a real shell hunger at the front,” Colonel Oleksiy Noskov, then an adviser to the General Staff of the Armed Forces of Ukraine, told me. “And it was killing us.”NATO countries soon began sending their own howitzers to fill the gaps in the Ukrainian arsenal, but they could not keep up with the rate of attrition. During the most intense barrages, the Russians fired tens of thousands of rounds a day, wearing down Ukraine’s defensive lines and clearing the way for Russian infantry.[Read: The Atlantic’s interview with Volodymyr Zelensky]Near the height of these assaults, in March 2023, Papperger traveled to Kyiv to see how he could help. He arrived in Zelensky’s compound to find the doors and windows barricaded with sandbags to guard against a Russian siege. Dressed in a blue hoodie, the German guest asked what he could do for the Ukrainians, and Zelensky urged him to build an ammunition plant in Ukraine to produce 1.5 million shells every year. “You got it. No problem,” Papperger recalls responding. There was just one issue, he added: “Do you have money?” Such a plant would cost billions of dollars. “I can build it,” Papperger told Zelensky. “But where is the business case?”About a year later, Rheinmetall announced a series of joint ventures with the Ukrainians, including factories to produce ammunition, gunpowder, and air-defense systems. But apart from one repair shop for armored vehicles in western Ukraine, none of these projects has materialized. Papperger blames the delays on Ukrainian bureaucracy. The Ukrainians saw it as another sign of Western weakness. According to NATO estimates, Russia could manufacture four times as many large-caliber rounds as the entire alliance put together, and its arms industry is on track to replace most of the tanks and armored vehicles it has lost in Ukraine. In the contest of industrial production, Ukraine was bound to lose.“We’ll never make as many shells or tanks as the Russians,” Kamyshin, the Ukrainian official who negotiated the deals with Rheinmetall, told me. “So we need to change the strategy. Produce less tanks. Produce more drones. It seems like an obvious decision.”Ukraine made the switch with remarkable speed. In 2023, it produced fewer than 150,000 drones. The next year, production topped 1 million, rising to 4 million last year. Output is expected to double again this year. Before this shift, artillery caused more than 80 percent of the casualties on both sides of the battlefield. Now drones account for an even larger proportion of the dead and wounded. Their range has surpassed that of most artillery pieces, and their targeting is far more precise than a standard shell’s. The Russian war machine has made the same transition, setting up enormous factories to mass produce a version of Iranian Shaheds, which batter Ukrainian cities by the hundreds almost every night. But Ukraine’s drones are keeping pace and, at least in terms of their lethality and versatility, outmatching the Russian ones.“No matter how advanced a tank is, Ukrainian-made drones will stop it,” Robert Brovdi, the commander of Ukraine’s drone forces, told attendees at a conference in July. He recalled how a group of NATO officers had invited him to their base last year and asked for his opinion about their readiness for a war like the one in Ukraine. “My answer did not really calm them down,” he told the audience. Four Ukrainian drone teams, he said, “would take 15 minutes to make another Pearl Harbor.”This sounded like braggadocio. But NATO military drills have substantiated the warning. During one set of exercises in May, a group of Ukrainian drone operators was invited to play the red team, pretending to be NATO’s adversaries. They launched 30 rapid strikes and took 17 armored vehicles out of the game within a few hours. “It was all destroyed,” one participant told The Wall Street Journal.The war games served as proof of Ukraine’s potential, not only as a fighting force but also as a supplier of weapons to the rest of Europe. Eric Schmidt, a former Google CEO, has invested in Ukrainian drone manufacturers and believes that the Ukrainians could one day overtake their Western peers in the arms market. “They will be the primary arms supplier to all of Europe,” Schmidt told the audience at a security conference in Germany last month. Ukrainian drones, he said, “are so inexpensive; they are so battle-tested.”Papperger, of course, sees it differently. The rise of cheap drones poses a direct threat to his business model. To continue winning multibillion-dollar contracts for tanks and artillery, he needs to convince his clients that these weapons will remain essential to wars of the future. Ukraine has made that a much greater challenge.When I asked him whether Ukrainian companies would one day sell their drones to NATO, he sighed and shook his head. They would not make it through the alliance’s bureaucracy, he said: “They need a NATO qualification.” Western regulators could, in other words, keep them off the European market by requiring licenses that Ukrainian firms might find hard to get.Even adopting Ukrainian know-how seems difficult in that environment. During our tour of the factory in Unterlüss, my guide explained the complexity of changing anything about the design of a German weapons system. “Any adjustment needs to be recertified by the procurement agency,” a department within the Ministry of Defense, Weisswange said. Any change to the material used to make the barrel of a tank, he said, would take at least a year to certify. “The quality controls are very strict, and the costs are very high.”In the end, Rheinmetall has a strong incentive to continue making the expensive weapons it has made for much of its history, even if they can be blown apart by drones that cost less than the average smartphone.