Rheinmetall to invest €270 million and build Europe's largest tank factory

German defense company Rheinmetall plans to invest around €270 million in expanding armored vehicle production in Kassel, building a new logistics center, and creating a drone testing site. CEO Armin Papperger said that after the expansion, Kassel will become Europe's largest tank production center.

The company presented its plans on August 27 together with the authorities of the state of Hesse. Rheinmetall and the regional government signed a memorandum on creating the Defence Hub Nordhessen, a major defense industrial center in North Hesse.

“Kassel will become the largest tank factory in Europe,” — said Papperger.

According to him, the workforce is planned to increase from the current 2,200 to 3,500 people.

Rheinmetall to expand armored vehicle production

Kassel is already one of Rheinmetall’s key sites for military vehicle production. Here, the eight-wheeled Boxer armored vehicle is manufactured for the armed forces of Germany and other countries.

As part of the new investment project, the company intends to further increase production capacity at the site. At the same time, a new logistics and technology center will be built near Kassel-Calden airport.

Its area will exceed 30,000 square meters. Rheinmetall expects the facility to be operational by the end of 2027. The center should accelerate the fulfillment of German and international orders, shorten processing times, and expand logistics capabilities.

In addition, Rheinmetall plans to set up a drone testing center in Calden. Thus, the new defense cluster will combine armored vehicle production, logistics, and the development and testing of new military technologies.

The authorities of Hesse also intend to participate in the project. Minister-President Boris Rhein announced that the state will provide around €25 million. The government expects to turn North Hesse into one of Germany's main defense industry centers.

Rheinmetall's armored vehicle orders surge

The factory expansion comes amid a rapid increase in Rheinmetall's defense orders. In the first half of 2026, sales of the Vehicle Systems division, which produces wheeled and tracked military vehicles, rose by 28% compared to the same period last year to €2.43 billion.

The division's order backlog reached €28.83 billion at the end of June, up 41% year-on-year. Among the largest new contracts were an order for another 200 Puma infantry fighting vehicles for Germany and a contract for 298 Lynx vehicles for Romania, financed under the European SAFE instrument.

In recent years, Rheinmetall has been steadily increasing production capacity in Europe amid rising defense spending by NATO countries and a sharp surge in demand for weapons and ammunition following Russia's full-scale invasion of Ukraine.

Based on materials from: Rheinmetall, Hesse state government, Reuters