Czech Republic: Industrial Base and F-35 Transition

Strategic Position: The Central European Hinge¶

The Czech Republic occupies the geographic centre of Central Europe, surrounded entirely by NATO allies — Germany to the northwest, Austria to the south, Slovakia to the east, and Poland to the north. Its lack of a direct threat border with Russia or Belarus creates a different strategic logic than the Baltic states or poland: Prague faces no immediate territorial threat and requires no tripwire deterrence. Instead, the Czech strategic role centres on industrial capacity, logistics infrastructure, and the ability to sustain allied forces operating to the east.

This geography explains both the Czech Republic’s historically modest defence spending — it breached 2% of GDP only under post-2022 pressure — and the nature of its most significant contributions to NATO: not forward mass, but manufacturing, maintenance, repair, and overhaul (MRO) capacity for equipment fielded across the alliance. The Czech domestic defence industry is among the most developed in Central Europe, with competencies in armoured vehicles, artillery, firearms, ammunition, and military electronics that give Prague leverage in alliance industrial discussions disproportionate to its force size.

Domestic Defence Industry¶

Excalibur Army and Armoured Vehicles¶

Excalibur Army, based in Šternberk, is the Czech Republic’s primary armoured vehicle manufacturer and refurbisher. The company has emerged as a major supplier to Ukraine, providing refurbished T-72 tanks, BVP-1 (BMP-1) infantry fighting vehicles, and other Soviet-pattern equipment drawn from Czech Army stocks and third-party sources. Through 2024, Excalibur Army facilitated the transfer of approximately 90 T-72 tanks and 200+ armoured vehicles to Ukraine — one of the largest single-nation equipment contributions in the conflict.

Domestically, Excalibur Army is upgrading the Czech Army’s T-72M4 CZ fleet and has produced the modernised Pandur II 8×8 wheeled APC for the Czech and Latvian armies. The company’s ability to rapidly source, refurbish, and deliver Soviet-pattern equipment to Ukraine demonstrated an industrial agility that many Western manufacturers lacked.

ZTS and the DANA Howitzer¶

The Czech Republic’s most internationally recognised artillery system is the ShKH vz. 77 DANA — a wheeled 152mm self-propelled howitzer developed in the 1970s and exported to multiple Warsaw Pact and post-Cold War clients. DANA derivatives remain in production at the Konstrukta-Defence / Excalibur joint enterprise in an updated 155mm NATO-calibre configuration (DANA-M2). The wheeled howitzer concept — offering strategic mobility and reduced logistics burden compared to tracked equivalents — has attracted renewed interest post-Ukraine, where Czech DANA systems have performed effectively in Ukrainian service.

CZ Firearms¶

Česká zbrojovka (CZ), headquartered in Uherský Brod, is one of Europe’s largest small arms manufacturers. The company produces the CZ 75 pistol series, the Bren 2 assault rifle (adopted by Czech and several allied armies), and military shotguns. CZ’s 2021 acquisition of Colt Industries of the United States gave the company a North American manufacturing footprint and access to US military small arms contracts. CZ exports to over 90 countries, generating approximately €500 million in annual revenue and making Czech firearms one of the country’s most commercially successful defence exports.

Ammunition Surge¶

The Czech Republic has become a primary organiser of third-country ammunition procurement for Ukraine. The Czech-led initiative, announced in early 2024, coordinated the purchase of approximately 800,000 155mm artillery shells from non-EU third countries — addressing the critical ammunition shortage in Ukrainian artillery units. The programme, partially funded by contributions from allied nations, demonstrated Czech willingness to exercise industrial and diplomatic leverage in support of alliance policy even where direct bilateral military aid has been constrained by inventory limitations.

Czech domestic ammunition production capacity is also being expanded. The October Defence and Industry Forum (ODIF) procurement initiative targeted additional 155mm production lines with a 2025–2027 delivery profile, with Czechoslovak Group (CSG) — the conglomerate that owns multiple Czech defence companies — as the primary industrial vehicle.

Combat Aircraft: F-35A Transition¶

The JAS-39 Gripen Lease¶

Since 2005, the Czech Air Force has operated JAS-39 Gripen C/D fighters under a leasing arrangement with the Swedish government — 14 aircraft initially, later renegotiated. The Gripen lease was always understood as a transitional arrangement pending a permanent procurement decision, but successive Czech governments deferred the choice amid budget constraints and defence industrial lobbying for different solutions.

The Gripen is a capable fourth-generation fighter with excellent agility, advanced avionics, and SAAB’s sophisticated EW suite. However, it lacks the low-observable characteristics and sensor fusion of fifth-generation platforms, and in the post-2022 strategic environment, Czech Air Force planners — and political leadership — concluded that a transition to fifth-generation capability was necessary.

F-35A Contract¶

The Czech government announced its decision to procure 24 F-35A aircraft in July 2023, in a letter of request to the US government valued at approximately $5.6 billion including aircraft, engines, associated equipment, training, and logistical support. The contract makes the Czech Republic the seventh European nation to commit to the F-35, joining poland, finland, netherlands, Belgium, Denmark, and Norway.

Delivery of the first Czech F-35As is projected for 2031, with the fleet reaching full operational capability by 2035. The aircraft will be based at Čáslav Air Base in Bohemia — the Czech Air Force’s primary tactical aviation installation — which requires significant infrastructure investment: new climate-controlled hangars, secure maintenance facilities, and ALIS/ODIN maintenance data system integration.

Ground Forces and Armour¶

T-72M4 CZ Fleet¶

The Czech Army operates approximately 93 T-72M4 CZ tanks — a substantially upgraded version of the Soviet T-72 with a new 1,000-horsepower diesel engine, modern fire control system, thermal imager, and improved crew protection. The T-72M4 CZ represents one of the more capable T-72 derivatives in European service and has been modernised through a domestic programme that built Czech Army armour MRO expertise. However, the fleet’s size makes it inadequate for a war-fighting division — a structural deficit that the Army acknowledges.

CV90 and IFV Modernisation¶

The Czech Army operates BMP-2 infantry fighting vehicles as its primary mechanised infantry platform. With the BMP-2 fleet aging and the threat environment demanding higher-protection IFVs, the Czech Republic initiated a new IFV competition in 2022. The CV90 and the Lynx KF41 are the primary candidates, with a contract expected to cover approximately 210 vehicles in an initial tranche. The procurement, valued at approximately €2.5 billion, is the largest Czech ground equipment acquisition in a generation.

Visegrad Four and Regional Defence Cooperation¶

The Czech Republic is a member of the Visegrad Four (V4) — the political and cultural grouping of Czech Republic, Slovakia, Hungary, and poland — which has served as a vehicle for defence industrial cooperation and political coordination on NATO policy. V4 defence cooperation includes joint exercises, shared logistics infrastructure, and periodic discussion of combined procurement. However, the V4’s political coherence has been strained by Hungary’s divergent posture toward Russia post-2022 and Slovak domestic politics that have complicated pro-Ukraine positions.

More durable is Czech-Polish bilateral defence cooperation, which has deepened significantly since 2022. Poland’s procurement of Czech DANA howitzers and Czechoslovak Group ammunition, combined with Czech Army training at Polish facilities, reflects the practical logic of industrial complementarity between Europe’s most active defence spender (poland) and Europe’s most productive mid-tier defence manufacturer.

Budget and Investment Trajectory¶

Czech defence spending reached 2.0% of GDP in 2024 — the NATO target — following years below threshold. The 2024–2028 defence investment plan commits to maintaining 2% as a floor, with the F-35 programme requiring consistent annual appropriations. The Czech defence budget in 2025 was approximately CZK 151 billion (~€6.3 billion), with the largest single line item being the F-35 programme management costs and initial advance payments.

Assessment¶

The Czech Republic’s defence significance lies at the intersection of industrial capacity and geographic position. As a NATO logistics corridor and the alliance’s primary source of Soviet-pattern equipment for Ukrainian rearmament, Prague exercises influence disproportionate to its 25,000-strong active military. The F-35 procurement represents the clearest signal of strategic intent: a willingness to invest in high-end combat capability rather than rely on industrial leverage alone. The outstanding questions are whether Czech ground forces — underarmed in armour and mechanised infantry — can be brought to credible warfighting standard within the 2025–2030 investment cycle, and whether the V4 framework retains enough coherence to coordinate regional defence planning given Hungary’s persistent misalignment with NATO consensus on Russia.