Elbit Systems

Defense · UAV/Drones · Israel-Serbia Relations

Expansion

Elbit Systems to open Serbia UAV factory under $1.63B defense deal

The plant gives Israel a manufacturing hedge in Europe as wartime demand strains its own production lines.

• Elbit Systems and Serbia's state defense company are launching a joint UAV factory expected to open between September 15-20, 2026, under a five-year $1.63 billion contract to supply Serbia's military.
• Elbit Systems is Israel's largest private defense contractor, based in Haifa, with annual revenue of nearly $7 billion and a portfolio spanning drones, autonomous systems and precision munitions.
• Elbit will hold a 51% stake in the new venture with Serbia's state arms company SDPR holding 49%; the broader contract covers long-range rocket artillery, ISTAR systems, night-vision gear and battlefield digitization.
• The $1.63 billion deal ranks among the largest Israeli defense contracts on record, trailing only IAI's $3.5 billion Arrow 3 sale to Germany and its $1.6 billion Barak 8 sale to India.
• NATO temporarily suspended purchases of Elbit technology last year amid a corruption probe, even as Serbia's own arms exports to Israel have jumped nearly 40-fold in two years, from about $3M to $122M.
• The venture signals Israel's broader strategy of diversifying weapons production abroad as wartime demand strains its domestic defense supply chains.