Lockheed Martin Proposes Smaller, Cheaper PAC-3 Variant Limited to Lower-Tech Short-Range Missiles

Lockheed Martin unveiled plans on July 20 to develop the Adapted Capability Effector missile, a smaller and less expensive variant of the PAC-3 interceptor. The new missile would share the PAC-3 launcher and command-and-control software but incorporate a cheaper rocket motor, radar and electronic systems.

Tim Cahill, president of Lockheed Martin Missiles and Fire Control, described the ACE at the Farnborough International Airshow.

He said the missile lacks features needed to counter the most advanced threats and is not designed to engage drones. Cahill added that the ACE targets lower-tech short-range ballistic missiles of the type used by Iran and Russia. Production could begin in 2028 or earlier if governments commit funding and pursue joint work, Cahill said.

The company is pitching the missile to at least some of the 18 countries that already operate compatible PAC-3 launchers and envisions joint development with European partners. Demand for PAC-3 interceptors has risen sharply. By April 2026 the United States had expended roughly half its stock after President Trump launched a war on Iran in February.

Ukraine exhausted its PAC-3 supply in July 2026, after which Russia increased short-range ballistic attacks. Tom Karako, director of the Missile Defense Project at CSIS, said the United States and its allies need both maximum PAC-3 output and lower-cost alternatives. One missile-defense analyst noted that reducing costs in components such as the seeker could lower overall PAC-3 prices.