US Deployment of M1 Abrams Marks a New Milestone in Ukraine, Security Assistance to Surpass $27 Billion

President Biden has announced the US will provide the Ukrainian military with M1 Abrams tanks, a reversal of Washington’s long-standing hesitance to deploy American tanks against Russia. When combined with a January 19 arms package for Ukraine worth $2.5 billion, the $400 million price tag on the Abrams tanks has likely pushed US security assistance since February 2022 over the $27 billion mark.

Though a timetable for delivery is uncertain and may end up spread out over multiple years, these expensive and heavy-duty tanks, manufactured by General Dynamics, represent a new level of security assistance that the US is willing to dole out and could pave the way for even more advanced arms in the future. More imminently, it will also inspire several European nations to step up their own efforts to provide Ukraine with modern tanks.

Related ETF: SPDR S&P Aerospace & Defense ETF (XAR)

In a sudden and drastic shift in policy toward the war in Ukraine, President Biden announced yesterday that the United States would provide 31 M1A1 Abrams battle tanks to the Ukrainian military.

In calculating total US security assistance to Ukraine since the start of Russia’s invasion on February 24, 2022, the new orders for Abrams have likely pushed the US close to, or above, the $27 billion threshold. Last Thursday, the US unleashed another $2.5 of material support for Ukraine, including a thirtieth drawdown of equipment from Department of Defense inventories for the Ukrainian war effort, which included ammunition for National Advanced Surface-to-Air Missile Systems (NASAMS) and High Mobility Artillery Rocket Systems (HIMARS), as well as 59 Bradley Infantry Fighting Vehicles (IFVs) and 90 Stryker Armored Personnel Carriers (APCs).

MRP first referred to the possibility of Abrams tanks being sent to Ukraine while discussing General Dynamics’ Q3 earnings report all the way back in our October 31 Intelligence Briefing, Defense Sector Earnings, Developments in Ukraine Detail Significant Upside for Weapons and Equipment Sales. At the time, we noted that General Dynamics is the manufacturer of the US’s M1 Abrams tank, among the most critical pieces of weaponry in America’s armored arsenal and, although none had been promised to Ukraine yet, there was a “rising possibility” that they would be in the near future.

Coincidentally, General Dynamics reported earnings again yesterday, just hours before President Biden officially announced the provision of the battle tanks for Ukraine. GD reported that Abrams sales in its combat systems segment, which generated about $7.3 billion in sales in 2022, were mostly unchanged versus 2021 sales. However, with the newly-announced tanks for Ukraine racking up…