Israeli Defense Ministry to launch $1.5 billion armored vehicle initiative amid Gaza War

The Israeli Defense Ministry said on Wednesday that it plans to launch a $1.5 billion armored vehicle program to accelerate production of Merkava tanks and Namer and Eitan APCs, aiming to bolster IDF ground firepower during the war in Gaza. The initiative still requires approval from Defense Minister Israel Katz and Defense Ministry Director-General Maj.-Gen. (Res.) Amir Baram.

Baram explained the reason behind the large-scale armored vehicle expansion plan.

“During the war in Gaza, the IDF's advanced armored vehicle fleet proved its decisive importance for maneuvering. The achievements of the Merkava, Namer, and Eitan on the battlefield are on a global scale," he said. “Accelerating armored vehicle production is part of the Ministry's strategy to support the IDF's needs in the current conflict and to enhance readiness for an intense decade ahead. At the same time, we continue to constantly upgrade the vehicles' capabilities and develop the next generations of advanced armored vehicles for the IDF.”

Katz called the project a strategic move to ensure the IDF’s edge on the battlefield.

“The Swords of Iron War proved how critical Merkava tanks and Namer and Eitan APCs are for successful IDF ground operations. Today's approval of this over NIS 5 billion armored vehicle acceleration project is a strategic decision that maintains the IDF's qualitative military edge and our ability to prevail in any arena,” Katz assessed.

“This project strengthens both the IDF's capability and hundreds of defense companies nationwide, many in Israel's periphery – demonstrating how national security and economic growth go hand in hand. We won't compromise on Israel's security and will keep investing in our forces to protect the nation's future,” he added.

Since the Hamas-led Oct. 7, 2023, massacre and the ensuing war in Gaza, Israel has faced mounting international pressure for military and trade boycotts over its response.

The IDF signaled in January that it seeks to increase domestic military production to reduce the nation's reliance on foreign-produced military platforms, mainly the United States and Europe.

IDF Chief of Staff Eyal Zamir, who previously served as Defense Ministry director general, said a key lesson from the war was the need to expand domestic military production. At the time, Zamir visited a local military facility after signing two agreements with Israel's Elbit Systems.

The Ministry of Defense emphasized that such domestic initiatives are “crucial for enhancing the IDF’s operational endurance and force build-up capabilities,” adding that it will “strengthen domestic manufacturing independence and reduce reliance on imported raw materials.”