Estonia’s Decision to Exit the CV90 Joint Procurement Has a Minimal Impact on European Order

A recent development in the joint procurement of CV90 infantry fighting vehicles among five European nations has sparked concerns about the potential impact of Estonia’s decision to withdraw from the program. However, according to Tommy Gustafsson-Rask, general manager of BAE Systems Hägglunds, the departure of the Baltic state will have only a marginal effect on the production plans.

Gustafsson-Rask visited the company’s facility in Ornskoldsvik, Sweden, where he discussed the implications of Estonia’s exit and the overall progress of the CV90 program. The CEO emphasized that the other four countries involved in the joint procurement – Finland, Norway, Lithuania, and the Netherlands – will still receive vehicles earlier than expected.

Estonia had initially signed a statement of intent to jointly procure CV90 armored infantry fighting vehicles with its partners last year, which was formalized at the NATO defense ministers’ meeting in Brussels. However, following a tense negotiation process, Estonia decided to prioritize air defense systems over acquiring additional CV90s. The country plans to retain and upgrade its existing fleet of around 50 vehicles.

While the news may have come as a surprise to some, Gustafsson-Rask downplayed the significance of Estonia’s decision. He pointed out that the Baltic state had always had lower quantities in the program compared to other countries, making its withdrawal less impactful than expected.

“The effect is marginal,” Gustafsson-Rask said. “I think the other customers will get vehicles earlier, so they’re happy. I think it’s in the margin, it’s not such a big effect.” The company expects the joint procurement to cover at least 500 more vehicles, with BAE Systems currently having an order book of around 600 CV90s.

Production capacity is indeed a concern for the CV90 program, particularly given Estonia’s decision. However, Gustafsson-Rask emphasized that BAE Systems is investing heavily in expanding its facility in Ornskoldsvik. Since 2020, the company has invested approximately $300 million in the location, with the workforce increasing from 750 to 2,600 today.

Another influx of capital is planned, with a $150 million investment between 2026 and 2028. The focus of this new money will be on further increasing welding capacity for the CV90 hulls and optimizing the production line for other platforms at the Örnsköldsvik site. Additionally, BAE Hägglunds plans to build a new logistics center, which will free up manufacturing capacity in existing workshops.

“We’re gonna deliver a CV90 per day [after the investments],” Gustafsson-Rask said. “That’s roughly where we’re gonna be.” He added that the company aims to complete deliveries for the current order book until 2032-ish.

To help meet demand, BAE Hägglunds is operating an extended industrial cooperation model with eleven production sites in Europe tied into the CV90 program. Many of these are long-standing partner facilities, but two recent customers, the Czech Republic and Slovakia, will assemble chassis and turrets locally, while also carrying out system integration and testing based on welded hulls supplied from Sweden.

While local assembly is a crucial component of the program, Gustafsson-Rask stressed that the core welding and structural work in Örnsköldsvik remains central to the CV90 effort. However, the company acknowledges that the supply chain poses a significant challenge, particularly with regards to finding second and third sources to keep pace with demand.

In recent years, BAE Systems has gained valuable experience from its involvement in the “drone war” in Ukraine, where 50 CV90s donated by Sweden have been deployed in combat. The company emphasizes that the vehicle has demonstrated strong protection, firepower, and mobility, although no soldiers have been killed inside a CV90 in Ukraine so far.

“We also learned that the earlier generation of CV90 was not protected for drones,” Gustafsson-Rask acknowledged. “The drone war that everybody learns the hard way in Ukraine.” The experience has prompted upgrades to better protect newer vehicles against unmanned aerial threats, and reinforced the importance of logistics, spare parts, and long-term sustainment.

Despite Estonia’s departure from the program, BAE Hägglunds remains committed to delivering high-quality CV90s to its customers. With continued investments in production capacity and supply chain management, the company is confident that it will meet demand for the vehicles.

As the joint procurement progresses, European nations can expect to receive their CV90 vehicles at an accelerated pace. While Estonia’s decision has had a minimal impact on the overall program, BAE Hägglunds’ CEO emphasized that the other countries involved will still benefit from the agreement, which aims to provide them with state-of-the-art infantry fighting vehicles.

BAE Systems Hägglunds is well-positioned to meet demand for the CV90 vehicles and deliver them to its customers at an accelerated pace. The company’s investments in expansion and optimization have positioned it for success, despite the challenges posed by Estonia’s departure from the program.

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