Russia doesn’t produce tanks, UralVagonZavod with half production

MOSCOW ($1=62.03 Russian Rubles) — The only tank manufacturer in the Russian Federation – UralVagonZavod has partially suspended production, employees have been sent on unpaid leave and financial difficulties due to lawsuits against the Russian manufacturer continue. At the moment, UralVagonZavod does not produce the desired amount of tanks but has focused its efforts on repairing destroyed combat equipment.

On the brink: Russia can no longer produce T-90 and T-14 Armata tanks
Photo credit: Uralvagonzavod

Military analysts predict that the difficulties faced by the Russian manufacturer UralVagonZavod, the war in Ukraine, in which Russia is throwing a lot of armored vehicles, but also losing a lot of armored vehicles, will lead to a “reformatting of the entire world arms market in the foreseeable future. That is, the Russian Federation may be pushed out of its niche,” says Alexander Kovalenko in his commentary.

Production problems for UralVagonZavod are significant. In addition to the lack of components and spare parts, as well as the suspended supply of Western technology to Russia, UralVagonZavod is facing a “cooperative problem along the entire chain in the industry.” For example, the company is losing contracts and orders because another Russian manufacturer Barnaul Machine-Building Plant is losing customers, including countries from North America, India, China, and Egypt. Now, as with UralVagonZavod, the Barnaul Machine-Building Plant is laying off employees and stopping production, and only a year ago it was exporting to more than 30 countries around the world.

Burnt tanks return to Russia, repair plants refuse repairs
Photo credit: Defense Express

As wrote two days ago [July 7th], UralVagonZavod even refuses to repair burned tanks coming from the war in Ukraine.

Financial problems

Last but not least, the Russian tank manufacturer, which, in addition to military equipment, also produces metro trains and wagons for train sets, is experiencing serious financial problems due to obligations to Russian companies. For example, the Russian technology company IBS still expects UralVagonZavod to repay its debt to it, which amounts to nearly $800,000. The amount for such an enterprise should not be a problem, but an accounting report from last year [2021] shows that the total short-term and long-term liabilities of UralVagonZavod exceed 1.5 billion USD.

Despite the war and suspicions of “politicized courts” serving Russian President Vladimir Putin’s state-wide policies, Russian courts have rejected a large part of UralVagonZavod’s claims to reschedule the repayment period for accrued debts and put Russia’s largest and only tank manufacturer on the brink of survival.

UralVagonZavod’s profit has fallen sharply, and the state continues to help finance the purchase of new production technologies, creating a “false illusion” of a stable house of cards, which, however, may soon collapse.

“Whether there were new tanks is a very good question. In fact, UralVagonZavod has not been releasing new tanks from scratch for several years, as the Russian leadership likes to report about it. The company modernizes old Soviet tanks and presents them as new,” Alexander Kovalenko notes journalists. As experts explain, this is done to cut public funds.

The sanctions

Burnt tanks return to Russia, repair plants refuse repairs
Photo credit: Defense Express

As we reported on July 6, the Ukrainian intelligence continues to claim that Russian industry has not yet overcome its dependence on Western technology and that economic sanctions are having a serious impact. In April this year, the US also mentioned problems in Russian production and repair of military equipment. In a speech at the end of March, Thea Kendler, assistant secretary for export administration at the Ministry of Trade, said that in addition to UralVagonZavod, the Russian company Baikal Electronics was experiencing difficulties. It is a company producing computers and semiconductors. According to Kendler, the company no longer receives integrated circuits. They are needed, she says, to maintain the company’s server equipment.

Kendler recalled that only 5% of imports to Russia come from the United States, but almost 50% come from Europe. At the same time, Taiwan has dealt a very serious blow to Russia’s military industry as the local TSMC has left the Russian market. TSMC is the world’s largest chip maker. With the departure of the Russian market from TSMC, Russia is losing a huge number of MIPS needed in the development of military intelligence systems and other military systems. In particular, it concerns the interruption of access to Elbrus chips.

There were signals already in May

Reports of problems with heavy military equipment and the inability to carry out quality repairs, both in the field and in the repair plants of the Russian Federation, appeared as early as May. Several train sets were then seen transporting obsolete T-62M and T-62МВ tanks into the interior of Ukraine, the tanks being mobilized and taken from the reserve as well as from the inventory of military units in Tajikistan, Libya, and Syria.

Watch: Russia uses reserves and sends Soviet T-62 tanks to Ukraine

According to unconfirmed information and according to Ukrainian sources, as of July 1, Russia has already lost over 1,500 tanks, 3,737 armored personnel vehicles, 800 artillery systems, 246 MLRS, and 105 anti-aircraft systems.


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