A Tomahawk costs roughly $2.6 million per round. The Air Force is buying a different cruise missile at about $218,000. Consequently that spread, rather than any single new weapon, explains why a company founded in 2024 just opened a low cost cruise missile factory in Texas.
What Covenant Opened
Covenant exited stealth on September 9th with a 105,000 square foot plant in Grand Prairie, Texas, built to mass produce Anthem, a ground launched cruise missile carrying a payload above 200 kilograms with a reported range near 750 miles.
| Detail | Figure |
|---|---|
| Plant | 105,000 square feet, Grand Prairie, Texas |
| Year one output | 1,000 units |
| Serial production begins | First quarter of 2027 |
| Target capacity | 5,000 annually |
| Capital raised | More than $250 million across 3 rounds |
| Valuation | Above $1 billion |
| Orders booked | Roughly $150 million |
Notably, investors include Andreessen Horowitz, Founders Fund, Lux, 8VC, Aleph and Lightspeed. The company also operates a 110,000 square foot plant in Saxony, Germany and a smaller facility in Israel.
The Shift From Exquisite to Affordable
For decades, precision strike weapons were built to maximize capability per round. Accordingly, they were purchased in small batches at prices that reflected it. A Tomahawk runs about $2.6 million per unit and a JASSM-ER roughly $1.4 million.
However, recent conflicts changed the calculation. Sustained expenditure rates exposed how quickly small inventories deplete. Furthermore, replacing a $2 million round at wartime tempo is not a budget most countries can hold. Consequently the requirement shifted toward what the field now calls affordable mass.
For example, current procurement shows the scale of the shift. The Air Force moved to buy 3,010 low cost cruise missiles in 2026 for $656.3 million. In other words, that works out to roughly $218,000 per missile. Other programs sit in similar territory, including one design reported at $246,000 per unit.
Why This Became a Manufacturing Problem
In short, this is the part that matters for industrial readers. Building a weapon at one tenth the price is not primarily an engineering achievement. Instead, it is a production engineering achievement.
A $2 million missile can tolerate hand fitting, low volume suppliers, exotic materials and long qualification cycles. After all, the unit absorbs the cost. A $218,000 missile cannot. It requires commercial components where possible, design for assembly, and tooling that holds tolerance at rate. Equally, it needs a supply base able to deliver thousands of sets rather than dozens.
That is why these companies talk about square footage and annual unit counts in their announcements rather than range and payload alone. Covenant’s stated path runs from 1,000 units in year one toward 5,000 annually. Notably, hitting that curve is a rate problem. Established primes are pursuing the same low cost cruise missile target. For instance, Lockheed Martin is developing its own line, and the Pentagon has pushed for cheaper long range strike weapons on compressed timelines.
What Has Not Been Demonstrated
Two caveats belong on the record. Importantly, neither is a criticism of the company.
First, serial production does not begin until the first quarter of 2027. Certainly, a ribbon cutting establishes that a building and tooling exist. It does not establish a qualified line running at rate, and defense qualification is where volume schedules commonly slip.
Second, Covenant has not published a unit price for Anthem. The company positions the weapon as costing a fraction of comparable legacy systems. However, Anthem’s payload and range put it closer to the heavy end of the category than to the smallest designs. Without a disclosed figure, the specific cost claim cannot be checked. In addition, the more than $250 million the company raised is venture funding across three rounds, rather than a disclosed capital investment in the Grand Prairie plant.
What Suppliers Should Take From It
Affordable mass programs buy differently than legacy programs, and the difference is worth understanding before quoting.
In this market, rate and repeatability outrank peak capability. A supplier who can hold tolerance across thousands of units with documented process control is more valuable than one producing a superior part slowly. In addition, these programs lean toward commercial and modified-commercial components, which opens the door to manufacturers who never held a traditional defense portfolio. For example, machining, castings, electronics assembly, propulsion components and airframe structures all fall inside that scope. The same automation-heavy capital equipment showing up in rising machine tool orders is what makes that rate achievable. You can follow where defense capital is landing in our U.S. Manufacturing Investment Tracker.
Frequently Asked Questions
What is Covenant’s Anthem missile?
Anthem is a low cost cruise missile, ground launched, carrying a payload above 200 kilograms with a reported range near 750 miles. Covenant plans to build it at a 105,000 square foot plant in Grand Prairie, Texas, starting serial production in the first quarter of 2027.
How much does a low cost cruise missile cost?
Current low cost cruise missile programs sit near $218,000 to $250,000 per round. By comparison, a Tomahawk runs roughly $2.6 million per unit and a JASSM-ER about $1.4 million. Covenant has not published a unit price for Anthem.
What is affordable mass?
Affordable mass is the shift away from small batches of highly capable, expensive precision weapons toward far larger quantities of cheaper ones. Specifically, it emerged from operational experience showing how quickly limited inventories deplete at sustained expenditure rates.
How many missiles will Covenant produce?
The company plans 1,000 units in the first year of serial production, which begins in the first quarter of 2027, with capacity scaling toward 5,000 annually.
Who funds Covenant?
Covenant has raised more than $250 million across three rounds at a valuation above $1 billion, backed by Andreessen Horowitz, Founders Fund, Lux, 8VC, Aleph and Lightspeed. It has booked roughly $150 million in orders covering qualification, research and development, and production contracts.
Why does low cost missile production matter to manufacturers?
Because building at one tenth the legacy price is a production engineering problem rather than a design problem, the supplier base changes. These programs favor commercial components, design for assembly and suppliers who can hold tolerance at high rate, which opens opportunities to manufacturers outside the traditional defense base.
The Bottom Line
The competitive axis in strike weapons has moved from performance per round to cost and rate per thousand. That is a manufacturing contest. Consequently, it rewards companies that think in takt time rather than in test flights. Watch the first quarter of 2027 to see whether the announced capacity becomes delivered capability. For more, see the full IndustrialSage Headlines Ep. 33.
Author: Wes Garrett
Content and Growth Marketing Producer | From Strategy to Execution, Delivering Impactful Media Solutions and Client Success
