Japan signs deal to begin mass-production of interceptor drone

Japan’s Acquisition, Technology & Logistics Agency has signed a mass-production contract with Terra Drone Corporation for an interceptor drone designated Terra B1, the agency announced August 25.

Terra Drone said Terra B1 was the only aircraft to pass the agency’s demonstration test among the systems evaluated, advancing it alone to the mass-production phase.

The contract followed trials that the Japan Maritime Self-Defense Force conducted on ATLA’s behalf between July 15 and August 6, testing four different interceptor drone models. ATLA has not disclosed the contract’s value or the number of Terra B1 units it plans to procure.

The award is the latest step in Japan’s Interceptor Drone Rapid Acquisition Program, which ATLA launched June 5 to field counter-drone systems capable of addressing long-range one-way attack UAVs such as Shahed-type drones. According to Terra Drone, the program was designed around the operational lessons of two different conflicts: in the Middle East, defenders have relied on comparatively expensive interceptor missiles against low-cost Shahed-type attack drones, straining missile stockpiles and cost-effectiveness, while in Ukraine, low-cost interceptor drones deployed against similar threats have achieved high interception rates.

ATLA received interceptor drone proposals from 38 companies after opening the solicitation, Defense Minister Shinjiro Koizumi said in early July. The agency selected four companies, including Terra Drone, for the demonstration phase announced July 15.

ATLA’s published program materials called for demonstration tests in late July and early August, followed by a mass-procurement contract in late August and delivery around September 2026, compressing the process from demonstration to mass procurement into roughly three months. ATLA’s evaluation criteria covered effective range, flight duration, flight distance, maximum and cruising speed, guidance method, the number of aircraft that can be controlled simultaneously, launch and recovery methods, integration with other systems, safety measures, operational track record, and the time required from contract signing to delivery, according to Terra Drone.

Terra Drone said it will now move to commence mass production of Terra B1, establish domestic production and procurement systems, and strengthen supply chains for components, batteries, communications and control equipment. The company also plans to build out maintenance, replenishment and training support, along with system integration for operations at bases, vessels and other facilities.

Terra Drone said initial deployment is expected to begin with the Maritime Self-Defense Force, with the company also considering future expansion to the Air Self-Defense Force and Ground Self-Defense Force depending on operational needs.

Terra Drone entered Japan’s defense sector earlier in 2026, announcing plans in March to establish a U.S.-based subsidiary, Terra Defense, by the end of the current fiscal year. The company secured its first Japanese defense contract in May, a roughly $800,000 order from ATLA for 300 modular unmanned aerial vehicles, with delivery required by September 30.

That earlier contract built on testing Terra Drone conducted in Ukraine between April and May, when the company evaluated two interceptor models, the rocket-propelled, short-range Terra A1 and the fixed-wing, long-range Terra A2, in the country’s active combat environment. Terra Drone has invested in Ukrainian interceptor drone developer Winnylab and has said it plans to bring two Ukrainian interceptor drone companies into its corporate structure as consolidated subsidiaries.