The conflict in Ukraine has dramatically transformed Sweden’s defense manufacturing sector into one of Europe’s most rapidly expanding military production centers, with perhaps no company experiencing this shift more dramatically than Hagglunds, an armored vehicle manufacturer based in the small northern Swedish town of Ornskoldsvik.
BAE Systems has owned Hagglunds since 2004, but the company’s roots trace back to the late 1800s when it started as a family furniture business before transitioning through various industries including buses, trams, aircraft, and finally armored vehicles during the 1950s.
The end of the Cold War brought significant challenges for the defense contractor, and Tommy Gustafsson-Rask faced the difficult task of eliminating one-third of the company’s employees when he took over as managing director of BAE Systems Hagglunds in 2012.
However, geopolitical tensions began shifting the company’s prospects around 2014. “I think the 2014 annexation of Crimea was when we saw something starting to happen,” Gustafsson-Rask explained during an interview at the Hagglunds testing facility in Ornskoldsvik. He noted that business really accelerated just prior to Russia’s full-scale invasion of Ukraine in 2022.
The transformation has been remarkable. “From having a typical order book of a couple of hundred million U.S. dollars, we’re now at 8 billion U.S. dollars. So it’s an enormous development,” Gustafsson-Rask stated.
Sweden’s military equipment exports have experienced explosive growth, increasing more than threefold to 28 billion crowns ($3.02 billion) in 2025, compared to 8 billion in 2015.
The Swedish defense sector now provides employment for approximately 30,000 people, with the majority working at Saab, the manufacturer of Gripen fighter aircraft and A-26 submarines. Saab alone maintains an order backlog exceeding 274 billion crowns.
Hagglunds has committed $300 million toward expanding its manufacturing capabilities, including the addition of a third production line this year. Manufacturing output has increased by 400% since 2020, while the workforce has grown from 800 to 2,600 employees, making it the largest employer in the town of 56,000 residents.
The company’s primary success story centers on the fifth-generation Combat Vehicle 90 infantry fighting vehicle. This armored vehicle operates with a three-person crew and can transport up to eight fully equipped soldiers. More than 1,300 units have been delivered, with an additional 600 currently on order, establishing it as one of Sweden’s most successful military export products.
The CV90 has proven its effectiveness in combat situations in Afghanistan and is currently being utilized in Ukraine. Hagglunds anticipates securing contracts for an additional 500 CV90s from five European countries later this year.
Reports from Ukrainian forces have been largely favorable, although drone threats remain a concern. Notably, no Ukrainian personnel have been killed while inside a CV90, and Ukrainian President Volodymyr Zelenskyy personally expressed his gratitude to Gustafsson-Rask during a visit to Sweden.
“He came forward, hugged me, and told me that your CV90s are saving our soldiers’ lives, and I get goosebumps even now,” Gustafsson-Rask recalled.
Each CV90 carries a price tag of approximately $10 million and has been purchased by ten European nations.
Sweden maintained military neutrality for more than two centuries before becoming a NATO member in 2024. According to the Swedish International Peace Research Institute, the country ranks as the European Union’s seventh-largest arms exporter.
