Canadian company plans to make land drones for Ukrainian military in deal that could be worth ‘tens of billions’

Canadian defence technology company Dominion Dynamics Inc. and Ukraine‘s Tencore LLC say they will jointly manufacture uncrewed ground vehicles (UGVs) in Canada for the Ukrainian military.

The two companies signed a memorandum of understanding (MoU) on Tuesday at the Association of the United States Army’s annual conference in Washington, D.C., and are hoping to ink a definitive agreement by the first quarter of 2027.

Eliot Pence, founder and chief executive of Ottawa-based Dominion Dynamics, expects the final agreement to be worth “tens of billions’ of dollars.

“The need and demand for UGVs in Ukraine is massive,” he said. “The Ukrainian government has asked for 20,000 alone. We’re also thinking about this in terms of the broader (North Atlantic Treaty Organization) alliance, as there is a clear need for autonomous systems in the Arctic.

Kyiv, Ukraine-based Tencore, which makes UGVs, sometimes called ground robots or land drones, for defence and civilian use cases, has delivered around 5,000 units to the Ukrainian military since 2024.

“We aim to scale that number up dramatically,” Pence said.

The partnership will combine Tencore’s drone-making experience and Dominion’s AuraNet, a software system designed for Arctic operations, in the vehicles. Tencore would assign a team to lead the initial technology transfer and train technicians in Canada to build its UGVs by early 2027.

The assembly and testing will take place at Dominion’s Kanata, Ont., facility, Pence said, while the components required to build the vehicles — from drivetrains to robotic and propulsion system parts — will be acquired from Canadian suppliers where possible.

“We definitely have the parts available in Canada and for those that we don’t, we will endeavour to invest in,” he said. “But sourcing entirely from Canada is the intention.”

In the near term, the two companies need to produce and test a few vehicles and Tencore needs to receive an export licence from Kyiv to authorize the technology transfer.

“There’s a contribution by Ukraine in terms of intellectual property and demand, from Dominion in terms of productive capacity and from the Canadian government to actually acquire those assets and send them over there,” Pence said. “Those are the three (pillars) that need to actually get operationalized before we have UGVs with AuraNet on the battlefield in Ukraine.”

Dominion has also advocated for converting idled automotive and electric vehicle plants in Canada for defence sector manufacturing. It previously expressed interest in taking over Jeep maker Stellantis NV’s Brampton, Ont., facility, but the carmaker last month inked an MoU to sell its plant to Canadian armoured vehicle manufacturer Roshel Inc.

“We were very interested in Stellantis, but the reality is there are other facilities that are not in the middle of a union dispute or negotiations,” he said, referring to the automaker’s ongoing contract negotiations with Unifor. “Our timeline is much quicker and more rapid, so we just need to get moving.”

Pence said Dominion is currently looking at three facilities in Ontario and Quebec to boost its manufacturing footprint to 450,000 square feet from 3,000 square feet, but conversations have centred around an aerospace and defence site in Toronto.

“There’s no reason why we shouldn’t be … aligning the defence industrial strategy with this kind of critical asset that we’ve built up over the last 60 years,” he said, pointing to similar activity in Germany.

For example, Volkswagen AG has converted one former auto factory into a defence manufacturing hub and Rheinmetall AG is turning former auto and industrial plants into military and munitions factories.

“I strongly believe that we should be doing the same,” Pence said.