Lasers were the weapon system that never arrived. For four decades, directed energy sat in the "five years away" column of every defence budget — prototypes that dazzled at trade shows and then quietly vanished into test ranges. On September 2, the US Army signed the contract that closes that chapter: a $464.8 million award to AeroVironment to produce its LOCUST X3 laser weapon system, the first directed-energy system in US history to move from prototype into production.
The Army's Enduring-High Energy Laser (E-HEL) award is the first-ever production contract for a laser weapon system in US history — a signal that directed energy has left the demonstration phase for good.
The 30 kW LOCUST X3 is platform-agnostic and designed to counter Group 1–3 drones at below $5 per shot, inverting the cost math of kinetic interceptors.
For investors, the interesting number is the production ramp, not the laser: a $30 million expansion of AeroVironment's Albuquerque plant plus a separate >$50 million international LOCUST order suggest demand is starting to outrun supply.
AeroVironment E-HEL contract
The Army's Enduring-High Energy Laser award covers dozens of 30 kW LOCUST X3 systems over the next few years. · AeroVironment, Sept 2026
To understand why this particular contract matters, forget the laser for a moment. The weapon itself is not new — LOCUST has been killing drones in demonstrations since 2023, and the Army's multi-purpose prototype is now in use with soldiers. What changed on September 2 is the scale of intent. The award is an Other Transaction Agreement, not a research grant. It buys "dozens" of systems for multi-year fielding, plus training and support. That is the language of procurement, not experimentation.
What the E-HEL award actually buys
The contract, issued by the Army's Portfolio Acquisition Executive for Fires, funds production of the LOCUST X3 — a 30 kilowatt, platform-agnostic laser built to take down the drones the Pentagon groups as one through three: from small quadcopters up to the RQ-7B Shadow class. AeroVironment will integrate it on the Joint Light Tactical Vehicle first, with palletized configurations and the Infantry Squad Vehicle under evaluation.
Laser vs. kinetic: the cost argument
LOCUST X3 laser: below $5 per shot, reloads through the system's own power supply, fires until the energy source runs out.
The math is the entire story. As we wrote in September in The $53 Billion Split, the cheap-drone problem divides the counter-UAS market into high-cost interceptors and low-cost effectors. E-HEL is the first production vote for the low-cost side.
Why production, not the laser, is the real milestone
Lasers have been "production-ready" before. The pattern that killed earlier programmes was not the beam — it was the industrial base. A weapon that cannot be manufactured in quantity, at a price the budget can absorb, stays a prototype no matter how well it works. AeroVironment has spent the last year removing that excuse. The company announced a $30 million expansion of its Albuquerque, New Mexico facility in March, and it is building a coalition of US suppliers to multi-source components so no single point of failure chokes the ramp.
| Parameter | LOCUST X3 laser | Kinetic interceptor |
|---|---|---|
| Cost per shot | ✔ below $5 | ✗ tens to hundreds of thousands |
| Magazine | ✔ recharges via power supply | ✗ finite, needs resupply |
| Production status | ✔ first US production award | ◐ mature but expensive |
| Weather sensitivity | ✗ affected by atmosphere | ✔ largely weather-independent |
John Garrity, AeroVironment's vice president of directed energy, frames the award as the end of the prototype era. "E-HEL is not a future capability, it is a production-ready system," he said at the announcement. The company is scaling beyond the 30 kW baseline, targeting "well beyond that" in the next 12 to 24 months.
We will start off with that 30 kilowatt class. The big part of the construct the Army is building here is that ecosystem of continued improvement — we will be scaling well beyond that in the coming 12 to 24 months.— John Garrity, Vice President, Directed Energy Systems, AeroVironment
The history laser skeptics keep citing
There is a legitimate caution here, and it is worth naming. The Army's previous laser effort — the Directed Energy Maneuver Short-Range Air Defense, or DE M-SHORAD — drew disappointing feedback from soldiers after its Middle East deployment. That system was tailored to a single Stryker platform and struggled in the field. The contrast with LOCUST X3 is instructive: it is platform-agnostic, runs on proven, commercially mature components, and its AI-enabled tracking (AV_Halo Pinpoint) handles the pointing problem that sank earlier systems.
Why this time is different
LOCUST X3 (2026): platform-agnostic, dual-use commercial components, modular beam director, AI-enabled pointing, and — critically — a production contract with a real budget behind it.
The difference is the business model, not the beam.
Weather, line of sight, and dwell time remain real limits. A laser cannot fire through heavy cloud and must hold a beam on target to burn through. That is why E-HEL is positioned as one layer in a layered defence, not a replacement for the missile. The group 1–3 drone threat is cheap and proliferating; lasers answer that specific problem at a price the budget can absorb.
Where the money goes next
The domestic award is not the only signal. AeroVironment confirmed a separate international LOCUST order worth more than $50 million on September 8 — days after the E-HEL award. Combined with the Albuquerque expansion, the picture is of a directed-energy supply chain scaling from one-off builds to repeatable production. That is the inflection point that turns a military capability into a recurring revenue stream.
First deliveries of LOCUST X3 under E-HEL, and whether they land on JLTV before other platforms
Follow-on production lots — the current award is "dozens" of systems, not the full Army fleet
Whether the >$50 million international order names a customer and expands into a second production line
Power scaling: Garrity's stated move "well beyond" 30 kW over the next 12–24 months
What happens to the laser market a year from now?
Probability: 70% — the E-HEL award plus the separate international order give AeroVironment a two-front revenue base, and the Albuquerque ramp removes the production bottleneck that killed earlier programmes.
✅ Arguments for
International interest surfaced within a week of the domestic award, signalling export pull.
Confirmation criteria: a second E-HEL production lot, or a named export customer, within 12 months.
❌ Arguments against
Past laser programmes promised scale and under-delivered on field reliability.
Disconfirmation criteria: delayed first deliveries, or field reports echoing the DE M-SHORAD disappointment.
Development scenarios
🟢 Optimistic scenario (30%)
Implications: directed energy becomes a durable, multi-hundred-million-dollar annual line item with a handful of credible suppliers.
🟡 Base-case scenario (55%)
Implications: steady, incremental revenue for AeroVironment and its supplier coalition, with lasers capturing the group 1–3 share of the counter-UAS budget.
🔴 Pessimistic scenario (15%)
Implications: directed energy returns to the margins while kinetic interceptors keep the bulk of the budget.
