ÖRNSKÖLDSVIK, Sweden — BAE Systems is expanding production capacity at its Hägglunds facility in northern Sweden to meet rising European demand for its CV90 infantry fighting vehicles and BvS10 all-terrain vehicles.
Tom Arseneault, President and CEO of BAE Systems Inc., outlined the production outlook during the company’s first-half 2026 earnings call. He said both vehicle programmes are contributing to the company’s growing order backlog in Sweden and its Platforms & Services business.
“Our CV90 and BvS10 combat vehicles are in high demand across a number of European customers,” Arseneault said.
Production capacity expanding
Hägglunds expects to produce almost 300 combat vehicles in 2026 and more than 400 in 2027. The planned expansion represents an increase of about 400% in production capacity compared with previous levels.
BAE Systems has invested more than $300 million at the Örnsköldsvik facility over several years, with additional investment planned. The expansion includes new assembly and welding lines, increased testing and verification capacity, a logistics centre, an integration and inspection facility, and additional office space.
The workforce has also expanded significantly, from about 750–800 employees several years ago to approximately 2,600.
Growing European orders
The production increase is supported by orders from several European customers. Hägglunds is producing CV90 vehicles for countries including Sweden, Denmark, Slovakia and the Czech Republic, while BvS10 programmes involve Sweden, Germany and the United Kingdom.
BAE Systems rolled out the first Slovak CV9035 MkIV at Hägglunds in February 2026. Slovakia has ordered 152 CV90 vehicles.
The company is also working with European industrial partners on production and assembly activities for its vehicle programmes.
Five-country CV90 programme
The planned production figures for 2027 do not include a separate multinational CV90 procurement programme that remains under negotiation.
The current initiative involves Sweden, Finland, Norway, Lithuania and the Netherlands. Estonia was previously part of the six-country technical agreement but withdrew from the planned new CV90 procurement in April 2026.
The programme is based on the CV90 MkIV and could involve more than 400 additional vehicles. BAE Systems submitted its best and final offer in June 2026, with contract negotiations continuing and contract completion expected during 2026. Deliveries are planned to begin in 2028, subject to the procurement being finalised.
BAE Systems Hägglunds has already carried out preparatory work to support production if the order is confirmed.
Contribution to BAE Systems' European business
Hägglunds and Bofors are also contributing to stronger results in BAE Systems’ Platforms & Services business.
Chief Financial Officer Brad Greve said Platforms & Services sales increased 12% in the first half of 2026, while sales from Hägglunds and Bofors increased by nearly 30%, driven by European demand.
BAE Systems Chief Executive Charles Woodburn has identified Hägglunds, Bofors, MBDA and Eurofighter among the businesses supporting the company’s growth in Europe.
The combination of increased production, existing CV90 and BvS10 programmes and the potential five-country CV90 order gives Hägglunds further production opportunities. Arseneault described the Swedish business as having “some really good, strong growth potential” beyond its current performance.
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