A Deutz 6-cylinder irrigation engine. (Rory Doyle/Bloomberg)
March 27, 2026 10:05 AM, EDT
Deutz AG sees double-digit revenue growth for 2026 as the agricultural engine maker pushes deeper into defense, positioning itself to benefit from Europe’s rearmament drive.
The Cologne-based company expects revenue to jump by roughly a fifth to as much as 2.5 billion euros ($2.9 billion) this year, partly driven by an expansion into military applications. The shift underscores how civilian manufacturers are tapping the surge in defense spending.
Deutz, the company behind the inventor of the gasoline engine, is also moving into decentralized energy for off-grid power for data centers and industrial sites.
“We can scale up and down quickly because we are used to cyclical business cycles,” CEO Sebastian Schulte said in an interview.
Deutz is in talks to supply engines for wheeled and smaller tracked military vehicles. It’s also exploring a deeper partnership with defense tech startup ARX Robotics GmbH, which makes unmanned vehicles, to scale production at its German sites.
European NATO countries are entering a phase of accelerated defense spending, with allies agreeing to target at least 3.5% of GDP for core military budgets, according to McKinsey. That could lift total European defense spending toward 800 billion euros by the end of the decade.
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Deutz has stepped up its defense push through stakes in ARX Robotics, drone-maker Tytan Technologies GmbH and the acquisition of drone drive specialist Sobek. Its engines are also used to power Patriot air defense systems in conflict zones including the Middle East and Ukraine.
Fresh from TMC, ATA President Chris Spear takes a candid look at what today’s fleet maintenance trends reveal about the broader state of trucking. Tune in above or by going to RoadSigns.ttnews.com.
Rising defense revenue reflects Deutz’s early move into the sector as other industrial firms expand their presence through partnerships and pilot projects.
Renault SA is starting to make drones in collaboration with French defense contractor Turgis Gaillard. German auto supplier Schaeffler AG is set to enter an agreement with defense tech company Helsing GmbH to provide electronic components for unmanned aerial vehicles.
The company, which traces its roots to 1876, when founder Nicolaus August Otto invented the first modern gasoline engine, moved up into Germany’s mid-cap MDax index this week after its stock price more than doubled during 2025.
