German car giant Volkswagen is reportedly close to signing a deal with Israeli defence company Rafael Advanced Defence Systems to produce components linked to the Iron Dome air defence system at a factory in western Germany, according to media reports.
The proposed joint venture would reportedly convert Volkswagen’s Osnabruck plant from manufacturing cabriolet cars to producing truck chassis and other parts used to transport Iron Dome batteries and future systems such as the Iron Beam laser interception platform.
The move is likely to spark controversy amid Israel’s ongoing war on Gaza , which is widely considered to be a genocide by rights groups and UN experts. Iron Dome is widely regarded as one of the world’s most effective short-range air defence systems and has been used extensively by Israel during its genocidal attack on Gaza and its devastating assault on Lebanon, as well as its war, alongside the US, on Iran and its strikes on and land grabs in Syria.
Critics argue that the system’s effectiveness enables its prolonged assaults on Gaza and across the Palestinian territories, while giving it a wide rein to carry out wars of aggression in Lebanon and Iran. Rafael chief executive, Yoav Tourgeman, visited Germany last week to meet government officials and senior Volkswagen executives ahead of a final approval for the deal, with a written agreement between the parties reportedly already in place, according to German business magazine WirtschaftsWoche. The report said Rafael and Volkswagen would establish a joint venture focused on producing "from the chassis level to the parts level for trucks that will be used to carry combat systems".
Sensitive technologies and missile interceptors would reportedly continue to be produced in Israel and the US.
The Iron Dome system relies heavily on US funding and joint production agreements with American defence companies, making the reported Volkswagen-Rafael venture a significant expansion of the system’s international manufacturing network into Germany.
The proposed partnership also comes amid growing public opposition in the US to unconditional military support for Israel, particularly among younger voters and Democrats, as Israel’s wars in Gaza and across the region reshape long-standing political consensus around Washington’s alliance with Israel.
Berlin has remained one of Israel’s strongest European allies since October 2023, sharply increasing military exports, defending Israel diplomatically and repeatedly describing Israeli security as part of Germany’s "Staatsrason", or core national interest linked to the legacy of the Holocaust.
Critics, however, point out that Germany’s policy has increasingly been used to engender Israel's atrocities in Gaza and Lebanon, with opponents accusing Berlin of applying double standards on international law and human rights.
Germany has also expanded procurement of Israeli military technology in recent years, including the Arrow 3 missile defence system, while increasing cooperation with Israel on air defence and regional security.
In recent months, Volkswagen has reportedly explored selling or repurposing the Osnabruck factory, which is scheduled to close by the end of 2027 as part of wider restructuring efforts tied to declining sales and financial pressures.
The plant currently employs around 2,300 workers, and the reported deal could preserve a significant number of jobs.
Volkswagen has reportedly approached several defence companies, including Rheinmetall, KNDS and Rafael, about taking over production activities at the site.
Volkswagen chief executive Oliver Blume has previously said the company would not directly manufacture weapons, though he has left open the possibility of producing military support vehicles and logistical platforms.
According to the report, production at Osnabruck would initially focus on systems intended for European use.
Iron Dome has already been sold by Israel to Finland and is reportedly being considered by other European countries, including Greece, though Germany itself has not announced plans to procure the system.