Allison Transmission secures $250 million tracked vehicle propulsion contract with BAE Systems

Allison Transmission has secured a $250 million contract, with an additional $50 million option, to supply advanced transmissions for BAE Systems’ CV90 MkIV infantry fighting vehicles. This agreement marks the company's largest tracked defense program and accelerates the modernization of European armored mobility platforms.

According to official disclosures, Allison Transmission has finalized a $250 million agreement with BAE Systems Hägglunds to supply 4040 MX cross-drive transmissions for the CV90 MkIV infantry fighting vehicle, with deliveries commencing in 2028 and an additional $50 million option included. Allison is a US-based manufacturer of commercial and defense propulsion systems, while BAE Systems Hägglunds operates as the European land systems arm of the broader BAE Systems organization.

This represents the largest single tracked defense program in the Indianapolis-based supplier's history. The 4040 MX serves as the inaugural production application for this upgraded transmission, which offers enhanced power ratings and electronic controls while maintaining the spatial footprint of its predecessor to integrate seamlessly with Scania engines.

The agreement underscores the broader modernization of European ground combat capabilities. By upgrading the mobility and power infrastructure of the widely deployed CV90 platform, the contract directly supports the operational readiness requirements of allied armed forces amid shifting geopolitical security dynamics.

For defense investors and supply chain analysts, the milestone validates the supplier's strategic focus on advanced tracked mobility solutions. Securing a multi-year production role on a premier European armored platform solidifies its competitive positioning in the global military vehicle propulsion market.