Two Ukrainian defence firms announced Monday they have begun mass production of first-person-view (FPV) strike drones fitted with onboard terminal guidance, a step forward that company leaders said will sharply raise battlefield effectiveness at little extra cost.

Terminal guidance technology allows a drone or missile hit its target automatically in the final stage of its flight.

Once the drone is close, onboard AI enhanced sensors tor take over to steer it precisely without the operator controlling it – a “fire-and-forget” strike.

Vyriy, one of Ukraine’s largest drone manufacturers, said it will equip its best-selling Vyriy-10 FPV model with the TFL-1 terminal guidance module developed by Kyiv-based autonomous technology firm The Fourth Law.

The companies said production of the Vyriy-10-TFL-1 variant has already started.

“The use of our system has increased drone strike effectiveness by 2-4 times, while the cost rises by only 10%.” Yaroslav Azhnyuk, CEO of The Fourth Law, said in a statement, obtained by Kyiv Post.

Vyriy said it kept the price low so units are affordable on a large scale. The Vyriy-10-TFL-1 will cost Hr.18,500 (about $448), Babenko said – only marginally more than a classic FPV drone.

Vyriy’s CEO, Oleksii Babenko, said machine-vision AI allows the drones to hit the targets accurately, despite electronic warfare interference

“Artificial intelligence for target detection is a truly effective strike tool. It is an indispensable part of future guidance systems that significantly increases effectiveness,” Babenko said.

Demand for drones with terminal guidance has risen sharply, the firms said, and officials at the General Staff, the Ministry of Defense and the Ministry of Digital Transformation have urged the scaling of such autonomous solutions.

The TFL-1 module is the product of nearly two years of engineering work at The Fourth Law and has received NATO codification. Its software can be updated within minutes, ensuring frontline units have the latest AI algorithms.

An added incentive for combat units is Ukraine’s “e-points” reward system. For every successful strike using a guided drone, troops receive the points, which can be spent on the Brave1 marketplace to buy drones and equipment. The companies said one e-point is roughly equal to Hr.10,000 (about $242).

Venture investment fuels “Final Mile” AI autonomy

In July, The Fourth Law announced its first round of investment from a group of venture funds and angel investors based in the European Union, the United States and Canada – “and even a bit from Ukraine,” Azhnyuk wrote on LinkedIn.

The company said it will use the funds to speed development of so-called “final mile” autonomy: the AI systems that take control of FPV drones in the last part of their flight, homing in on their targets automatically.

TFL has said its system hands control to an onboard computer running AI algorithms in the last 500 meters (550 yards) of flight.

The company did not disclose investor names or the size of the funding. It said its first product, the TFL-1 autonomy module, and the Lupynis-10-TFL-1 unmanned aerial system increase FPV mission success by two to five times while raising costs by only 10–20%.