Two thousand vehicles a year would not keep the lights on at a car plant. Most American assembly lines clear that number in the first couple weeks of January, and nobody throws a party. In the underwater drone business, a factory rated for 2,000 a year is a genuine outlier, roughly ten times what the industry treats as normal output.<\/p>\n
That factory exists. It sits in Bristol, Rhode Island, it belongs to a defense startup called Vatn Systems that was founded in April 2023, barely three years ago, and it builds torpedo-shaped autonomous underwater vehicles, AUVs in Navy shorthand, called Skelmir. The plant opened in May 2025 with a rated capacity of up to 2,000 vehicles annually.<\/p>\n
The ribbon-cutting was fourteen months ago, so why write about it now? Because the fourteen months since are the actual story. Vatn has raised $60 million, bought a sonar company, run its drones through a three-way autonomy demo alongside Lockheed Martin, and its CEO has said out loud that he expects to be building tens of thousands of these things a year by the end of 2026. A company that had delivered 12 vehicles total as of spring 2025 is now openly talking like a future torpedo prime.<\/p>\n
Vatn announced the Bristol plant and its new flagship, the Skelmir S12, on the same day, May 12, 2025, in an exclusive with defense outlet Tectonic<\/a>. The building is a converted rubber factory, the opening drew Senator Jack Reed and Rhode Island Governor Daniel McKee, and at the time Vatn was producing around 120 vehicles a year.<\/p>\n The gap between 120 and 2,000 is where Palantir comes in. Vatn signed a partnership with the software company in April 2025 to digitize its production process, and the payoff, according to co-founder and CEO Nelson Mills, is that running the plant at full capacity would only require about 25 additional manufacturing hires. Full production capability was expected by July 2025.<\/p>\n For a sense of how unusual 2,000 is: in the launch announcement<\/a>, Vatn’s director of manufacturing, Brendan Smith, put current industry standards at about 200 vehicles per year. Smith came over from Boston Dynamics, where he scaled robot production from prototype to high-rate manufacturing, which tells you what kind of DNA the company was shopping for.<\/p>\n Mills was blunt about the demand side. “We can’t build our torpedoes fast enough. We can’t build AUVs fast enough,” he told Tectonic, pointing to more than $200 million allocated for lightweight torpedoes in the defense reconciliation bill.<\/p>\n The Skelmir S12 is the product the factory was tooled around. It is a 12.75-inch diameter hull, the same diameter as a standard American lightweight torpedo, and that is not a coincidence. In its AUV configuration it handles reconnaissance, sensor delivery and electronic warfare. Load a warhead instead and it becomes, functionally, a lightweight torpedo.<\/p>\n Per Defense Daily<\/a>, the torpedo version runs about 9 feet long, carries a payload of up to 200 pounds, exceeds 30 knots and has a range beyond 100 nautical miles. Vatn has pitched it as a candidate successor to the MK 54, the lightweight torpedo the US Navy currently fields.<\/p>\n The price is the sales pitch. Mills told Tectonic the S12 works out 7 to 8 times cheaper than the leading torpedoes on the market and about 10 times cheaper than leading AUVs, though he declined to give a unit price. Operators plan missions and monitor the vehicles through an ATAK plugin on a tablet or phone, and the company says a single user can keep tabs on hundreds of units at once.<\/p>\n The first S12 production run sold to government customers before the factory formally opened, with deliveries slated for 2025. The torpedo variant was put on the calendar for manufacture and delivery in 2026.<\/p>\n The number that makes this whole thing interesting arrived a month before the factory did. When the Palantir deal was announced in April 2025, Vatn had exactly 12 vehicles in the hands of government customers. Twelve. The company, founded by brothers Nelson and Freddie Mills, went from concept to first delivery in 17 months, which is quick for defense hardware, but a dozen units is a workshop, not an industrial base.<\/p>\n Investors decided the gap was the opportunity. In December 2025, Vatn closed a $60 million Series A<\/a> led by BVVC, bringing total funding to $76.5 million. The cap table reads like a defense industry reunion: Lockheed Martin Ventures, SAIC Ventures, Hanwha and Airbus Ventures in the round, plus RTX Ventures and In-Q-Tel from the earlier $13 million seed. Joe Musselman, managing partner at BVVC, called it “what we believe is the largest funding round in the AUV space.”<\/p>\n The raise followed Vatn’s first international contract, supporting Singapore’s Defense Science and Technology Agency. And in early January 2026, the company acquired Crewless Marine, a two-person Rhode Island shop founded by former Navy engineers that specializes in underwater acoustic sensing, which is the technology that lets a torpedo actually find what it is hunting. Crewless co-founder Steve Bordonaro, previously chief scientist of the sensors and sonar department at the Naval Undersea Warfare Center, joined Vatn as chief engineer for systems. The stated logic was owning the homing tech in-house instead of buying it from a supplier.<\/p>\n The hardware is not sitting in a showroom. In March 2026, Havoc, Lockheed Martin and Vatn ran a joint demonstration, reported by Militarnyi<\/a>, in which three of Havoc’s Rampage uncrewed surface vessels operated through a Lockheed Martin user interface. One boat put two Skelmir S6 drones, the S12’s smaller 6-inch sibling weighing roughly 55 to 60 pounds, into the water for a coordinated attack below the surface. A second Rampage ran an independent surface strike, and a third handled battle damage assessment.<\/p>\n Robot boat launches robot torpedoes, different robot boat swings by to check the damage. That is the mission profile, demonstrated, in 2026.<\/p>\n It also fits a pattern. The Navy has been quietly buying underwater drones in volume across the board, from the 10-foot Lionfish mine-hunter it keeps ordering more of<\/a> to the Iver4 900 that launches and comes home through a submarine’s torpedo tube<\/a>, and it is even testing an expendable drone built to plant minefields and never return<\/a>. The service has clearly decided the underwater fight will be fought partly by machines. What it has not had is anyone who can build those machines at automotive scale.<\/p>\nA drone until you put a warhead in it<\/h2>\n
Twelve vehicles delivered, then the checkbook came out<\/h2>\n
The Navy is already dropping them off robot boats<\/h2>\n