A total of 148 tanks are to be produced, with costs estimated at 906.89 million British pounds sterling (1.17 billion US dollars).

[22] In 2005, the MOD recognised a need for a Capability Sustainment Programme (CSP) to extend the service life of the Challenger 2 into the mid-2030s and upgrade its mobility, lethality and survivability.

[23] The CSP was planned to be complete by 2020 and was to combine all the upgrades from CLIP (Challenger Lethality Improvement Programme), including the fitting of a 120 mm smoothbore gun.

[36][37][38] In October 2018, BAE Systems unveiled its proposed Challenger 2 LEP technology demonstrator, the "Black Night".

[citation needed] The turret also received modifications to improve the speed of traverse and to provide greater space as well as regenerative braking to generate and store power.

[46] They said in a report entitled "Obsolescent and outgunned: the British Army's armoured vehicle capability",[47] that "Despite having spent around 50% of the allocated budget (£800 million), the programme has yet to place a manufacturing contract.

[51] It was announced on 23 January 2024 that the first pre-production Challenger 3 had been delivered,[52] with trials commencing in Germany in February[53] and the first live-firing of the main armament in April.

[54] On 18 April 2024, the Defence Secretary, Grant Shapps, attended the rollout of the last of eight pre-production models at the RBSL factory in Telford.

On 27 April 2024, the Ministry of Defence announced that a statement of intent had been signed with Germany for the development of an Enhanced Kinetic Energy (EKE) armour-piercing round for both Challenger 3 and Leopard 2 tanks.