Unlike Stalin, Hitler was unwilling to push excessive rearmament measures because he believed that his political legitimacy rested upon ensuring German economic recovery. Hitler wanted rearmament, but he wanted it on the cheap, so as not to place an undue burden on Germany’s civilians. Armament factories thus continued to work single shifts and production output remained anemic. Amazingly, Hitler did not prioritize tank production before the invasion of the Soviet Union in June 1941 and allowed the manufacturing base to operate by peacetime standards even in the second year of the war.
Consequently, German industry was not pushed and bullied along as Soviet industry was to quickly develop large numbers of new tanks. The cost of new tanks – not an issue in the Soviet Union – was an important one in a Germany that was still recovering from the Depression. Expensive luxuries, like heavy tanks, were deferred. Even developing a reliable medium tank proved to be a much greater challenge for German industry than it was for Soviet industry. While the Wehrmacht leadership wanted tanks that possessed sufficient firepower and mobility to execute the kind of mechanized warfare envisioned by Reichswehr doctrine of the late 1920s, they were initially forced to accept panzer divisions based mostly upon the Pz.I and Pz.II light tanks, and later ex-Czech Pz.35(t) and Pz.38(t) tanks. The Wehrmacht was slow to develop technical requirements for a new medium tank and ending up asking for two tanks: the Pz.III was intended to be the primary tank of the panzer divisions, with its high-velocity 3.7cm gun optimized for the anti-tank role, while the Pz.IV was intended as an infantry support tank, with its 7.5cm low-velocity howitzer.
Both these programs proceeded at a snail’s pace and whereas the Soviets were already demonstrating the ability to move from prototype to mass production in two years, both the Pz.III and Pz.IV programs required five years before they were ready for series production. Nor were German tank designs made with much regard to suitability for mass production, and fabrication was inefficiently spread across eight different firms. Due to a habit of continually introducing upgraded models, production output remained low. Even at the start of Operation Barbarossa, the production of Pz.III and Pz.IV medium tanks was still insufficient to even properly equip all the existing panzer divisions, never mind replace combat losses. Due to these design and production choices, the Third Reich’s panzers were usually outnumbered by their Soviet opponents and their limited ability to replace tank losses shaped how German commanders employed their panzers.
The Pz.III and Pz.IV were both tentative and very conservative designs, and as it turned out, not terribly innovative. The main armament of the Pz.III was based on the existing 3.7cm Pak gun and eventually upgraded to the short-barreled 5cm KwK 38 L/42 in August 1940, which Hitler believed – rightly – was inadequate. He directed that a long-barreled 5cm gun be developed for the Pz.III, but the