There were a number of reasons why Hitler and the Oberkommando of the Wehrmacht had underestimated Soviet troop strength and capabilities before the 22nd of June in 1941. First of all were the failures of intelligence to accurately produce a realistic estimate of enemy troop strength and their ability to recover said losses. The Germans were aware of the size of the red army in general terms and that they would in theory be outnumbered, but they had a lack of respect for the capabilities of Soviet troops. Finally the Germans did not account for the soviets relocating major factories and centers of industry from central and southern Russia to the East of the Urals – beyond the range of both ground forces and the Luftwaffe.
Intelligence reports before the start of Operation Barbarossa in June of 1941 failed to account for the size and scale of the massive rearmament process and military reforms that had been ordered following the debacle of the Winter War with the Finns in 1939 and 1940. Even though the Soviets were eventually able to prevail over the Finns, the conflict showed serious flaws in Red Army training and tactics. Intelligence failed to account for large tank formations and the emergence of newer tank models like the KV2 and T34’s that were just beginning to come off production lines around that time period. These newer tanks models were a cut far above older T-26 lighter tanks that at that point were prone to malfunctions and obsolete to German tank models. Even with close to 28,000 tanks at the start of the invasion – many of these would be destroyed, disabled, or captured by the end of the year. Seeming to confirm that the German commanders and intel officers were correct in their assumption of Soviet Tank capability – disregarding the tremendous difficulty with which German units were having in knocking out T34 models and KV2’s that lighter german tanks and anti tanks guns couldn’t hope to penetrate. The Soviet tankers nicknamed the lighter German anti tanks guns like the Pak 36 “The Door knocker” due to its poor performance against their tanks. Soviet aircraft production was heavy but the were heavily reliant on obsolete or inferior aircraft like the Il16 and LaGG 3 (nicknamed the Guaranteed Varnished Coffin by its pilots due to its acronym, wooden construction, and poor performance), Soviet aircraft production would eventually see great examples of design and performance like the Yak 3, 7, and 9 – along with the Lavochkin La5, Ilyushin Il2 Sturmovik, and other mass produced designs. The soviets lost up to 97% of their air strength after the end of 1941 and had to completely retrain their newer batches of pilots on brand new machines that had little testing. Soviet pilots would not be able to rival the skill, tactics, or competence of German pilots until very late in the war when they began to have more confidence in their ability – along with the introduction of comparable fighter aircraft. This was also not accounted for as the Germans did not consider the ability with which the Soviets would have to produce the massive amounts of aircraft the were able to muster over the war. Germany also did not account for Lend-Lease American aircraft like the Bell P39 Airocobra, A20 Boston, P62 Kingcobra, P40 Hawk, B25 Mitchell and others. Lend lease would also provide tens of thousands of quality trucks and Willy’s Jeeps that gave the Russians much greater mobility and reliability in their mobile forces. Even though intelligence had dropped the ball early on German commanders were confident that they could over come the superior number of obsolete and unreliable soviet tanks that they were knocking out and capturing by the thousands in 1941.
German commanders and Hitler personally going into Barbarossa had a clear contempt for the average Soviet soldier in regards to his fighting ability and morale. They believed – with some credence – that the normal Red Army soldier and the entire command structure (Hitler famously remarked that “one need only to kick in the door and the whole rotten structure would come crumbling down”) would collapse under the onslaught of the assembled invasion force of close to 2 and a half million men – the largest ever deployed in the history of warfare. After the Red army’s abysmal performance in the winter war against the Finns, this seemed to confirm to the Germans that this was indeed the case – the Red Army was in such a perilous state of affairs that they could not hope to stand to the might of a Blitzkrieg attack on their motherland. They did not count on the fact that major reforms to increase military effectiveness and a willingness of Stalin to reinstate former disgraced military commanders like Konstantin Rokossovsky, among others, after the purges of 1937 and 1938 when events transpired against him. Formerly taboo tactics of Deep Battle and driving penetrations by newly formed Tank armies would form the basis of a reinvigorated Red Army with competent and motivated commanders. Stalin lacked the ideological shame Hitler had in his actions and was willing to listen to the advice of his commanders or reinstate those that had previously fallen out of favor. Red Army soldiers put up tremendous resistance to German advances and attacks that caused ever increasing amounts of casualties that the Germans could not adequately replace. The Germans did not count on the specialty the Soviets had in defending against attack, “every village into a fortress” as was remarked. Dug in emplacements underneath houses, earthen bunkers, determined fighters that would fight on long past the point at which other European armies would have surrendered all typified German underestimation of Red Army skill and resolve – no matter the amount of prisoners they took or divisions they destroyed. This resolve became the most famous at Stalingrad, in which the 62nd Army under Chuikov was able to pin down and survive the onslaught of the 6th Army under Friedrich Paulus long enough to allow massive reserves to cut off and surround them, thus turning the tide of the entire Eastern Front.
Finally the Germans thought once they captured the Soviet industrial and agricultural heartland of Ukraine that the industrial capacity to make war would cease for the Soviet Union. What the Germans did not count on was the ruthlessness with which Stalin relocated thousands of factories from their original locations to beyond the Ural mountains – along with most of their workers. Even though these facilities had to endure terrible conditions early on, some production lines were brought online even before the roofs had been built, with snowflakes falling on fully operational tank production lines. Even with the Germans capturing the Ukraine early on in the war after the resounding successes at Kiev, Odessa, and the Crimea – with Erich Von Manstein pulling off some of the most impressive tactical feats of the 20th century – the industrial capacity of the Soviet Union would endure. By 1943 Soviet tank, aircraft, and gun production had surpassed or even doubled anything the Germans could even hope to muster from their own economy; from factories and industrial facilities beyond the range of their bombers. Soviet war production was able to far surpass the limits of German industrial might by their relocation of factories – something that was never accounted for in the German invasion of the Soviet Union.
So an underestimation of forces by German intelligence, a lack of respect or admission of Russian fighting ability and resolve, and the relocation of major industries beyond the reach of the German military all accounted for the survival of Soviet war making capacity. These failures contributed directly to the failure of operation Barbarossa, Blue, and Citadel to turn the tide against the Red Army. German war production and reserves simply couldn’t keep up with the fanatical defense that the Soviets displayed in blunting the advance of the Wehrmacht. They made grave errors in underestimating the capabilities and ideological will that drove the Russian people around Stalin rather than against him (though they didn’t have much choice to begin with)
Sources: Richard J. Evans “Third Reich at War” – Anthony Beevor “Stalingrad: The Fateful Siege”, various documentaries and textbooks