The Terrex started off as a private venture between Singapore Technologies Engineering and Timoney Technology, intended for export sales. The prototype Terrex AV81 armoured fighting vehicle that was exhibited for the first time at DSEi 2001. The initial AV-81 design utilised conventional coil springs shock absorbers but later variants have seen the introduction of hydro-pneumatic struts with real-time damping control. An electric-hybrid drive system was also developed.
In mid-2004, one prototype and one pre-production model had been built and was evaluated throughout Asia and Europe, where the vehicle was offered for a number of emerging wheeled armoured vehicle requirements. This was further influenced by the emerging United States' Interim Brigade Combat Team (IBCT) concept, which calls for the need of wheeled armoured fighting vehicles (AFV) as opposed to tracked AFVs.
The Terrex AV-82 was developed in 2005 equipped with a more advanced driveline and hydro-pneumatic suspension system, and a number of changes from the AV81 including a flat underbody instead of a V-shaped hull and revised rear suspension.
The Singapore Armed Forces will acquire at least 135 Terrex ICVs to replace its V-200 armoured vehicles, with all active Infantry and Guards battalions to begin training to operate from the vehicle in February 2010. The Second Battalion, Singapore Infantry Regiment, recently acquired the Terrex as part of its shift into a motorised infantry battalion. The Indonesian Army has plans to purchase 420 units and has also expressed intent to produce the Terrex locally under license. Turkish automaker Otokar has also joined with ST Kinetics to produce the Terrex AV-82 (renamed Yavuz) for the Turkish Armed Forces.
In August 2012, the U.S. Marine Corps awarded SAIC a developmental contract for the Terrex for the Marine Personnel Carrier program.
On 18 July 2013, SAIC, along with ST Kinetics and Armatec Survivability Corporation, successfully completed two weeks of evaluations for the Terrex at Camp Pendleton. The tests included a series of water performance demonstrations in various sea conditions and an evaluation of human factors and stowage capacity. The Terrex completed all required surf transit and ocean swim maneuverability tests at its fully loaded combat weight. It demonstrated load capabilities through successful stowage of gear and supplies that Marines would require for three days of operations, with space available for additional equipment. The human factors evaluation demonstrated the spacious interior by accommodating the specified number of combat-equipped Marines and enabling rapid tactical and emergency egress through a quick-release hatch. The Terrex repeated ocean swim and maneuverability results achieved in a March 2013 rehearsal event. SAIC began ballistic and blast tests at the Nevada Automotive Test Center in May 2013, and was scheduled to complete all ballistic and mine blast demonstrations in July. The Marines are to deliver a final report in September 2013.
The Marine Personnel Carrier was put on hold in June 2013, restarted in February 2014, and then restructured as Phase 1 of the Amphibious Combat Vehicle (ACV) program, which includes the previous MPC competitor entries.