Vertical Aerospace dismisses Rolls-Royce’s exit from flying taxis

The first prototype of the company crashed during testing just under a calendar year ago. Rolls-Royce withdrew as a key technology provider and early shareholder three months ago. The New York-quoted stocks, which valued the company once at more than £2billion, have been wiped out. As the aerospace industry descends on Hampshire today for the largest Farnborough Air Show yet, the question arises: Will Vertical Aerospace, Britain’s hope for advanced air mobility, also known as electric flying cabs, ever make it to the ground?

Vertical Aerospace will not be exhibiting its VX4, an eight-rotor vertical take-off vehicle powered by battery at Farnborough this year. This is primarily because the first prototype of Vertical Aerospace’s VX4 vertical take-off and landing vehicle, powered by eight rotors, is currently in pieces in different laboratories. Unmanned testing ended abruptly last August when a rapid 30ft descent led to a collision with tarmac at Cotswold Airport. The second prototype, which is being prepared to be tested with a pilot in the near future, is currently in a hangar on an airfield in Gloucestershire.

Vertical Aerospace, despite its low-key appearance at Farnborough is at least metaphorically back in the take-off phase. The company’s planned testing and regulatory approval regime should allow it to fly its first dummy run into Heathrow, along existing helicopter flight routes, by the end the year. Vertical has dismissed the departure of Rolls-Royce as a more internal matter with that company rather than a comment on Vertical. It is also preparing for a capital market day in order to attract new money and investors to help drive the business towards industrialisation.

Vertical Aerospace, a Bristol start-up, was founded in 2016 by Stephen Fitzpatrick. The Ovo Energy billionaire committed to the scifi ambitions of flying electric vehicles while stuck in a long, crowded traffic jam in Sao Paulo. Vertical Aerospace is still working to bring the VX4, which can fly at 150mph with a range of 100 miles when fully charged, to commercial production. First deliveries are expected in 2027.

Fitzpatrick (46), originally imagined a future where electric vertical takeoff and landing vehicles – so-called “eVTOLs” – would be so commonplace that they could be used as easily as dialing an Uber. This is still decades away. The first VX4 users will be super-rich people, as the VX4 is priced at $4 million per unit. For example, they could use one to shuttle from the vertiport in Oxfordshire (a heliport for eVTOLs), which is under construction, to Heathrow, operated by Virgin Atlantic, as part of its Upper Class package to passengers heading to the United States.

In the future, eVTOLs could be used to transport tourists or businessmen between important locations in areas where there is no or poor infrastructure for transportation. Travelling between Manchester and Leeds in Britain is an obvious example.

Vertical and eVTOLs, in general, face high hurdles. It is necessary to test their battery and drivetrain technologies. They must prove that they are commercially viable. The vehicles must also be proven safe, despite the many obstacles in certification by multiple agencies around the world, beginning with Britain’s Civil Aviation Authority.

Stephen Fitzpatrick made a commitment to his ambition of flying electric vehicles while stuck in traffic in Sao Paulo

Michael Cervenka, former head of future technologies at Rolls-Royce, will become Chief Technology Officer of Vertical in 2019. The argument is that eVTOLs are essentially helicopter replacements. The zero-emission engines replace the gas-guzzling aircraft that pollute our air. Instead of the helicopter-like wup, wup, wup noise, they will emit a low hum, which is said to be especially important for urban areas.

Cervenka, 49 years old, claims that Vertical, which has 1,500 aircraft in Britain, Europe and North and South America, as well as the Far East, is awash with $6 billion worth of orders. Virgin Atlantic, American Airlines, and Japan Airlines will be the launch operators. Avolon, an aircraft leasing company, ordered 500.

He acknowledges that Vertical suffered “reputational damages” over the last year, and that the crash that occurred with the first prototype demoralised the 350 employees of the company. He also argues that any aeronautical engineers would have recognized “the gold dust” in terms of lessons learned and data collected from the failed propeller blade and the subsequent power distribution failure that caused the crash.

Second prototype said to be more sophisticated. A third aircraft currently in production is considered even more advanced. It boasts new propellers, electrical power units and smaller batteries from Honeywell. Leonardo, an Italian helicopter manufacturer, and Britain’s GKN also have lightweight fuselages.

The realisation that there was no battery technology available for electric aircraft until recently has been crucial to the program. Vertical was forced to invest millions of pounds in an investment site near Bristol, where it had to design and engineer their own battery system.

According to Cervenka, the damage caused by Rolls-Royce’s decision to withdraw from the program in the spring was more of an optical effect than a real one. Tufan Erginbilgic was the new Rolls CEO who made the corporate decision to reduce a commitment towards electric aviation due to the projected losses and the costs of investment at a time that the FTSE 100 firm is trying to regain its investment grade credit rating and make money.

Rolls will compensate Vertical in any case. This is not a significant amount for Rolls but is (although it hasn’t been disclosed) a substantial amount for Vertical. Vertical reported in its latest filings that they had cash reserves of just £49 million.

Vertical Aerospace is aiming to have its flying taxis in London and other major cities around the world.

Vertical’s valuation reached $2.3 billion after its New York listing in 2022 through a “blank cheque” company or Spac (a special purpose acquisition vehicle). Investors soon lost interest in the new blank-cheque technology businesses that were floated and Vertical’s share price plummeted. It is now valued at less that $200 million.

Vertical burns through £90-100 million per year. It relies on cash infusions from Fitzpatrick who holds a 72% stake and grants from UK Aerospace Technology Institute. It will look for new investors if initial test pilot flights are successful.

Vertical will continue to pursue its dream of industrialisation and commercialisation if the fundraising is successful. Cervenka says it will take hundreds of millions to reach customers in North America and Japan. “We won’t be the first on the market,” says Cervenka, referring to Volocopter and other competitors like Lillium Joby Archer Eve.