The ongoing conflict in Ukraine and former President Donald Trump’s hesitance towards NATO allies has catalysed investment in European defence technology, creating a ripe environment for startups to capitalise on the shift. One prominent example is UK-based Vertical Aerospace, a startup focused on developing electric vertical take-off and landing (eVTOL) aircraft primarily for air-taxi services. It has already secured over 1,500 preorders for its VX4 model from notable clients, including American Airlines and Japan Airlines.
Recently, Vertical Aerospace announced plans to diversify its offerings by developing a hybrid-electric version of the VX4, aiming to cater to opportunities in defence and logistics. CEO Stuart Simpson stated that the aircraft’s design has always included defence capabilities, and the new variant could cover a range of up to 1,000 miles, vastly exceeding the original eVTOL range.
Vertical’s capabilities are of particular interest to defence sectors due to the aircraft’s low noise and heat signatures, which enhance stealth operations. The company is collaborating with Honeywell to create advanced flight control systems, indicating a strategic move towards autonomous aircraft operations, a trend that is increasingly vital for modern military applications.
Vertical is not alone in pursuing hybrid-electric aircraft for defence; Archer Aviation, another Californian startup, recently announced a dedicated defence unit and plans to work with weapons manufacturer Anduril. Archer’s initiative has attracted $430 million in investments, showcasing a growing trend in the hybrid-electrics space.
Despite positive reception, Simpson clarified that their hybrid aircraft development is not opportunistic but rather a product of 18 months of dedicated work. The European landscape for defence technology, particularly since the escalation of tensions in Ukraine, has seen unprecedented funding, with investments reaching $1 billion last year, marking a fivefold increase since 2018.
As the conflict propels European nations towards enhancing defence budgets, Vertical Aerospace has found itself without significant domestic competitors following the bankruptcies of Germany’s Volocopter and Lilium’s operational halt. This positions Vertical uniquely to address the rising demand for defence capabilities in eVTOL technology.
To sustain its momentum, Vertical will likely require further capital, having raised about $468.8 million previously, yet still falling behind competitors like Joby Aviation and Archer in funding. Vertical is focusing on efficiency, operating with a significantly lower annual expenditure of approximately $100 million compared to competitors’ higher spending.
Looking ahead, Vertical aims to have the first certified pre-prototype of its VX4 built next year, integrating the hybrid power system in subsequent models. While the company has yet to acquire military customers, Simpson noted ongoing discussions with governmental bodies, reinforcing their distinct position as the sole European player in the defence-ready eVTOL sector.
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