In The Wake of Rolls-Royce’s Exit from Electric Propulsion, Which Industry Players Will Emerge Victorious?

(London, United Kingdom) Rolls-Royce (OTCMKTS: RYCEY) is shutting down its electric propulsion unit, a decision that has sent shockwaves through the aviation community, and the impact of which is expected to be widespread and significant.  Having failed to find a buyer for the division after announcing intent to sell the electrical propulsion division last year, Rolls-Royce announced the shut down of the division at the end of September (2024).

Photo of engine work being completed at a Rolls-Royce factory courtesy of Rolls-Royce via Electric VTOL news.

Prior to the shutdown, Rolls-Royce had been working to develop electrical propulsion systems for both forthcoming electric vertical takeoff and landing (eVTOL) and regional aircraft.  The company has since chosen to dispose of this non-core operation and shift its focus to traditional turbofan and hybrid propulsion systems, such as its revolutionary UltraFan engine, which aims to reduce emissions and improve sustainability compared to conventional combustion engines.
 
Previously, Rolls-Royce was considered to be one of the leading developers of electric propulsion systems, and its research provided optimism about the future of electric flight. However, with the decision to cut back on electric propulsion to instead focus on core operations, the outlook of emission-free aviation has become much more uncertain.

Specifically, Rolls-Royce chose to end its contract with electric vertical takeoff and landing (eVTOL) vehicle developer Vertical Aerospace (NYSE: EVTL), offering financial compensation rather than continue its involvement with electric propulsion research, which could represent a significant setback for Vertical, and others. Rolls-Royce was also working in partnership with the advanced air mobility (AAM) units of Hyundai Motor Group (OTCMKTS: HYMTF) and Airbus (AIR.PA), among others.

As part of the companies’ agreement, Vertical received $34 million from Rolls-Royce, which is expected to cover the anticipated costs of an alternative EPU design contract and provided an extension to the company’s cash runway.

Rolls Royce’s former partners are now forced to find different collaborators, a process that could take considerable time and resources and significantly delay innovation and development.

Photo of the installation of Rolls Royce motors on Vertical Aerospace’s VX4 courtesy of Vertical Aerospace via Electric VTOL News.

In the wake of Rolls Royce’s exit, several other companies are poised to take on bigger roles in electric propulsion, including RTX (NYSE: RTX)-owned Raytheon, General Electric (NYSE: GE) and eVTOL developers such as Lilium Air Mobility (NASDAQ: LILM) and Archer Aviation (NYSE: ACHR), which are building their own respective electric powertrains.

Additionally, similar to Vertical Aerospace’s agreement with Rolls-Royce, eVTOL developers Joby Aviation (NYSE: JOBY) and Volocopter are building electric powertrain systems in partnership with Toyota (NYSE: TM) and Safran Electrical & Power – a division of Safran (SAF.PA) – respectively.

As for Raytheon, the company recently announced a successful preliminary design review (PDR) of its hybrid electric propulsion unit, which combines two electric motor generators from Collins Aerospace within a GTF engine from Pratt & Whitney as part of its SWITCH project and is supported by the European Union’s Clean Aviation Joint Undertaking.

Raytheon aims to test its electric powertrain soon at Collins Aerospace’s power development facility in Illinois, after which it will begin full-scale assembly and testing. The development of this engine would help drastically reduce emissions for short and medium range aircraft, and while there is still significant progress needed, the PDR represents a major step forward for sustainable flight.
 
Additionally, as a result of Rolls Royce’s exit from the electric propulsion sphere, GE Aerospace stands to step up and play an increased role in the future of sustainable aviation. General Electric is currently working with NASA to develop a hybrid electric engine as part of NASA’s Hybrid Thermally Efficient Core (HyTEC) project, which seeks to develop small core engine technologies to enable fuel burn reductions and the additional use of electric airplane systems through power extracted from the engine, and to advance engine operability and compatibility with sustainable aviation fuels. 

Artist concept of a NASA-developed small-core jet engine installed in General Electric Aerospace’s CFM RISE jet engine design courtesy of General Electric Aerospace via NASA.

“Single-aisle aircraft are the biggest contributors to aviation carbon emissions,” said Arjan Hegeman, general manager of future of flight technologies at GE Aerospace, as quoted in a recent press release. “That’s why we’re focusing on key technologies that will enable next generation single-aisle aircraft with much greater efficiency and reduced emissions than the current fleet.”

While GE is largely working with hybrid systems, electric aircraft developers such as Lilium Air Mobility have recently made significant advancements in sustainable aviation, offering hope for the future of electric flight.  This past June, Lilium announced a successful test of its landmark electric propulsion unit at maximum thrust, an encouraging breakthrough in the development of zero emission VTOL flight. Working in collaboration with other aerospace designers such as Denso, Honeywell, Aeronamic, and SKF, Lilium has positioned itself to be a front runner in the development of electric aviation. Its recent test results have indicated both performance and reliability, demonstrating that eVTOL flight via the Lilium Jet is more than just far-off future technology.
 
Given recent progress, Lilium – along with its eVTOL peers, including Archer, Joby, Vertical Aerospace and Volocopter – has the opportunity to fill the void left by Rolls Royce and cement its place as a significant contributor to the electric flight industry.

Rendering of Lilium’s electric vertical takeoff and landing vehicle, the Lilium Jet, couresty of Lilium.

As the fully electric propulsion industry recovers and rebuilds itself, development of hybrid systems, such as Rolls Royce’s UltraFan engine and GE Aerospaces HyTEC project with NASA, continues to thrive. Given that hybrid engines represent a short-term improvement with respect to aerospace emissions, allowing aircraft to drastically reduce emissions and improve efficiency, these systems will play a critical role in bridging the gap to electric flight — while they don’t necessarily provide a complete solution on the aviation industry’s path to net zero, they do provide a valuable improvement compared to current combustion engines. As battery and energy technologies continue to develop, electric flight will become more and more realistic, but until then, hybrid engines will become the most viable short-term sustainability solution, particularly for longer distances that cannot yet be covered by single-charge electric engines.