Rolls-Royce Holdings Plc (LON: RR) has officially withdrawn from the electric flying taxi sector, a decision CEO Tufan Erginbilgic robustly defended this week, citing escalating costs and persistent regulatory setbacks as decisive factors.
The move marks a significant pivot for the engineering giant, which had once positioned itself as a frontrunner in the burgeoning electric vertical take-off and landing (eVTOL) market.
Erginbilgic, speaking at a high-profile industry event in London, underscored the mounting economic hurdles that ultimately rendered the flying taxi venture unsustainable. “What I’ve seen is that the market is getting pushed to the right all the time,” he stated, referencing ongoing delays in regulatory approvals and market readiness.
The CEO revealed that initial cost projections for each electric taxi stood at £1 million ($1.35 million), but these quickly ballooned to £3 million per unit. “It cannot be a mass market when it is that expensive,” Erginbilgic emphasized, highlighting the disconnect between technological ambition and commercial viability.
The decision to shutter the Advanced Air Mobility division follows a period of waning enthusiasm for eVTOL projects within Rolls-Royce’s leadership. While former CEO Warren East had championed the company’s electric aviation ambitions, including the record-setting Spirit of Innovation aircraft, Erginbilgic has steered the company toward core aerospace and energy operations.
Efforts to sell the flying taxi unit proved unsuccessful, prompting a full shutdown and a renewed focus on profitable, scalable technologies.
Rolls-Royce’s exit comes at a turbulent time for the eVTOL industry, with several high-profile competitors facing financial strain or bankruptcy. The company’s strategic refocus is already bearing fruit in its core businesses, with robust operating profits and a return to investment-grade credit ratings.
Engine flying hours for Rolls-Royce’s flagship Trent XWB and Trent 1000 engines have surpassed pre-pandemic levels, reinforcing the company’s dominant position in commercial aviation.
