Rolls-Royce finds buyer for electric propulsion business

Rolls-Royce has found an undisclosed buyer for the electric propulsion business it announced was for sale late last month. 

Although they will remain anonymous until the transaction is closed, a source at the company confirmed to Revolution.Aero that a buyer had been found for Rolls-Royce Electrical and the sale was well underway. The division has largely focused on developing electric propulsion systems for eVTOL aircraft, such as Vertical’s VX4. 

Rolls-Royce announced the intention to sell its electric business as part of a wider restructuring plan put into action in late November. Our source told us CEO Tufan Erginbilgiç has been tasked with redressing the balance sheet and that means focusing on investments with short and medium term returns, for Rolls-Royce electric propulsion is a long-term bet. The restructuring plan could see divestitures across the group raise up to $1.9bn over the next five years.

Speaking at the time, Erginbilgiç said: “For example, in Rolls-Royce Electrical we are looking at options to exit in the short run or alternatively for the right value, reduce our position to minority with an intention to exit fully in the mid-term. We believe, given the world-class capability we have built in Advanced Air Mobility, that this will represent good value to a third party and will allow us to focus on our core electrical engineering activities in Power Systems, Defence and Civil Aerospace.”

It is not clear if Vertical Aerospace knew about Rolls-Royce’s divestiture plans before last month’s announcement. According to a statement first reported by Future Flight, the eVTOL developer said: “Vertical is working with Rolls-Royce to understand today’s announcement in more detail. In parallel, we continuously assess our strategic options to ensure we can successfully deliver the VX4 in its certification timeline.”

The divestiture announcement also did not clearly indicate if Rolls-Royce was pulling the plug on development of all electric propulsion technology. It has been working on a number of hybrid-electric and onboard power systems alongside work to create eVTOL propulsion technology. Our source revealed Rolls-Royce plans to focus on its core businesses first and foremost, however where there is crossover development of technology will continue. Which is good news for the firm’s bets on hybrid-electric propulsion technology, especially that which uses sustainable aviation fuel (SAF), and hydrogen.