Hanwha Aerospace Cancels $454.8 Billion Parts Contract... Moves to Wind Down UAM Business

Prolonged Commercialization Delays
Accelerating Restructuring of Next-Generation Businesses

Hanwha Aerospace has effectively entered the phase of winding down its Urban Air Mobility (UAM) business, which it had positioned as a future growth engine.

On August 3, Hanwha Aerospace announced that it had agreed to terminate its parts development and supply contract with UK-based UAM specialist Vertical Aerospace (VA), a deal that was worth 454.8 billion won.

This brings an end to the agreement between the two companies, who signed the contract in October 2023 for the supply of tilting & blade pitch systems and electric actuators for VA's electric vertical take-off and landing (eVTOL) aircraft, the VX4—nearly three years after its signing.

The tilting & blade pitch system is a core component that transfers motor power to the propellers and adjusts flight direction and thrust. The electric actuator is a device that controls UAM operations using the rotary power of a motor driven by electric energy.

On July 20, 2022 (local time), at the Farnborough Airshow held in London, UK, Shin Hyunwoo, then President of Hanwha Aerospace (left), and Michael Cervenka, President of Vertical Aerospace, took a commemorative photo in front of Vertical's VX4 aircraft after signing a memorandum of understanding for joint cooperation on urban air mobility (UAM) electric actuators. Hanwha Aerospace.

At the time, Vertical Aerospace was developing the VX4 with the goal of commercializing it by 2025, while Hanwha Aerospace had planned to supply parts to VA through 2036. However, with the prolonged delay in commercialization, the cancellation of the contract was ultimately reached, according to industry sources.

Hanwha Aerospace stated, "We faithfully fulfilled our contractual obligations after signing the agreement, but as market conditions and our strategic direction have changed compared to the original business objective, we have agreed to terminate the contract as a strategic decision."

The company added that it has established a new foundation for collaboration by signing a memorandum of understanding (MOU) to maintain cooperative relations.

Within the industry, the consensus is that the termination of this contract marks the effective beginning of Hanwha Aerospace's restructuring of its next-generation businesses.

In 2023, Hanwha Aerospace had presented 'New Mobility,' including UAM, alongside defense and space, as the company's three main business pillars.

This content was produced with the assistance of AI translation services.