The move was announced by the engine manufacturer’s CEO, Tufan Erginbilgiç, during the company’s annual Capital Markets Day on November 28, 2023. According to the new plan of Rolls-Royce CEO Erginbilgiç, the company will focus on increasing its profits in the jet engine business and focus here. On the other hand, the sale of the electric flight section is planned.Rolls-Royce exits electric propulsion business
Erginbilgiç said in his statement: “Rolls-Royce is at a very important point in its history. “We are creating a high-performance, competitive, resilient and growing Rolls-Royce with the financial power to control and shape its own destiny.” he said.
According to Erginbilgiç’s plans, a record operating profit of between £2.5 billion and £2.8 billion per year is targeted, compared to £837 million in 2022. The main focus of this goal is the company’s jet engines department. It is aimed to increase the operating margins of this division from 2.5% to 15% to 17% in the medium term. Rolls-Royce will also expand its defense industry business, which produces engines for military jets and boats and nuclear reactors for submarines. Additionally, profitability will be increased in the power systems unit, which produces civilian boat engines and generators.
In addition, Rolls-Royce announced that it will exit the electric propulsion business. The relevant unit operating here is also planned to be sold. The sale of the electrical division could bring between £1 billion and £1.5 billion to Rolls-Royce’s coffers. In this context, we can say that Rolls-Royce is focusing on sustainable aviation fuel (SAF) as the main driver of decarbonization for the aviation industry. All engine types of Rolls-Royce in production will be able to operate with 100% SAF.
Rolls-Royce was developing electric propulsion systems for eVTOLs, including Vertical Aerospace’s VX4. What’s not entirely clear from the divestiture announcement is whether Rolls-Royce plans to stop working solely on direct battery electric propulsion systems such as those developed for the Vertical, or whether the shift will also affect its broader work on new hybrid-electric propulsion systems for aircraft.The company also completed the tests of UltraFan, the world’s largest and most efficient aircraft engine, in the past months. This giant aircraft engine will operate with 100% SAF. Although Rolls-Royce is exiting the electric-assisted flight business, various companies are expanding their investments here. Therefore, the unit offered for sale by Rolls-Royce could be an important resource for countries and companies interested in electric aviation.
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