The Pentagon Allocates $46 Million for the Development of a Vertical Takeoff and Landing Cargo Drone

The U.S. Army has awarded Elroy Air a contract worth $46 million to develop a hybrid electric vertical takeoff and landing (VTOL) unmanned aircraft for cargo transport, according to an announcement from the Department of Defense (Pentagon).

The grant covers the third phase of the Small Business Innovation Research program to develop a Group 4 unmanned aircraft system, which is the Pentagon's classification for larger drones weighing over 600 kilograms, according to Defence Blog.

Elroy Air will carry out the project at its headquarters in South San Francisco, California, with an expected completion date by February 18, 2029.

The U.S. Army allocated approximately $5.1 million from research and development funds for fiscal year 2026 upon signing the contract.

Elroy Air is working on the Chaparral aircraft, which is a hybrid electric vehicle that takes off and lands vertically using 8 lift fans and flies forward using 4 separate propellers.

According to the company, the aircraft can carry more than 227 kilograms of cargo in detachable containers, with a range of up to 724 kilometers.

The U.S. Navy is developing solutions to protect nuclear submarines from drones, mines, and missiles, through sensors, robots, and artificial intelligence systems to enhance port security.

The U.S. Army has separately worked with Elroy Air this year to develop three automated delivery modes for the Chaparral aircraft, ranging from precise aerial drops from a hovering position, precise aerial drops during forward flight, and self-ground delivery after landing.

During a demonstration held on July 15th at the Elroy Air testing facility in Byron, California, the aircraft completed two payload launches in a single flight, launching a payload weighing 31 kilograms from a low hover position and a payload weighing 32 kilograms while flying at an altitude of 20 meters.

The U.S. Army explained that the pre-programmed delivery system allows the aircraft to complete resupply missions, even if jamming or communication disruptions prevent operators from issuing commands.

Mark Rodrigo, the Head of Federal Business Development at Elroy Air, said: "Contested logistics is one of the toughest challenges facing joint forces, from maritime resupply to supporting troops deployed far from main operational centers."

He added: "One Chaparral aircraft can now resupply multiple locations in a single sortie, without putting the pilot at risk and without the need for personnel at the drop point, which doubles the effectiveness of units operating on the tactical front lines."

Kratos Defense and Security Solutions is exclusively manufacturing the Chaparral aircraft under a partnership with Elroy Air announced on July 20, and Kratos plans to deliver the first aircraft by the end of this year.

Elroy Air has also worked with the U.S. Air Force through the Agility Prime program and has received approval to showcase a prototype of the Chaparral for the U.S. Navy and Marine Corps' Medium Air Supply Vehicle program under the exploratory logistics supply program.