Good day everyone, and thank you for joining us today for the Lytham Partners Fall 2026 Investor Conference. My name is Joe Diaz . I am a Managing Partner at Lytham Partners. I would like to welcome Vertical Aerospace, which trades on the New York Stock Exchange under the ticker EVTL. Today, David King, Chief Engineer, will be taking us through the company presentation. Let us get started. Welcome, David. Thank you for your time today. Let me turn the floor over to you for your presentation.
Well, thank you, Joe, and thanks for the opportunity to introduce Vertical Aerospace. My name is David King. I am the Chief Engineer at Vertical. I joined Vertical four years ago after 33 years working for large aerospace OEMs, including 14 years as Chief Engineer. I packed up my bags and moved across the ocean four years ago, and I did not move to England because of the weather. I packed up and I moved across because I am confident that what we are developing at Vertical Aerospace is the future of vertical lift. Let me explain that to you. Vertical was founded in 2016, and it was founded as a spinoff from Formula 1. Our founder was Stephen Fitzpatrick , and in 2016, when Stephen hatched the idea for Vertical, his Formula 1 team was competing in São Paulo, Brazil at a race. Stephen got stuck in a traffic jam.
It took him two hours to make it the 9 miles from the center of the city to the racetrack. While he was stuck in the traffic, he was thinking about the meeting he just had, where Formula 1 was discussing the maturation of electric powertrains and how the technology of lithium-ion batteries and electric powertrains can give a really high power density. What Stephen saw was the maturation of that technology with the need to be able to get in and around congested areas as a great solution for the problem. The problem, we see it everywhere we go, right? People are having difficulties moving around congested areas. The great cities of the world are getting more congested, and that need is all over the place.
At Vertical, we have developed our flagship product, Valo, to be able to address that need, and I would like to explain to you the unique differentiators and the value proposition we have. Let me show you a short video to introduce Valo to you.
As our skylines rise ever higher, our streets stand stubbornly still. Congestion grows. Opportunity trapped on the ground. Until now. Introducing Valo from Vertical Aerospace. Engineered for safety, space, and serenity. Clean, quiet, and fast. Crossing cities in minutes, not hours. Valo is not a concept, it's here. This is the new urban mobility. Valo is a new era of possibility for everyone. All you have to do is look up.
The Valo, as we just showed you in that video, has some unique differentiators. Let me just go through those quickly. First of all, it's designed for versatility. Designed for versatility, the key was to oversize the cabin and oversize the power so that what we're delivering is going to be the most powerful with the biggest usable volume in its space. What that allows is one platform to be used for multiple applications. Number two, the technology is mature. I'll show you a video. You don't have to take the Chief Engineer's word for it anymore. We flew our full-scale piloted prototype at the Farnborough International Airshow in July 2026, and we flew it five straight days, did a mission representative profile in front of an audience that was over 140,000 people over the five straight days. Number three, we've got a validated commercial demand.
We have an order book with over 1,500 conditional preorders from customers all over the globe. We are certifying with the United Kingdom Civil Aviation Authority with a concurrent validation with Europe's certification agency, EASA, and fast sequential validations in other regions in the world, including the U.S. with the FAA. What we have is a clear path that's defined and published, and we've already done a mini certification project on our full-scale prototypes with the CAA. The way I look at this is, it's as if you're taking a class, and you have a final exam that's pass-fail. Your risk of passing that test goes down a whole lot if you already know what the questions are, you know what the pass-fail criteria are, and you've already done a practice test with the same professor. That's where we are with the U.K. CAA.
We've used the certification basis and published means of compliance on our prototype to achieve our permits to fly, and by going through that practice run, we've been able to do two things. Number one, work out the criteria and the methods. Some of these are new and novel because of the technology. But also develop a trust with the authority. We've been able to get an approval of our design organization and earn privileges that allows us to do some of the certification activities on our own with just oversight from the CAA. We also have defense opportunities that are materializing around the globe.
We have advanced discussions in the U.K., and we are initiating discussions in both the U.S. and Europe to look at how a dual-use platform of the Valo with an extended range derivative, which I will explain, which is a hybrid electric propulsion system, that will meet several demands that are available today and growing in Europe and the U.S. Number six is we have a capital-efficient model. Some of this is because of the location in Bristol, England, which is the aerospace hub of Europe and the birthplace of the Concorde. But some of this is because of a capital-efficient OEM business model, where we are responsible for the aircraft and the certification, and we rely on high-pedigree Tier 1 aerospace suppliers to provide the systems and equipment. The versatility.
The key to the Valo's design and differentiator is designing it for versatility, so that we can have one aircraft for multiple applications. Let me tell you why this is important. I learned this from decades working for helicopter companies. It takes a long time, it costs a lot of money to develop a new aircraft and certify it to commercial standards. If it requires a new platform for a different application, the return on investment gets diluted quite a bit. However, the Valo strategy and the differentiator that we showed you in the video is that the aircraft is designed to be able to fulfill multiple missions with modifications. So it is one type certification project, and then modifications under supplemental type certificates to be able to customize it for various missions. Looking at defense as an example.
The defense missions generally require ranges above what the all-electric Valo can provide. We have a hybrid electric derivative that can fly up to 1,000 miles for defense cargo missions. What we are seeing is the need to be able to move cargo for logistics missions require that kind of range, in particular for the Asia-Pacific geography right now. We are also seeing the ability to take the Valo, which has a highly automatic fly-by-wire flight control system, and add an automation package so that it can fly autonomously in one small step from the basic certification is something that adds value for the defense markets. What we are seeing is everywhere we take the aircraft, we are hearing applications that are well-suited for the Valo. Some of these that we did not think of initially, but the versatility of the aircraft can provide that.
As an example, when we displayed the aircraft at the Farnborough International Airshow, I met with a United States Army General, and he said he would like to have at least two of them at every base to be able to go fence line to fence line, to be able to evacuate patients, and to be able to bring VIPs in and out of the base. Because right now, the vertical lift aircraft that are being used for defense missions are often old and very expensive to operate helicopters. Similarly, on the commercial side, there was an article in The Wall Street Journal published recently that highlighted that helicopter operations in and around New York City are limited because of noise complaints. What we have with the Valo design is an aircraft in its cruise mode that you will see it, but you will not hear it.
We have 140,000 people that can attest to that experienced the flyover at the Farnborough Airshow. That is just a unique attribute of the electric propulsion system and the tiltrotor design with four very quiet propellers in its cruise condition, and it cruises on a wing. This one platform approach is by design, and this is what the team has focused on the last several years, is to take the technology maturation and what we learned from validating the technology through the full-scale flight test programs, and then developing a design that has a core set of systems that are common for multiple applications. If you look at the aircraft, it is the same airframe, whether it is a customized version of the Valo for extended range hybrid electric autonomous versus the electric air taxi in and around congested areas. The systems, the core systems are common.
The certification basis is common with just a modification for the supplemental type certificate. The basic engineering investment has a high level of commonality. When we look at it, there is essentially a 90% commonality in the program to develop the aircraft and the program to develop a derivative such as the hybrid electric. The baggage bay, as you saw from the video, is oversized so that we can accommodate 12 suitcases in the baggage bay. However, that also provides the versatility for two things. One is we can take out the bulkhead between the cabin area and the baggage bay and then have a long cabin for air medical applications, or we can take the baggage bay and use the upper half of it, install a turbo generator system to be able to have a hybrid electric range extender version. That is a unique characteristic of the Valo design.
If you look at the versatility from a top view of the interiors, you can see at the upper left-hand corner, our basic design configuration will have the comfort of a business class seat, of a premium cabin experience. We see the passenger experience as critical to the growth and demand for eVTOLs, and that is one of the focus areas. We have sized the cabin so that it can expand from four passengers to six passengers. If you do the math there, that is a 50% improvement in productivity from an operator's perspective, and that could be accomplished through the technology roadmap of our batteries, where the battery energy density is expected to improve by about 15% every two years.
With that improvement that we are already demonstrating in our labs right now with the next generation battery cells, we can reduce the mass of the batteries, add payload to the cabin, and add one seat for five passengers, add two seats for six passengers. The cabin of the Valo was sized to be able to fit two in the cockpit, even though it is going to be certified for a single pilot. So that allows a second seat to be used as an observer, to be used for certain missions that desire a crew of two, or for training missions, or even as a seventh passenger seat.
In the hybrid electric version, the versatility of the cabin allows the turbo generator to be installed in the back to use some of the baggage bay area to then free up the large cabin volume and the cockpit for cargo for an autonomous version. We have also designed the aircraft for the versatility that it can operate optionally piloted. Vertical is not just an aircraft company, we are also a battery company. Since the company was founded in 2016, we have focused a large amount of the investment in developing the technology at our Vertical Energy Centre.
The Vertical Energy Centre designs, tests, certifies the battery systems and develops the secret sauce of the algorithms and the sensing systems that manage the batteries in flight, that are able to tell the pilot how much energy is on board and how much energy the aircraft is using as it flies from its origin to its destination. That is a key enabler to be able to provide the safety standard that we are certified to, which is an airliner-level safety standard. There are all kinds of secondary market applications for this battery technology that are expanding right now. If you just look at energy demands across the world, you will see that the need to store energy and offload the dynamics of grids is growing. This battery technology allows us to provide a secondary market for our batteries, to sell it into those types of markets.
What we see is through our OEM business model, our aftermarket revenue from our battery replacements will be higher than the revenue we are going to receive from the aircraft, which is typical for a vertical lift aircraft. For the batteries, it allows us to take that niche and that core capability to be able to fulfill a revenue stream, but also to give us a competitive advantage on the technology roadmap. We also have, which we have not announced yet, is the ability to use this battery technology and develop a proprietary charging system. We announced at the Farnborough International Airshow that we have a project sponsored by the U.K. government called ECLiPSE, which is developing a proprietary charging system that is a high-power fast-charging system that could be used for aircraft and also ground vehicles that are electric. Farnborough.
Farnborough was a tremendous week for our company, where we demonstrated five straight days our full-scale flying prototype. Our full-scale flying prototypes have been flying since July of 2024, so it was a two-year journey of doing the technology development validation correlating with our analytical models up to the Farnborough Airshow. This was the first eVTOL. We are unique. We are the first eVTOL to do public full-profile demonstrations, take off and land vertically, convert into cruise condition, cruise back and forth over the English countryside in front of the audience, and then transition back to a helicopter mode and do some low-speed maneuvers and land vertically. The 140,000 people that watched it, we were able to get some testimonials. The two things that stood out to me was number one was people saying they could see it, but they could not hear it.
Now, that is vital for us to unlock the third dimension for mobility in and around congested areas because right now, as The Wall Street Journal highlighted in a recent publication, helicopters are held back by their noise. They are also held back by their operating costs. We are able to fly for eight minutes each day, fly in thrust borne mode, in wing borne mode, in transition mode, at a GBP 7 worth of energy operating cost at a rate of about 10 pence per kWh . Let me show you a quick video. Here it is flying on the first day at the Farnborough International Airshow. It went back and forth over the audience a few times to highlight the quietness, and then came in and did some precision hovering maneuvers, and then a precision vertical landing.
The flight control system of the Valo is designed to be able to land precisely, which provides some of the versatility for shipboard defense applications. As I mentioned before, we have a clear path to certification through the United Kingdom Civil Aviation Authority, and it is an airliner safety standard. EASA made a decision years ago that eVTOL, they expect the demand to increase, and the utilization over populated areas to be such that it warrants the one in a billion failure rate of an airliner. That standard required us to design that in from the start. Now, we have committed to that design, and that is part of the proprietary Valo technical definition.
What that does is that is a higher safety standard than other regions in the world are asking for, but that provides global portability and essentially gives us a moat in Europe until others can modify their designs to be able to meet that standard. We have a pure OEM business model where we rely on high-pedigree aerospace Tier 1 suppliers to provide the majority of the systems and the equipment, with the exception of the batteries which we build ourselves and the propeller systems, which we will build to print, meaning that we own the proprietary design of the propeller systems. That is an area that we have invested lots in optimizing the design for noise and performance and efficiency. We are going to retain that as core IP, but have the parts be built by high-pedigree aerospace suppliers.
This also helps our path to certification, where we can leverage the decades of experience that these suppliers have. For example, our flight control computers will be delivered by Honeywell Aerospace, who delivers similar flight control computers to Boeing for the 787. The Boeing 787 has moved over a billion passengers safely over many, many years. We are using that proven pedigree for a very critical aspect. What that is going to allow us to do is have a clearer path to certification because we leverage that experience from our partner, Honeywell. The passenger experience that I mentioned with the roomy cabin, safe, silent, smooth, and sustainable experience. We heard those words from the people that saw it at Farnborough.
But designing it for passenger experience also provides operator economics because the roominess of the cabin provides the versatility to grow from four seats to six seats, which provides the economics, and the versatility of each platform gives it a high end-of-life value. Also gives it the versatility to be able to use it for various applications. So just to summarize, Vertical Aerospace is uniquely positioned in the advanced air mobility market segment. Advanced air mobility is positioned to have a huge and wide-ranging total addressable market. We have proven the technology in full-scale piloted flight. We have 140,000 people that witnessed it at the Farnborough International Airshow. We have a clear path to certification.
We are now starting to open up the order books again on top of the 1,500 pre-orders that we have, and are in advanced discussions with some defense customers for our extended range hybrid electric derivative. We have a pure OEM market with a set of high-pedigree aerospace partners. And we continue to operate at a fraction of the cost of our peer companies with a capital-efficient business model. With that, I'll turn the microphone back over to you, Joe. Thank you for the time.
Thank you, David. Excellent presentation. Great to learn more about Vertical Aerospace. Also, thanks to everyone for watching. If you have any questions or would like to schedule a meeting with Vertical Aerospace, please send me an email at DIAZ, that's diaz@lythampartners.com. We thank you for your time, and hope you can make it a great day. Thanks again, David.
Thank you, Joe.