Vertical Aerospace (NYSE: EVTL) has successfully completed Phase 3 piloted wingborne flight testing for its VX4 prototype and is now preparing for final transition testing. This milestone moves the company closer to its 2028 type certification goal, although immediate market reaction for the stock was muted.

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Vertical Aerospace [NYSE: EVTL] announced the successful completion of Phase 3 piloted wingborne flight testing of its VX4 electric vertical takeoff and landing (eVTOL) prototype. This development marks a significant engineering milestone, propelling the company into its final transition testing phase as it continues its pursuit of type certification by 2028.

The Event in Detail

During the recently concluded Phase 3 testing, the VX4 prototype demonstrated stable and efficient wingborne flight, covering a distance of 250 miles (400 km). The aircraft achieved a top speed of 120 knots (222 km/h) and reached altitudes of 2,000 feet. These tests involved Chief Test Pilot Simon Davies and Test Pilot Paul Stone, who conducted flights switching between direct manual control and computer-assisted modes. The company rigorously collected over 22 billion data points throughout this phase, which will be instrumental in validating the aircraft's aerodynamic models, acoustic levels, and overall system performance.

Vertical Aerospace is now advancing to the final test stage: transition testing. This crucial phase will prove the VX4's ability to seamlessly shift between vertical lift (helicopter mode) and wingborne flight (airplane mode), a defining capability for its intended commercial operations from rooftops, vertiports, and heliports. The company aims to complete this phase by the end of 2025, working in close collaboration with the UK Civil Aviation Authority (CAA) and the European Union Aviation Safety Agency (EASA) towards a targeted type certification in 2028.

Analysis of Market Reaction

Despite the positive technical progress, the immediate market reaction to the announcement was somewhat subdued, with Vertical Aerospace's stock experiencing a slight decline. This tempered response suggests that while investors acknowledge the developmental milestone, they may be awaiting more definitive progress towards commercialization and the ultimate goal of regulatory certification. The stock has experienced significant volatility, with a year-to-date decline exceeding 60%. The company's current valuation stands between $449 million and $479 million. Despite this, InvestingPro analysis indicates that the company is currently undervalued, with several analysts setting median price targets nearly double the current trading price.

Broader Context and Implications

The eVTOL industry continues to face skepticism due to the inherent challenges of achieving commercial certification and establishing large-scale operations. Vertical Aerospace's strategy is centered on an Original Equipment Manufacturer (OEM) business model, aiming for low operating costs and efficient manufacturing processes. To support its certification timeline and early production goals, the company has secured initial manufacturing facilities. This includes an aircraft assembly site at Cotswold Airport, capable of producing over 25 VX4 aircraft annually, and a new 30,000-square-foot battery production facility in Avonmouth, which triples its existing battery production capacity.

Vertical Aerospace has also updated its financial targets, projecting at least 175 aircraft deliveries cumulatively by 2030, an increase from its previous guidance of 150. The manufacturing run-rate target for Q4 2030 has been raised to over 225 units annually, with plans to scale to 900 aircraft deliveries annually by 2035. The company estimates it will require $700 million in funding to reach its 2028 certification milestone. As of mid-2025, Vertical Aerospace held approximately £104 million ($137 million) in cash and cash equivalents, providing a projected cash runway into mid-2026. The company forecasts positive operating cash flow exceeding $100 million in 2030, a revision from prior breakeven guidance, and anticipates a consolidated gross margin of 20% in 2030, rising to approximately 40% by 2035. The VX4 has garnered approximately 1,500 pre-orders from major customers, including American Airlines, Japan Airlines, GOL, and Bristow.

Expert Commentary

Industry leaders and analysts have weighed in on Vertical Aerospace's trajectory:

"Each phase strengthens confidence among regulators, partners, and investors that our aircraft will meet the highest standards of safety and performance." — Stuart Simpson, CEO of Vertical Aerospace.

The company has also bolstered its regulatory expertise with the appointment of Patrick Ky, former Executive Director of EASA, to its Board of Directors, effective September 1, 2025. Ky was instrumental in developing the world's first comprehensive regulatory framework for eVTOL aircraft during his tenure at EASA.

"Having worked closely with industry and regulators worldwide on developing the standards for this new generation of aircraft, I believe Vertical is uniquely positioned to lead the sector through certification and into safe, sustainable commercial operations." — Patrick Ky.

Domhnal Slattery, Chairman of Vertical Aerospace, emphasized Ky's value, describing him as "one of the most respected voices in aviation regulation and safety worldwide" whose expertise will be "invaluable" to the company's certification program. Analysts have largely maintained a positive outlook, with Canaccord Genuity reiterating a "Buy" rating and an $11.00 price target. D. Boral Capital initiated coverage with a "Buy" rating and a $15.00 price target, while Needham also initiated with a "Buy" rating and a $9.00 price target.

Looking Ahead

Vertical Aerospace remains focused on completing its transition flight testing by the end of 2025 and commencing hybrid-electric flight testing in 2026. The company's target of type certification in 2028 hinges on securing the necessary $700 million in funding and successfully navigating the collaborative regulatory processes with the UK Civil Aviation Authority and EASA. Key events to watch include the outcome of the transition testing, further updates at its Capital Markets Day, and the next earnings report scheduled for November 7, 2025. The successful execution of these milestones will be critical for Vertical Aerospace to solidify its position in the emerging electric aviation sector and move towards commercial operations.