SAN DIEGO, CA – September 25, 2025 – Kratos Defense & Security Solutions, Inc. (Nasdaq: KTOS) has been selected by Elroy Air as the exclusive U.S. manufacturing partner for its Chaparral hybrid-electric autonomous vertical takeoff-and-landing (VTOL) cargo drone. This five-year strategic agreement aims to significantly accelerate the production of the Chaparral, with initial units expected in 2026 and a rapid transition to high-volume manufacturing.
The partnership leverages Kratos’ extensive experience in producing unmanned aerial systems (UAS) for defense, positioning the company to meet the growing demand for Elroy Air’s innovative cargo drone in both military resupply and commercial logistics markets.
Kratos’ Role in Accelerating Chaparral Production
Under the terms of the five-year exclusive manufacturing agreement, Kratos will be responsible for the U.S. production of the Chaparral. Production will initially commence at Kratos’ facility in Sacramento, California, before transitioning to high-rate manufacturing at their facilities in Oklahoma City. This move is expected to bring new aerospace jobs to both regions and expand the existing supply chain infrastructure across the nation.
Elroy Air CEO Andrew Clare emphasized Kratos’ proven track record in manufacturing military UAS, stating that their established production capabilities and supply chain make them an ideal partner to scale Chaparral production to meet customer demand. Dave Merrill, Elroy Air’s Founder and Executive Chairman, highlighted Kratos’ ability to produce large, composite drones in high volumes as a key factor in the selection, noting the eagerness of customers to expand their operations with the Chaparral system.
Understanding the Elroy Air Chaparral VTOL Cargo Drone
The Elroy Air Chaparral is a cutting-edge hybrid-electric autonomous VTOL cargo drone designed to transport up to 300 pounds of cargo over distances exceeding 300 miles. Its unique hybrid-electric powertrain enables rapid refueling and provides additional power for recharging batteries and powering payloads during cruise flight, offering a longer range compared to similar-sized battery-electric aircraft.
Key Features and Capabilities
- Autonomous Operation: The Chaparral is engineered for autonomous cargo pickup and drop-off, making it ideal for middle-mile logistics, military resupply, and disaster relief operations.
- VTOL Design: Its vertical takeoff and landing capability eliminates the need for traditional runways, allowing for operations in remote or challenging environments.
- Hybrid-Electric Powertrain: This advanced propulsion system contributes to the drone’s extended range and rapid turnaround times.
- Cargo Pod System: The Chaparral utilizes a unique pod system that can be preloaded with up to 300 pounds of cargo, which the VTOL then autonomously picks up and deposits without human intervention.
Strategic Importance and Market Impact
This partnership is seen as a significant move for both companies. For Elroy Air, it provides a clear path to high-volume production, crucial for fulfilling its substantial backlog of orders, which currently stands at 1,500 units. Confirmed customers for the Chaparral include FedEx, Bristow Group, and aircraft lessor LCI, indicating strong market interest across commercial and defense sectors.
For Kratos, the agreement diversifies its product portfolio beyond its core jet-powered military drones into the burgeoning hybrid-electric VTOL segment. This strategic expansion leverages Kratos’ existing manufacturing infrastructure and expertise in composite unmanned aircraft, potentially opening new customer channels in logistics, disaster relief, and commercial express delivery markets. Steve Fendley, President of Kratos Unmanned Systems Division, expressed enthusiasm for the partnership, highlighting Elroy Air’s growing market opportunity and Kratos’ suitability to transition the system to production.
Looking Ahead: Production Timeline and Future Growth
The first production Chaparral aircraft are slated for manufacturing in 2026. While initial production will be in Sacramento, the transition to Oklahoma City for high-rate manufacturing signifies Kratos’ commitment to scaling production efficiently. This move builds upon Kratos’ recent expansions, including a new advanced manufacturing facility in Bristow, Oklahoma, focused on turbojet engine production, demonstrating a broader strategy to enhance its production capabilities for various aerospace components.
Both Kratos and Elroy Air will showcase their unmanned aircraft systems at the upcoming Miramar Air Show from September 26-28 in San Diego, California, offering a public glimpse into the future of autonomous cargo delivery. This collaboration underscores the increasing demand for advanced autonomous aerial systems and the strategic partnerships forming to meet these evolving market needs.
