US Army awards Elroy Air $46.1 million to test hybrid-electric cargo drone

The US Army has awarded Elroy Air a Phase III Small Business Innovation Research contract valued at $46.1 million to test and evaluate the company's Chaparral aircraft, an autonomous hybrid-electric vertical take-off and landing drone designed for heavy cargo delivery.

The firm-fixed-price award was made on August 17, with an initial $5.1 million obligated in fiscal year 2026 research and development funding, according to the company. It builds on two earlier Army contracts awarded over the past two years aimed at improving the aircraft's ability to operate in austere and contested settings, including upgrades to its modular payload system.

Elroy Air, based in San Francisco, said in July it had demonstrated three modes of autonomous cargo delivery using Chaparral. During a July 15 flight, the aircraft released two payloads in a single sortie, one in close-in hover and another during forward flight, without personnel present at delivery points. A separate test involved a ground delivery carried out without human intervention.

Under the new agreement, the Army plans to use Chaparral in larger test events to assess its performance in environments where the electromagnetic spectrum is contested, while the company continues refining the aircraft's payload delivery mechanisms.

Chaparral does not require a runway, according to Elroy Air, and can carry more than 500 pounds of cargo over a range of up to 450 miles. Andrew Clare, the company's chief executive, said the contract reflects the growing role heavy-lift autonomous hybrid VTOL aircraft are expected to play in defense operations, according to the company.