The U.S. Army has awarded Elroy Air a $46,058,871 firm-fixed-price Phase III Small Business Innovation Research contract to advance its autonomous, hybrid-electric Chaparral vertical take-off and landing (VTOL) cargo aircraft. The award was posted in the Department of Defense's August 17, 2026 daily contracts release; work will be performed at Elroy Air's South San Francisco headquarters with an estimated completion date of February 18, 2029.
Chaparral built for contested logistics
Chaparral carries more than 500 pounds of cargo up to 450 miles on interchangeable pods, has no runway requirement, and uses a hybrid powertrain that eliminates the need for charging infrastructure at the point of use. The Phase III scope covers a Group IV unmanned aircraft system (Pentagon classification for platforms above 1,320 pounds) and adds an expeditionary mobile mission planner, cyber-protected communication links, GPS-denied navigation and greater onboard autonomy for austere and contested environments — the operating profile the DoD has flagged as its top logistics gap.
Building on a growing Army relationship
The award follows a string of Army agreements over the past two years, including three demonstrated unattended delivery modes (precision airdrop from hover, precision airdrop in forward flight, and autonomous ground drop-off after landing) and a T-REX 2026 field exercise appearance. CEO Andrew Clare said the contract "reinforces the critical role that heavy-lift autonomous hybrid VTOL drones will play in modern defense operations." Elroy Air said it will begin U.S. manufacturing of Chaparral later this year through an exclusive domestic partnership with Kratos Defense & Security Solutions.
Market context
The Chaparral SBIR sits alongside a broader Army push into autonomous resupply. Contested logistics has become a top procurement theme in 2026, as we reported in the Army SRR small-drone fly-off and Elroy Air's own $1 billion Columbus Circle SPAC agreement. While the Army money underwrites near-term development, the company is still positioning Chaparral for commercial logistics, disaster response and wildfire support — markets where long-range autonomous cargo delivery is finally becoming viable.
Reporting based on coverage from DroneDJ, Defence Blog and the U.S. Department of Defense contracts announcement.