Hyundai's Supernal cut 80% of its staff. Now it's teaming with Korea Aerospace Industries

In March 2026, Hyundai's eVTOL subsidiary Supernal laid off 296 employees — roughly 80% of its workforce — across its Irvine headquarters, its Fremont facility and its flight-test site at the Mojave Air & Space Port. Flight testing had already been paused following a 2025 change in leadership. Two months later, on 12 May 2026, Supernal announced the move meant to reverse that trajectory: a memorandum of understanding with Korea Aerospace Industries (KAI) to jointly develop the programme going forward.

The arrangement splits the work along familiar lines for a Hyundai-KAI collaboration. Supernal retains the lead on aircraft design and engineering for its S-A2 eVTOL; KAI contributes its own aircraft-development expertise and defence-and-aerospace manufacturing base; and Hyundai Motor Group and KAI separately collaborate on electrified aviation powertrains. The MOU's stated scope runs wider than engineering alone, covering supply chains, certification processes and access to KAI's existing global customer network — the kind of institutional infrastructure that a software-and-automotive-heavy organisation like Hyundai doesn't have in-house for aerospace.

The $6 billion funding figure Hyundai had earlier allocated to Supernal is worth holding alongside the layoff numbers, because the two sit uneasily together: an eVTOL programme that had a multi-billion-dollar parent commitment on paper still shed the large majority of its staff within the same year. That gap is less a contradiction than a reminder of how automotive conglomerates tend to run aerospace bets — as strategic options that can be throttled sharply when leadership or market sentiment shifts, even when the headline capital commitment hasn't formally changed.

"By introducing safe and efficient Advanced Air Mobility offerings, we aim to expand the boundaries of mobility into the skies." Gang Hyun Seo, President, Hyundai Motor Group

No specific financial figures accompanied the KAI announcement, and no flight-test resumption date or S-A2 delivery timeline has been published alongside it either — a notably thinner set of commitments than the layoffs were specific about. For a programme that just lost most of its engineering headcount, a partner with existing aircraft-manufacturing capacity is a sensible way to rebuild technical depth quickly; whether it also comes with the capital Supernal needs to get flight testing moving again is the detail this MOU doesn't yet answer.

Supernal's reversal sits alongside Vertical Aerospace's own timeline reset and Volant Aerotech's fresh funding round as one more data point in a pattern worth naming plainly: outside the certification leaders, 2026 has been a year of eVTOL programmes either raising money defensively or restructuring around a partner, more often than it has been a year of aircraft quietly ticking through test cards.