GE Aerospace Moves Toward Hybrid Electric Engines. The Stock Is Up.

Beta Technologies is a developer of electric aircraft and electric propulsion systems. (Courtesy GE Aerospace.)

GE Aerospace, now a top provider of jet engines, is investing to remain dominant in the future. Investors look pleased.

Thursday, the company announced a partnership and $300 million investment in Beta Technologies, a developer of electric aircraft and advanced electric propulsion systems. The pair will co-develop a hybrid electric turbogenerator for defense and civil applications.

That means planes will be going electric, or maybe hybrid electric.

There has been a lot of investment into electric vertical takeoff and landing, or eVTOL, aircraft, but those vehicles are small and designed for shorter routes such as those flown by air taxis. It will be a long, long time before batteries can compete with jet fuel.

That doesn’t mean there aren’t opportunities to invest in electric technology, as the current deal shows. Turbogenerators can be part of hybrid propulsion systems. Early applications will likely be in the defense business, where hybrid propulsion can increase the range and speed of small electric aircraft used to carry cargo, said Kyle Clark, Beta Technologies’ founder and CEO.

Turbogenerators fit nicely with “distributed propulsion,” said Darin DiTommaso, vice president of engineering at GE Aerospace Defense and Systems. Instead of an aircraft with multiple traditional engines powered with jet fuel, think of one turbogenerator supplying power to several electrically driven fans to produce the same thrust. That setup can result in reduced weight and increased efficiency.

GE Aerospace also invests in hybrid-electric technology for commercial airlines, but that technology is still likely a decade away.

Investing for the future is critical for GE Aerospace and any other technology-led industrial company. Without it, a company is even more at risk of losing market share as technology develops.

For now, GE Aerospace dominates the market for jet engines. Its equipment powers some three-quarters of all commercial flights, including engines made by CFM International, GE’s 50/50 joint venture with Safran.

Not counting projects funded by the government, GE spent about $1.3 billion on research and development in 2024, or about 3.6% of aerospace sales. That is, up from about $1 billion or 3.1% of sales in 2023.

The investment into Beta isn’t exactly R&D spending, but it does help the company prepare for what is coming.

GE Aerospace stock rose 2.3% on Thursday, closing at $282.27, while the S&P 500 and Dow Jones Industrial Average added 0.8%.

The deal might have helped, though the stock could also have gotten a lift from news that UBS upgraded shares of Airbus to Buy from Hold on Thursday. The bank cited strong demand for commercial jets stretching out beyond 2030.

Coming into Thursday trading, GE Aerospace stock was up about 65% year to date. Investors have been encouraged by the strong demand outlook for commercial aerospace and GE’s ability to improve its profit margins.

Write to Al Root at allen.root@dowjones.com