Hanwha Aviation announced on Monday that it has reached an agreement to terminate a component supply contract for urban air mobility (UAM) parts with the UK-based Vertical Aerospace, valued at a total of 454.8 billion Korean won (equivalent to $318 million).

The two companies signed separate contracts in 2022 and 2023, under which Hanwha Aviation was to supply components for Vertical Aerospace's VX4 electric vertical takeoff and landing (eVTOL) aircraft. The London-based firm originally planned to launch and commercialize this four-seat air taxi by 2025, but the project timeline has experienced delays.

In its public filing, Hanwha Aviation stated: "Since signing the contract, we have faithfully fulfilled all contractual obligations. However, given changes in the market environment and the project's development direction diverging from the initial commercial goals, both parties have agreed through strategic consideration to terminate the contract."

Hanwha Aviation also disclosed that the two companies have separately signed a memorandum of understanding to maintain their ongoing cooperative relationship.