London, May 8, 2026, 17:10 BST
Rolls-Royce Holdings plc will begin field tests of a hybrid drive system for mining haul trucks from autumn 2026, pushing its Power Systems arm deeper into lower-emission industrial power as investors watch whether growth outside civil aerospace can support the stock’s sharp multi-year run. The system combines mtu Series 4000 engines with an electric drivetrain and could cut fuel use and carbon dioxide emissions by as much as 30%, depending on mine layout and operating conditions, the company said.
The timing matters. Rolls-Royce is trying to show that its turnaround is not just a story about widebody aircraft engines, where it earns money from engine flying hours, or EFH — the time its installed engines spend in service. Its latest trading update said Power Systems order intake across gas and diesel engines was about 50% higher in the first quarter than a year earlier, led by demand from data centres and government customers, with the unit’s order backlog at £7.3 billion at the end of March.
The mining project also lands just after Rolls-Royce said it had completed three new single-cylinder test benches at Friedrichshafen, Germany, a “tens of millions of euros” investment aimed at faster work on diesel and alternative-fuel engines. Martin Urban, executive vice president engineering at Rolls-Royce Power Systems, said the test benches laid “the groundwork for the reliable development” of future propulsion technologies. Rolls-Royce
Cobus van Schalkwyk, vice president global mining at Rolls-Royce Power Systems, said the company was responding to miners’ push to operate “more efficiently and sustainably.” The hybrid system stores braking energy in batteries on downhill journeys and uses it to power wheel motors uphill, reducing the load on the diesel engine, Rolls-Royce said. mtu Solutions
Shares in Rolls-Royce were last shown at 1,218.26 pence on Friday, down 3.24% on the day, after a volatile week in which they rose 6.42% on Wednesday and slipped 1.58% on Thursday, market data showed. The move still left the stock well above its pre-AGM level, but below the 1,329.40p high touched on May 6.
The company has kept its 2026 guidance unchanged at £4.0 billion to £4.2 billion of underlying operating profit and £3.6 billion to £3.8 billion of free cash flow, saying it expects to mitigate the current financial impact from Middle East-related disruption. Chief Executive Tufan Erginbilgic said in the AGM update that Rolls-Royce had made a “strong start to the year” across its three divisions. Rolls-Royce
Reuters reported last week that Rolls-Royce engines power Airbus A350 and Boeing 787 widebody jets, and that airlines using those aircraft had faced disruption after the Iran war began in late February. The company told investors large engine flying hours rose 5% in the first quarter to 115% of 2019 levels, a key metric because many Rolls-Royce service contracts are tied to engine use.
The competitive picture is tightening. Caterpillar markets electric-drive mining trucks for lower costs and productivity gains, Komatsu says it is pushing electric drive technology and autonomous operation in mining trucks, and Cummins offers mining engines and power systems while moving further into industrial hybrids. Those rivals frame the risk for Rolls-Royce: field trials are not orders, and miners have several routes to cut diesel use.
Large miners are already testing alternatives. BHP and Rio Tinto started trials of Caterpillar electric haul trucks at an Australian iron ore mine in December to assess whether battery-electric technology can cut diesel use and greenhouse gas emissions at scale.
A regulatory filing on Friday showed small share purchases by Chief Financial Officer Helen McCabe and non-executive directors Birgit Behrendt and Wendy Mars under share purchase plans. The purchases were modest, but the filing came as the company continues a much larger capital return plan, including a £2.5 billion 2026 buyback tranche that it said was more than £750 million complete as of April 30.
Analyst consensus compiled by Rolls-Royce from 12 submissions in April points to FY 2026 underlying EBIT of £4.13 billion and free cash flow of £3.73 billion, broadly in line with management’s range. For now, the mining hybrid and German test-bench investment are smaller than the aerospace story, but they sharpen the question investors are asking: how much of Rolls-Royce’s next leg can come from power systems, defence and new markets rather than more flying hours alone.
