Work began on the Transition® project in the fall of 2004 by the founding team at the Massachusetts Institute of Technology. Two rounds of wind tunnel testing were complete and the business plan has taken the Runner Up prize in the MIT Sloan School of Business $100k Business Plan Competition out of 164 entrants while the founders were still directly affiliated with the Institute.

Since incorporating in May of 2006, Terrafugia has been privately held and funded. Development of the Transition® Proof-of-Concept vehicle has been underway at Terrafugia's facility outside of Boston, MA since the beginning of 2007. The Proof-of-Concept folding wing mechanism was designed and fabricated in this facility, and shown to the public at AirVenture in Oshkosh, WI in July of 2007. System design, structural analysis, and composite tooling fabrication, and vehicle construction are all progressing on schedule.

Terrafugia plans to have first flight of the Proof-of-Concept before the end of 2008. Low volume production and all necessary certifications are expected to be in place in 2009, with the first customer Transition® delivery anticipated at the end of 2009.