eVTOLs:
Upwardly Urban Mobility Jan/Feb 2022

The are obvious attractions for living in cities — but as their populations grow, congestion and travel times increase. The cities themselves introduce measures to limit or curtail private ground transport through taxation, parking and access charges — exacerbated by the increasing need to cut fossil-fuel usage.

The concept of Urban Air Mobility (UAM) is not new, and has featured in many science fiction films from Metropolis of 1927 to the iconic 1982 Blade Runner. But the technology we’ve had since the 1950s (the helicopter) is noisy, expensive and pollutive. A realistic replacement would not only (probably) have to have vertical take-off and landing capability, but be quiet and environmentally sustainable.

The technological changes in battery design since the late 2010s have been dramatic — in part fuelled by the automotive industry’s pursuit of the development of electric cars. The prospect of electricity powered personal regional aircraft — spurred on by NASA’s Advanced Air Mobility (AAM) program and EASA’s embracing of the concept — is becoming an increasing reality.

What is coming to the fore is a race to find a first-mover advantage in creating a winning electric vertical take-off and landing passenger aircraft (eVTOL). The Vertical Flight Society (originally founded as the American Helicopter Society in 1943) has been tracking eVTOL programmes in its World eVTOL Directory. The number of designs has rocketed from six in 2017 to 600 from nearly 350 companies worldwide at the beginning of 2022 (see chart). Director Mike Hirschberg states that “since some innovative designs that seemed implausible at the time continued maturing into plausible approaches, we decided to catalogue every known design — from the silly to the serious”.

Source: VFS.
Note: number of eVTOL design programmes -- "from the silly to the serious"

(Presumably not included in the directory, as being neither vertical takeoff nor electric despite being silly, is the AirCar — a two-seater road car with foldaway wings powered by a 1.6-litre BMW engine — which received its Certificate of Airworthiness from the Slovak Transport Authority in January.)

VFS estimates that $4.5bn had been pumped into the sector between 2010 and 2020; and then last year there was an explosion of interest, partly reflecting the stock market flotations of a handful budding developers as well sizeable private investments, bringing the total to over $10bn.

Sources: Financial Times, Mckinsey.
Notes: AAM=Advanced Air Mobility; FAM=Future Air Mobility

The chart (using data from the Financial Times referencing a McKinsey report) exemplifies the wall of investment money attracted to this burgeoning sector over the last decade. And the figures suggest that in 2021 piloted eVTOLs received an additional $5bn, and the more futuristic and autonomous programmes $2bn in funding.

Plethora of designs;

Multiple business models

The designs vary. Many are “multicopters” — multiple open rotors to provide the lift (and allow for redundancy). Some have wings. One involves an electric ducted fan jet engine (actually 32 of them). Most are fully electric. All are perforce small (batteries are heavy), providing a seating capacity of 2-6 passengers and very short range (100-300km). There may be room for a pilot, at least initially, while some are aiming for fully autonomous operations from launch.

The business models also vary from the traditional OEM selling manufactured product, to building equipment to provide in-house managed ride-sharing operations, or anything in-between. They all face the hurdles of equipment certification and lack of appropriate infrastructure: existing heliports are not equipped to deal with the power requirements for battery recharging, and there has been a parallel explosion in interest to develop networks of “vertiports” in appropriate urban settings.

The sector is extremely fashionable, with the major aircraft manufacturers are in on the scene, but it is hard to identify a winning business model.

Boeing

Boeing is developing Wisk in a joint venture with US eVTOL developer Kitty Hawk. It is an autonomous winged aircraft with 12 independent rotors for lift and one propeller for flight, a range of 40 km, maximum speed of 160kph, and a capacity of 2 passengers (no pilot). “Autonomy has to be done from the very beginning,” said Marc Allen, Boeing’s chief strategy officer. “The extra time that will take to certify is the trade-off.”

Wisk plans to operate its own aircraft. In May last year the company announced an agreement with Blade Urban Air Mobility to operate 30 aircraft on short-distance routes on Blade’s network at hourly chartered rates.

Blade Urban Air Mobility

Blade is not an eVTOL developer, but is rather seeking first mover status as an UAM provider. It is currently focused on providing time efficient transportation (ie helicopters) on congested routes primarily in Northeast US. It also has an associate business in Western India.

The company operates an asset-light model, and does not own any aircraft. Blade partners with third-party operators to arrange flights for its customers.

Blade expects transition to eVTOL by 2025 — it has partnerships nominally in place with both Wisk and Eve — initially to operate on existing routes and targeting to add 5-10 new markets per year from 2027.

Blade has identified JFK-Manhattan, the Northeast and West Coast markets as short-to-medium-term opportunities, and is targeting 1m passengers by 2024.

Airbus

Airbus has been exploring new technology including battery capacity, autonomous flying and electric propulsion since 2014. The company has developed two demonstrator aircraft “Vahana” and “CityAirbus” and completed more than 100 test flights on both demonstrator aircraft. In September 2021, the company revealed another eVTOL “CityAirbus NextGen". This concept has a fixed wing, V-shaped tail, eight electric-powered powered propellers as part of what it calls its "uniquely designed distributed propulsion system”. It will have four seats, and initially designed to be piloted. Currently the aircraft is in detailed design phase, and Airbus is targeting the first test flight in 2023 and certification by 2025.

Embraer

Embraer set up a separate company “Eve” to accelerate the development of eVTOLs. It is currently working on a piloted winged aircraft with capacity for four passengers and a 100km range. Certification and commercial launch is targeted for 2025/26. (It expects to have a six-passenger autonomous aircraft ready by 2030).

The aircraft will be powered by eight counter-rotating electric propellers for vertical lift and two ducted propellers for forward thrust. Eve states that it has signed MOUs and LOIs with six airlines (including 100 pre-orders for SkyWest and 200 for Republic) and eight helicopter operators (including 100 each from Avantto and Bristow). It claims a total (non-binding) order pipeline of $5.2bn covering 1,735 vehicles. It says it will not own aircraft, but will instead “establish joint operations and grow partner-by-partner”. Whatever that means, it too has a partnership with Blade. Eve is currently in the process of getting a NYSE quote through a deal with special purpose acquisition company Zanite Acquisition Corp providing $500m in cash and an enterprise value of $2.4bn.

EHang

Guangzhou-based EHang was the first publicly traded UAM company, having listed on Nasdaq in December 2019. Its two-seater autonomous aircraft, the EHang 216, has a nominal range of 35km, powered by eight open rotors, and a cruise speed of 100kph. Early in 2020 the 216 was granted a commercial pilot operation approval for logistics flights (effective payload 100kg).

At the 2021 Zhuhai Air Show the company unveiled the concept of a new aircraft targeting a 300km range. The winged VT-30 features eight lifting propellers distributed across two booms for vertical take-offs and landings, and a pusher propeller at the rear of the fuselage for cruise flight.It still only has two seats.

EHang in its presentation material features some pretty futuristic concepts of dedicated vertiports — fully automated landing pads, automated battery recharging and/or replacement and parking, 30m above ground level in a baobab shaped structure. Its business model is not clear.

Archer

Archer started trading on NYSE in September 2021 following the reverse takeover of SPAC Atlas Crest Investment. The company executives include former employees of Wisk, Airbus, Mazda and Tesla. Its two-seater winged aircraft features a design range of 60km and a top speed of 150kph. It is powered by twelve rotors: six stationary twin-bladed propellers to provide lift and six tilting five-bladed propellers for cruise.

Early in 2021 Wisk took legal action against Archer, claiming Archer had stolen its aircraft design and other trade secrets after hiring former Wisk employees. Wisk’s motion for a preliminary injunction against Archer was dismissed; Archer countersued for $1bn damages for defamation. The trial is scheduled for January 2023.

Archer’s business model is to operate aerial ride sharing along with aircraft OEM business. The company received a USD1bn order from United for 200 aircraft and has an agreement with Stellantis for large volume production from 2026. It is planning to work with REEF for urban takeoff and landing sites, by using REEF’s network of 4,800 parking locations covering a large portion of US urban population.

Archer is working on a piloted winged aircraft with a capacity for four passengers, a 96 km range and top speed of 240kph. It is expecting commercial launch in 2024.

Joby Aviation

Joby Aviation went public in August 2021 following a business combination with SPAC Reinvent Technology Partners. Joby’s staff includes former employees of Tesla, JetBlue, Uber and Ford. The company business model is to operate aerial ride sharing, with a focus on congested metros with the help of an in-house mobile app or partner app. For landing/take-off, it also is working with REEF to use its parking lots, and also with Signature aviation, Related and Macquarie. In December 2020, Joby bought Uber Elevate, which was Uber’s planned eVTOL business. In February it announced a partnership with ANA to bring UAM to Japan.

Joby is working also working on piloted winged aircraft with capacity for four passengers. Powered by six tilting rotors it is targeting a 240 km range and top speed of 320 kmh, and is also expecting commercial launch in 2024.

Its modest mission is to “save a billion people an hour a day”.

Lilium

Lilium went public in September 2021 following a business combination with SPAC Qell Acquisition. Lilium management has Airbus, Rolls Royce, and Goldman Sachs experience. It is working on two business lines, aerial ride sharing and turnkey enterprise sales to corporates and governments. The company plans to operate a vertiport network with Ferrovial in Florida, and partnered with multiple German airports including Düsseldorf, Munich and Köln to establish a network in Germany.

The company is targeting 400 units in house per year from 2023 and global production from 2026 with the help of a 3rd party manufacturer.

Lilium’s business model is based on larger aircraft flying longer distances than the other eVTOL operators. Lilium’s aircraft is also powered by 32 individual small jet engines, in contrast to the peers’ propeller aircraft. It is working on a 7 seater (6+1) winged aircraft with 250 km range and top speed of 280 kmh, and expecting commercial launch in 2024. Lilium has an aircraft order for 220 aircraft from Brazil’s Azul.

Vertical Aerospace

Vertical Aerospace went public through a SPAC reverse takeover by Broadstone Acquisition in December 2021. Key management includes former employees of Airbus, Rolls Royce, Dyson and Lilium. The company will operate as an OEM, and has no commitment towards aerial ridesharing, a divergence from other companies. American Airlines, Virgin Atlantic and aircraft lessor Avolon are among the customers who have placed indicative orders for 1,350 aircraft. According to the company, Avolon has agreements to place its aircraft with Gol and Japan Airlines.

Vertical Aerospace is working on a piloted winged aircraft with capacity for four passengers, a 160 km range and top speed of 325 kph, and is expecting commercial launch in 2024.

Volocopter

Volocopter is based in Germany and, as yet, unlisted. Its management team has experience from Airbus, Daimler and Siemens. Volocopter expects to launch revenue service with its short range two-seat multicoptor VoloCity air taxi in 2023, one year ahead of peers, focusing on urban single passenger services. It targets Singapore and Paris as its first two cities. It does not plan to sell its aircraft to third parties, but will operate its own rideshare business.

In addition to the VoloCity, it plans to develop a longer range VoloConnect winged aircraft with room for up to four passengers (powered by eight rotors for lift and two to push for cruise).

The company is targeting to produce around 100 units in house per year from 2023 and global production of 1,000 aircraft from 2025.

High Tech meets Aviation

Electric vertical takeoff and landing air taxis could offer a green solution to congested ground transport in densely populated areas: emission free, quiet, (hopefully) safe and fast air transport. As HSBC’s Andrew Lobbenberg has put it in a recent report on the eVTOL sector: eVTOL might deliver the electrification revolution that Tesla brought to the automobile, combined with the ride sharing transformation from Uber while escaping the congestion of two dimensions — Tesla meets Uber in 3D.

The eVTOL participants that have come to the markets have made very similar investor presentations. They each show that their design is the best. They each compare their market rating favourably with their competitors. They each try to show that their aircraft will be able to operate ride-sharing trips at costs comparable, or better than existing premium ground transportation (and especially Uber). In traditional Silicon Valley fashion, they don’t expect to make money for years to come.

But aviation presents its own specific barriers, and dissenters to the enthusiasm in eVTOL development have raised serious concerns of viability.

• Air-worthiness certification is an expensive and lengthy process. All bar Wisk are aiming to achieve this initially with piloted models — meaning that their designs could almost go through the process at the FAA and EASA as (sort-of) “traditional” aircraft. Autonomous certification, with requirements for unassailable cyber security may be more difficult. But the models only show competitive costs once the pilot is removed.
• Continued battery design development will be necessary. This will not be a mass-market, and eVTOL producers will come well down the line of demand behind motor manufacturers.
• Design range will be limited by requirements for fuel reserves (30-45 minutes for traditional fixed wing and 20-30 minutes for helicopters depending on flight rules). Batteries degrade over time. (So does engine performance in traditional aircraft, but traditional engines last longer).
• Unlike ground transport ride-sharing, UAM will not be point-to-point, but will require vertiports (with some method to get the passengers to and from the aircraft). Notably, none of the eVTOL manufacturer plans mention landing charges: Blade, already operating helicopters, points out that landing charges currently account for 50% of trip costs.
• A comparison of the UAM business models (with the exception of Blade’s) for ridesharing with that of Uber is dubious. Uber is generally asset-light — a booking platform for its corpus of independent drivers with their own cars. Owning a $1-$2m aircraft, which needs power to fight gravity, and operating a taxi service at a cost competitive with a road car is as sensible as buying an electric Rolls-Royce Spectre (due 2023) for $500,000 and accepting rides for the same price as an Uber.

The enthusiasm for the newly quoted sector was extraordinary. EHang’s share price at one point had risen six fold from its initiation price. Since mid 2021, some reality entered the market and share pirces have tanked: Archer, Joby, and Lillium are down by 65-70% from their initial prices, Blade and Vertical down by 39-40%; and EHang down 90% from its peak.

Flying Magazine quotes one (anonymous) sceptical venture capitalist: “we’re a little surprised to see a space that has so much regulatory risk, go-to-market risk, and consumer behaviour risk get as much attention and capital as it has”. That’s a lot of risk even for disruptive technology, and enthusiastic investors may be chasing a bubble.