Urban Air Mobility: Innovation takes time and burns money Jan/Feb 2025

2025 could see these battery-powered helicopters enter commercial service.

Front-runners

US start-ups Joby and Archer Aviation — who between them have raised funds of $6bn for development — both received part 135 certification from the FAA for their respective eVTOL models last year, and continue the lengthy process to obtain full type certification to allow them to provide commercial services in the US — each targeting 2025 or 2026.

Archer’s aircraft has room for one pilot and four passengers (maximum payload 0.5t) has twelve electrically powered propellers (six of which tilt for vertical lift), a maximum speed of 240kph and a 100km range.

In February, Archer announced that it had signed up Abu Dhabi Aviation (ADA) as its first Launch Edition Program partner. This programme will allow Archer to deploy its Midnight aircraft in early adopter markets worldwide to generate revenue.

Archer’s Founder and CEO, Adam Goldstein in the recent 2024 results call said: “These early adopters are more than just customers. They are true partners... These partnerships will have two components. First, we will supply them with a small fleet of Launch Edition aircraft to showcase and operate in their countries over the next 18 to 24 months as well as a services component where we will provide an operational support team of pilots, technicians, engineers and local leadership. These arrangements will be tailored, based on the partner and their strategic goals, but we are aiming for each one to generate tens of millions of revenue and be margin positive.”

It needs the revenue — it is burning through $100m a quarter in development spending. In February it raised an additional $300m equity funding, giving it cash reserves of over $1bn.

Joby’s aircraft has a similar capacity: one pilot and four passengers. It has a slightly longer range of 160km and is faster with a speed of up to 320kph. There are six battery powered tilting propellers.

Joby, plans to build and operate its aircraft as an airborne taxi service provider. It is in the process of developing the first vertiport in its planned network — at Dubai Airport in partnership with Dubai Roads and Transport Authority and Skyports. By the middle of this year, it plans to deliver the first aircraft to Dubai and begin in-market testing with the intention of carrying their first passengers in the Emirate in late 2025 or early 2026. It too burned through $450m in 2024, but after raising an additional $350m finding ended the year with just short of $1bn in cash. It is anticipating $550m of this to fly out the door in the current year.

Failures

The two German hopefuls in the sector, Lilium and Volocopter, went insolvent at the end of 2024.

Volocopter (founded in 2011) had only raised a modest $725m in funding, and pursued what it proudly called the lowest cash burn rate in the industry. Despite achieving design organisation approval from EASA, it nevertheless ran out of cash before it could bring its aircraft to certification. The company blamed an “unfavourable financial climate and delayed funding rounds”. It could also had been something to do with the aircraft design: one pilot, one passenger a range of less than 65km and speed of 110kph.

Lilium’s journey was even more disastrous. The Munich-based firm, founded in 2015, filed for insolvency last October after failing to secure a €50m loan guarantee from the German government. This filing triggered the insolvency of its subsidiaries which had raised $1.4bn from private investors. A rescue deal was agreed in December 2024 with a consortium called the Mobile Uplift Corporation to provide $200m to acquire all Lilium’s assets in Germany, but the money never arrived and Lilium filed for (this time terminal) insolvency a second time in February.

The Lilium Jet would have been interesting: one pilot, six passengers; a range of upto 300km and max speed of 300kph; a fixed wing design with canard wings, and 36 vectored thrust fans for propulsion.

A close thing

UK-based Vertical Aerospace (founded in 2016) was close to insolvency in 2024 as its cash reserves dwindled to £25m. In November it received a lifeline of $50m from vulture fund Mudrick Capital (its largest creditor), and then in January successfully raised $90m (increased from the initial $75m target) in equity and warrants with a further $25m injection from Mudruck and over $60m from new investors. The warrants if exercised would provide another $100m. This accompanied an investment agreement that included the conversion of $130m debt to equity. The company also recently announced if had appointed aviation industry veteran Dómhnal Slattery as chairman.

Vertical is some way behind rivals Archer and Joby. It has raised barely a quarter of the funds the US companies have done, and it is targeting achieving type certification in 2028. But it does have 1,500 orders.

The company’s VX4 design comprises a capacity of one pilot, four passengers (450kg payload); a top speed of 240kph and range of 160km. Propulsion is provided by eight battery-powered propellers on a high wing: the four on the leading edge tilting; those on the rear permanently vertical and only used for take-off and landing.

Others

• Eve Air Mobility (founded 2020) is majority owned by Embraer and arose from the Brazilian manufacturer’s innovation division. In this it is strongly helped by the parent company’s expertise in bringing aircraft into service. This may explain why it has only raised $554m in funding. The production aircraft (Eve) again has capacity of one pilot (with a future aim of autonomous flying) and four passengers; a cruising speed of 200kph and range of 100km. Unlike its competitors, Eve has concentrated on simplicity: it has eight propellers for lift and two pusher propellers (none of these tilt); but it also has helicopter-like skids, rather than its rivals who have gone for tricycle landing gear. But it does have 2,900 orders under its belt. Certification is anticipated in 2026.
• Beta (founded 2017) is an outlier: it remains a private company, despite having raised a reputed $1.4bn. Its Alia 250 aircraft is designed to carry four passengers with one pilot; a range of 450km at a max speed of 270kph. Like Embraer’s Eve it has gone for a fixed propulsion system: four dedicated VTOL propellers and one push propeller. The company seems to be focusing on a cargo version (also targeting medevac organ transport) perhaps as a simpler way to certification, aimed for 2025. The company is also planning a battery-powered conventional take-off aircraft (dubbed the CX300) using the same airframe. It has 559 aircraft on its order book (including 150 from UPS).

• EHang (founded 2014) was the first eVTOL producer to receive certification for one of its aircraft in 2023 from the CAAC. The Guangzhou based company has produced an autonomous model EH216-S with a capacity of two passengers (no pilot), a 220kg payload, a range of less than 35km and a max speed of 100km. Propulsion is provided by 16 propellers fitted to eight under fuselage arms.

  It boasts orders of 1,300 units, but may struggle to gain international certification because of the lack of a pilot. However, it is reputed to be expected to be on sale at around $40,000 a unit (compared with the expected $4-$5m for its competitors’ offerings).

  In January it completed an inaugural demonstration flight in downtown Shanghai, and has launched regular trials of eVTOL sightseeing flights from Longhua airport.

• Blade Urban Air Mobility 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, and has recently expanded its efforts into the medevac services transporting organs for transplant. 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 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. It expects to be able to report positive operating earnings some time in 2025.
• Wisk (founded in 2019) was a joint venture between Boeing and Google founder Larry Page’s Kitty Hawk Corp. Boeing took full control in 2023. The company is developing Wisk Gen 6 with a capacity of four passengers (no pilot); a range of 140km and top speed of 190kph; propulsion provided by 12 battery powered propellers, (six tilting and six fixed). Since the absorption as a subsidiary, news flow has been muted (but Boeing has had other problems to hand). Because it is designed as a pilotless vehicle, the company expects certification to be a very lengthy process and it is unlikely to enter service before the end of the decade.
• Zuri (founded 2017) is a Czech company developing a hybrid-electric VTOL passenger and cargo aircraft. Again targeting a four passenger seating capacity (with one pilot) it is unusual in proposing a 700km range and a cruise speed of up to 350kph. Propulsion involves eight tilting propellers mounted on a high wing and v-shaped tailplane. To get the range, there is a turbine to provide electricity during flight and to charge battery packs. It has apparently only raised $6m in funding so far — which seems a bit under the odds — founder Michal Illich states it has the advantage of being based in a country with very low employment costs. The company is years away from certification. Illich asserts: “It’s too late to start now — it takes too long. We’ve been at this for seven years and are only halfway there.”

Tesla meets Uber in 3D

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. They 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.

The sector was given a psychological boost in November when the FAA introduced a Special Federal Aviation Regulation (SFAR) to establish requirements for the safe, efficient integration of eVTOL aircraft into the USA’s aviation system. It had to do this because the eVTOLs represent the first really new category of aircraft in 80 years.

A new pilot-training and qualifications rule was needed because existing regulations did not address eVTOLs, which can take off and land vertically like a helicopter and fly like an airplane during cruise flight. The rule provides a comprehensive framework for certifying the initial cadre of powered-lift instructors and pilots.

The SFAR went into effect on 21 January. And then in March the FAA backtracked announcing the temporary suspension of the application of the new rule to allow the provisions to be reviewed by the Donald Trump administration.

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).

A comparison of the eVTOL business models 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. And its drivers do not need (or have to pay for) the infrastructure. Owning a $3m aircraft, which needs power to fight gravity, to operate a taxi service at a cost competitive with a road car may be like buying an electric Rolls-Royce Spectre for $500,000 and accepting rides for the same price as an Uber.

The business model is yet to be proven.