The US Federal Aviation Administration (FAA) recently proposed regulations that would cover operations of passenger electric vertical take-off and landing (eVTOL) aircraft. The regulation which is likely to come into effect from mid-2023 will provide a fillip to commercial air taxi operations which are likely to launch by 2024-2025. Autonomous eVTOL cargo drones are already in use for middle mile delivery logistics operations.
Air taxis have been identified as a next generation mobility mode that will alleviate the stresses of urban road congestion. Positioned for short haul transport, they promise faster commutes, greater convenience, reduced pressure on already choked road networks, and improved access to remote areas. In addition, since eVTOLS use electric power, they address the challenge of carbon emissions associated with passenger vehicles. According to the US Environmental Protection Agency (EPA), a typical passenger vehicle averages around 4.6 MT of carbon emissions annually. eVTOLs also align with the commercial aviation industry’s quest to reduce its carbon footprint and reach net-zero carbon emissions by 2050. The focus on regulatory initiatives and industry collaborations reflects this understanding as stakeholders move to integrate commercial drones and electric air taxi services into the urban air mobility (UAM) ecosystem.
The Buzz Grows Louder
Aviation companies, automotive firms and start-ups are all actively involved in the UAM market. While some are at the concept stage, others are conducting advanced pilot tests. Investments are pouring in from aviation companies like Delta, American, United Airlines, and Brazilian airline company, Azul. A host of exciting products are in the pipeline.
Market leader Joby Aviation, which acquired Uber Elevate in December 2020, is collaborating with Toyota on a five-seater eVTOL. Embraer has its eVTOL four-seater “Eve,” while Archer Aviation already has its first purchase order for 100 eVTOL from United Airlines. Lilium’s seven-seater eVTOL is being readied for markets in home country Germany, the US, and Brazil. Airbus is targeting intracity travel with its four-seater CityAirbus NextGen. Bell Helicopter’s passenger eVTOL named Nexus is among the contenders, while Vertical Aerospace’ VX4 has picked up 1,400 pre-orders. Besides these, several other companies are also active in the space like China’s EHang, Israel’s Urban Aeronautics, Germany’s Volocopter, Slovakia’s AeroMobil, and US’s Wisk Aero.
Realizing its potential, automakers have also been entering the nascent UAM market. They bring with them proven capabilities in electrification and manufacturing. While some have gone the inorganic route via acquisitions or investments, others have chosen to go in-house and have set up separate divisions focused on flying cars like Hyundai’s Urban Air Mobility Division.
Automotive majors Daimler and Geely have invested in Volcopter. Porsche is partnering with Boeing to develop a flying car targeting the incipient urban air taxi market. Toyota has invested upwards of $390 million in US air taxi start-up Joby Aviation, which has recently applied for air certification in Japan. At CES 2021, GM unveiled two futuristic Cadillac concepts, an electric shuttle, and an autonomous VTOL drone. Meanwhile, Hyundai’s Supernal debuted its five-seater eVTOL concept at this year’s Farnborough International Airshow, even as Hyundai allocated $1.4 billion for flying taxi development by 2025. A recent entrant into the fray has been Volkswagen with its eVTOL passenger drone Vertical Mobility (V.MO) prototype.
Our Perspective
As the UAM market matures, an ecosystem comprising value chain players and key stakeholders is taking shape. These range from aero taxi technology developers to urban mobility integrators, fleet managers, fleet operators and mobility as a service (MaaS) aggregators. Ecosystem maturity will result in eVTOLs being seamlessly integrated into a system of multimodal mobility.
Meanwhile, new modes of travel will be paralleled by novel business models such as pay per ride, corporate lease, corporate subscriptions, security services, sightseeing services, air ambulance services, and critical aid delivery. This reflects the range of applications for UAM, including personal mobility, emergency, first response, service delivery, and tourism.
While eVTOLS hold much promise, there are multiple challenges – technical, regulatory, financial, institutional, and infrastructural – in the skies ahead. In September this year, the Larry Page backed Kittyhawk exited the market. Winning public confidence is another major challenge which, much like in the case of autonomous cars, will be crucial to driving adoption. In addition, uptake will depend on the ability to make flying taxis more affordable.
Although there has been significant progress, technical hurdles related to ensuring multiple fail-safe mechanisms continue to crop up. Again, despite advances, battery limitations means that operations of passenger drones are likely to be restricted to intra-city transportation in the initial stages. Efforts like the Hyundai-Rolls Royce partnership to develop a fuel-cell electric propulsion system are a promising sign.
Infrastructural challenges relate to finding the space to build dedicated air taxi terminals. Initially, eVTOLs are expected to use airport facilities for take-off and landing. Over time, vertiports for take-off and landing – either stand alone or integrated into existing building infrastructure – could alleviate issues associated with finding land in crowded urban areas.
From a regulatory perspective, besides safety certifications and amendments to existing aviation regulations, new regulations will need to be drawn up for commercial operations of piloted as well as autonomous eVTOLs. These regulations will need to govern scenarios like beyond line-of-sight operations, transport of passengers, flight over densely populated areas, pilot licensing, and flying in inclement weather conditions, among others. Regulatory clarity and standardization will promote uptake.
Conclusion
There are currently over 200 eVTOL initiatives fast-tracking commercialization efforts. Commercial air taxi services are set for lift-off in countries like New Zealand and Singapore and cities like Dubai and São Paulo. France is already constructing the region’s first ‘vertiport’ for eVTOLs in preparation for the 2024 Paris Olympics.
Successful pilot demonstrations will strengthen the push towards multimodal mobility and boost consumer confidence. As the market matures, we will see the emergence of a defined ecosystem comprising component suppliers, maintenance and repair companies, fleet operators, and support technology providers.
Schedule your Growth Pipeline Dialog™ with the Frost & Sullivan team to form a strategy and act upon growth opportunities: https://frost.ly/60o.
