It’s a bird! It’s a plane! It’s an eVTOL? A primer on advanced air mobility

Introduction

The era of "flying cars" is said to be among us, sparking debate over classifications within the space. Vendors often define themselves as advanced air mobility (AAM), urban air mobility (UAM), air taxi, and electric vertical takeoff and landing (eVTOL) providers. For the purposes of this report, we will characterize them all as eVTOL providers and will not include drone providers in our analysis. Broadly, eVTOL providers are looking toward two markets: one for passenger transport (intracity or regional) and one for cargo delivery. Despite regulatory hurdles, wary public perception and infrastructure uncertainty, several vendors have emerged as companies to watch in the space, as some look to deliver their vehicles as soon as summer 2024, although regulatory requirements will likely delay that timeline.

The industry has attracted participants across the traditional aviation value chain — from original equipment manufacturers such as The Boeing Company and Airbus SE, to operators like United Airlines Holdings Inc. and Japan Airlines Co. Ltd., as well as aftermarket providers like Honeywell International Inc. Honeywell is looking to provide the avionics, propulsion and radar systems for eVTOLs; ensure simplified vehicle operations; and secure support for eVTOL data communications and exchange at the edge.

The Take

We expect that eVTOLs will have a significant impact on the cities and regions where they operate, shoring up demand for new physical and digital infrastructure to support communications and operations. As these craft come to market, close collaboration between a variety of stakeholders — including city and transit leaders, utilities, insurance providers, and IT infrastructure providers — will be imperative in a smooth path to operations.

As for physical infrastructure, eVTOLs will require hundreds of vertiports within crowded cities, as well as charger network buildout and accompanying grid load management. For now, eVTOL and AAM operators will use existing digital infrastructure like air traffic management systems, but as vehicles scale, demand on existing systems will likely increase significantly. Similar to what has happened with electric vehicle charger buildout, physical and digital infrastructure may suffer from a chicken-or-egg dilemma, where infrastructure owners and operators hesitate to invest in building the necessary infrastructure without the assurance of sufficient demand or utilization.

Context

The eVTOL market is relatively young as a whole, with most vendors beginning operations in the last decade, and eVTOLs vary in their form factor, depending on use case. The craft require much less space to take off and land than traditional aircraft, as they have vertical takeoff and landing capabilities, offering flexibility for riders and vendors in urban environments. While many eVTOL vendors have a pilot onboard, some are looking to deploy autonomous or semi-autonomous flight control systems in the future, including Wisk Aero. The wholly owned subsidiary of Boeing will not have a pilot onboard its craft, and plans to manage vehicles with a multi-vehicle supervisor on the ground, who can manage 1-10 flights. Beyond Wisk, operators of eVTOLs need at least a commercial pilot's license to fly the crafts.

Range and power: EVTOLs rely on electric propulsion systems enabled by rechargeable batteries. They require rapid charging between trips, and high-power cell discharging — namely during takeoff and landing. Battery manufacturers must balance battery efficiency, thermal management and weight. The vendors we spoke with support ranges between 10 miles and 300 miles, with air-taxi developers like Volocopter, Archer Aviation Inc. and Wisk targeting short-distance urban air mobility flights, and Lilium NV and Beta aiming to support regional air mobility with distances between 100 miles and 250 miles, roughly.

Form factor: Passenger vehicles typically accommodate one to six riders, including a pilot, while cargo vehicles are designed to transport between one and three standard pallets, including a pilot. Although form factors vary among vendors, the majority of eVTOLs are roughly the size of a light-duty truck. These aircraft typically feature fixed wings, ranging from two to four depending on the specific vehicle. In addition to fixed wings, most eVTOLs are equipped with multiple rotors driving propellers distributed across the airframe. This configuration enables effective maneuvering and hovering, and provides redundancy in case of rotor, propeller or electric engine failure. To facilitate the transition between vertical takeoff/landing and forward flight, certain eVTOLs incorporate a tilt-wing or tilt-rotor design, and others choose a "lift and cruise" design to allow the craft to move between lift when going forward and thrust during takeoff/landing.

Financial

With funding rounds into eVTOL vendors routinely cashing in hundreds of millions of dollars, there have been some significant transactions to date in the space. A few vendors remain private, but many have looked to join public markets as they share their vision for the future of air mobility. Reverse SPACs are the most common route to market for US-based eVTOL providers. South Korea's Plana has plans for an IPO in the US via SPAC in 2026, according to its website.

SPACS

In February 2021, Archer went public via a reverse merger transaction with Atlas Crest Investment Corp. The deal valued the company at $2.8 billion.

In August 2021, Joby Aviation Inc. completed a reverse merger with Reinvent Technology Partners, valued at $6.6 billion. Joby has acquired three companies, one per year in 2020-2022: Uber Elevate for aerial ridesharing, Inras for radar sensor systems, and Avionyx SA for software and hardware engineering services.

In September 2021, Lilium went public via a reverse merger with Qell Partners and others in a transaction that valued the company at $2.4 billion.

Funding

In January 2022, Boeing led a $450 million corporate round into Wisk Aero, resulting in Wisk becoming a wholly owned subsidiary of Boeing.

In March 2022, Volocopter completed a $164 million series E round. Investors included NEOM, Mercedes Benz, Geely and Gly Capital Management. The company has raised a total of $529 million in funding and is valued at $1.8 billion. Volocopter picked up glider manufacturer DG Aviation in October 2021.

Beta Technologies has raised $800 million across three rounds of funding. Fidelity, Amazon.com Inc.'s Climate Pledge Fund and TPG Capital are among investors contributing to the company's $1.4 billion post-money valuation.

Regulatory environment

The regulatory environment surrounding eVTOLs is still awash with uncertainty. The federal aviation administration (FAA) cited regulatory, communication and management issues as hurdles hindering progress to certify AAM aircraft in a June 2023 report. The form factors of many AAM craft do not fit into existing guidelines, with specific issues around the crafts' electric engines and hydrogen fuel cell systems. All in all, eVTOL providers will go through type certification, production certification, operation certification and airworthiness certification.

The FAA has a five-stage design approval process for type certification: conceptual design, requirements definition, compliance planning, implementation and post certification. The European Aviation Safety Administration (EASA) has a similar four-step design organization approval process that has different safety requirements, shoring up confusion for vendors looking to deliver craft in both markets. Certifications are roughly transferrable between markets, although EASA's safety requirements differ from those in the US.

Infrastructure impact

EVTOLs will likely have a significant impact on both physical and digital infrastructure as they make their way into cities. For the purposes of this report, we will examine the demand generated by eVTOLs on vertiports, IT infrastructure and energy infrastructure. The onus of responsibility for these varies, although stakeholders include city leaders, utilities, infrastructure owners and IT network providers. Its worth mentioning that eVTOLs will likely exacerbate existing pilot shortages, which is likely why some vendors have plans for autonomy in their back pockets.

Vertiports: The craft take off and land from vertiports, similar in size and placement to traditional heliports. For now, eVTOLs can use existing heliports outfitted with the correct charging equipment. Most eVTOLs work with airports to use their real estate, but cities will need to build out new vertiport infrastructure as these craft come to market. Vertiports can be placed atop existing buildings, and most will be greenfield sites, although one vertiport can host multiple takeoff/landing pads. Vendors looking to serve intracity/air-taxi use cases may be challenged to find timely real estate, with most vertiport vendors currently in wait-and-see mode as certifications are ever-delayed. Volocopter is taking matters into its own hands, and has designed its VoloPorts concept to be placed in high footfall areas like airports and train stations, although the company itself will not build them. Other pure-play vertiport vendors, such as Skyport, have signed partnership agreements with Joby and Wisk to prepare for demand.

IT networks: In its latest concept of operations (ConOps) around UAM specifically, the FAA expressed the need for complementary service-delivery environments to support communications between air traffic systems and extensible traffic management. Driven by a need to share information in real time in federated service networks, cloud computing and information management were cited as key IT enablers that will support eVTOLs. The partnership between Joby and SK Telecom reflects the entrance of communications providers into the space. Vendors like Eve Air Mobility are looking to get ahead of the issue; Eve has partnered with Atech to test out its own urban air traffic management systems to assist with the management of aircraft flow within controlled airspaces.

Airspace: Higher-density UAM operations will need to exist alongside the already stressed air traffic control system. The second version of the FAA's ConOps around urban air mobility proposes carving out a cooperatively managed space where eVTOLs and drones would operate apart from other traffic. Aircraft would manage flow and separation themselves, rather than depending on the mainstream ATC. This "extensible traffic management" environment is where automated digital systems could play a role, both in onboard systems and as ground-based arbitrators. Progress on defining rules, standards and regulation has been slow, and UAM/AAM will need their own interactions with traditional airspace controls in order to become a feeder to airports.

Energy and charging infrastructure: Akin to the US national electric vehicle charger buildout, eVTOLS will require their own network of chargers to support operations. Some AAM providers, like Beta Technologies, have begun building a charging network into their services, and will allow other vendors to charge on their network. The existing beta charging network has nine sites with 340 kW of power. Companies like Volocopter are ditching charging altogether in favor of swappable batteries. When their craft lands, the nine onboard batteries will be replaced and recharged at low speed to preserve battery life. As more vehicles come to market, utility owners and operators will need to manage load balancing, off-peak charging, and the integration of batteries and distributed energy resources to support growing energy demand, especially in already power-hungry cities.

Figure 1: Vendors

^{Source: 451 Research.
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