Competitive Fractures Begin To Show As Funding Flows Into UAM Market
With more than 100 companies vying to enter the nascent advanced air mobility industry, the competition was always going to turn bloody sooner or later. Now the first blows have been exchanged as startups elbow to be first to market.
Fists have started flying as electric vertical-takeoff-and-landing (eVTOL) startups attract billions of dollars of investment via mergers with special-purpose acquisition companies (SPAC). These tie-ups have resulted in perceived leadership of the urban air mobility (UAM) race changing hands several times already this year.
Round 1 In February, China’s EHang was savaged by short-seller Wolfpack Research, which accused it of fabricating revenues from sham sales and overstating its production and certification progress. Wolfpack also questioned the quality and safety of its eVTOL design. EHang fired back with a PR blitz and a lawsuit.
EHang was the first of the eVTOL leaders to be listed publicly, in December 2019, and some of its issues can be attributed to learning to be a public company. The startup has moved toward being more transparent with investors, but some of Wolkpack’s criticisms echo industry concerns about whether EHang can expand its autonomous eVTOL business beyond the supportive regulatory regime in China.
Round 2 Volocopter rightly can claim to be a pioneer in eVTOL, having flown its first simple prototype in 2011. And the German startup expects to be one of the first to begin commercial UAM service, in 2023. But it has seen newer, glitzier entrants race ahead to raise billions in SPAC funding.
Perhaps because of this, Volocopter has released a white paper and new branding emphasizing its claim as the “pioneer of electric urban air mobility.” While its VoloCity multicopter eVTOL is limited in capability and capacity, carrying a pilot and one passenger 35 km at 90 kph (22 mi. at 56 mph), the startup argues it is simple, quiet and can scale to 100,000 air taxis operating in cities globally by 2035.
Round 3 In addition to announcing a $3.3 billion SPAC merger in March, Lilium also launched an offensive to counter skepticism over its performance claims. Its competitors are developing two- or four-passenger eVTOLs with exposed rotors and targeting intracity UAM, but the German startup is developing a seven-seat ducted-fan vehicle aimed at intercity regional air mobility and designed to fly up to 250 km and 280 kph.
Lilium acknowledges that ducted electric vectored thrust is less efficient than rotors in hover but says it already is testing batteries that will provide the high power required for the brief vertical-takeoff-and-landing phases as well as the energy needed for fast regional transport. The batteries will be available commercially for the launch of passenger flight by the end of 2024, the startup says.
Round 4 Wisk, the joint venture between Kitty Hawk and Boeing, has filed a lawsuit accusing rival UAM startup Archer of stealing the design of its next-generation eVTOL. Wisk is flight-testing its two-seat, self-piloted Cora but now is developing a sixth-generation design for eventual FAA certification.
The confidential 2020 patent application for this design is among data that engineers hired away from Wisk by Archer are accused of stealing when they left. Wisk questions the rival startup’s ability to move from founding to a $3.8 billion SPAC merger in barely three years, but Archer denies any wrongdoing.
Round 5 The dark horse among early leaders in the UAM race, Beta Technologies has responded to the SPAC frenzy by announcing significant orders for its Alia eVTOL. These contracts include an initial 10 of up to 150 aircraft for UPS subsidiary UPS Flight Forward for use as feeder freighters and up to 20 for use on Blade Urban Air Mobility’s on-demand passenger service.
Beta has stayed low-key so far, largely funded privately by its first customer, United Therapeutics, which plans to use the Alia to transport organs for human transplantation. Beta has yet to follow the field and strike a SPAC deal, but with orders a rare commodity in the UAM industry, the startup clearly is staking its claim to be an earlier leader in the market.