An anticipated innovation for this year’s Paris Olympics was to feature an electric flying taxi service. Germany’s Volocopter had pledged its two-seater, electric-powered VoloCity aircraft would transport passengers around the city. However, the company only managed demonstration flights, as it faced the urgent need for new funding to remain operational. Talks for a €100m loan from the German government fell through in April. Now, Volocopter is in negotiations with China’s Geely for an 85% stake in return for $95m, a move that could shift future production to China, according to media.
Volocopter is among many companies globally working on electric vertical take-off and landing (eVTOL) aircraft, which offer helicopter-like flexibility with less noise, cost, and emissions. Yet, regulatory approval and manufacturing costs have led some investors to withdraw. Lilium, another German eVTOL developer, faced significant setbacks. Its aircraft, powered by 30 electric jets that shift between vertical and forward flight, attracted considerable interest, securing 780 orders and agreements globally. However, after failing to secure a €100m loan from the German development bank KfW, Lilium entered insolvency proceedings in early November and delisted from Nasdaq. Although work on its new aircraft continues, financial struggles may delay its production.
In the UK, Vertical Aerospace—a prominent eVTOL company founded in 2016 by Stephen Fitzpatrick—has advanced its VX4 aircraft through early piloted tests. However, it faced challenges, including a crash and the departure of Rolls Royce as an electric motor supplier. Financially strained, Vertical received a $25m investment from Fitzpatrick in March but missed a second installment due in August. With $57.4m on hand, it is negotiating with major creditor Jason Mudrick, who has proposed a $75m investment, cautioning that without his deal, insolvency is inevitable. A resolution is reportedly near, with hopes that it will unlock further funding.
Despite the challenges facing many eVTOL developers, Airbus’s CityAirbus NextGen appears well-positioned to succeed. A four-seater with eight propellers and a range of 80 km, the project benefits from Airbus’s financial resources and technical expertise. Other well-funded ventures like Joby and Archer in the U.S. also stand a good chance of getting their aircraft into production, although profitability remains uncertain. Initial routes are expected to connect city centers to airports, yet high operational costs, including pilot and battery expenses, may impact the bottom line. According to aerospace consultant Bjorn Fehrm, the push for eVTOL investments initially attracted backers hoping to capture “the next Tesla.”
