Air taxis and the moment of truth
In a year's time we will be living the 2024 Olympics in Paris. There are almost always too many reasons to hope that the present will become the future as quickly as possible, that tomorrow will come as soon as possible, and so we live not for the sake of living, but to have already lived. But that's not why I mention Paris Olympics, but because the air taxi company Volocopter has announced that during the event it will provide rides over the city to any person (in its Volocity model for two passengers). Let's call them air taxis, but the main feature of this type of device is the vertical and electric take-off (eVTOL). For the curious, according to Volocopter the ride over Paris will cost as much as flying in a helicopter, and they will gradually reduce the cost.
This has been promised very lightly, as demonstrated by another competitor, China's Ehang, in 2017, 2018, 2019, 2020,... Carl Jung, famous Swiss psychologist and psychiatrist, already mentioned that:
The man who promises everything is sure to fulfil nothing.
The year 2024 and 2025 are key for this mobility technology.
In the United States in the 1950s, it was proposed that mass-produced personal helicopters could provide the solution to an urban mobility crisis. Traffic accident rates were high. Congestion was a major problem. Roads were of poor quality and too narrow.
The personal helicopter seemed to offer a natural alternative to failing ground transportation. However, they did never had a chance. The solution to the crisis was more mundane. Federal funds were tapped to build a new highway system for the United States.
Today's urban mobility problems share some similarities with those of the 1950s, and now add climate change to the equation. We are witnessing another wave of enthusiasm for an aerial solution. Perhaps of a suspicious technological bubble enthusiasm.
More than 200 types of eVTOL aircraft are currently under development, all of them promising low maintenance costs, quiet operation and zero emissions. No one expects a sky full of personal eVTOL aircraft anytime soon. But many predict that eVTOL aircraft will revolutionize passenger and cargo transportation on regional routes, i.e., routes longer than an average city cab ride but shorter than the average domestic airline route.
The problem with these air taxis is that they are mostly designed and built by startups, but the reliability criteria they are required to meet to be certified is that of aviation companies, giants like Airbus. These large companies are not agile enough to develop this type of aircraft in the time and at the costs required. And it is precisely the startup nature of the companies that makes this business model so difficult to predict and to achieve, and I will explain: these organizations are continuously burning money to develop eVTOL as soon as possible in a technological race, and to do so they have to get financed by money from venture capitalists, financial institutions or whoever. If any of these players in the game runs out of money and lenders, their dream will be shattered forever and they will go bankrupt.
On the one hand, since the FED and the European Central Bank began to raise interest rates, it is becoming increasingly difficult to find capital, and we are at a critical moment. Experts are forecasting that if companies want to put flying taxi prototypes on the market in 2024-25, now is the time to validate the prototypes and move them into production. This is extremely expensive.
In addition, these companies have to manage very well to convince investors that their business model, technology and future economic benefits are the best. Otherwise, the money will go elsewhere. As an example of what I have said, here are some links: One of the most advanced companies in this race, Joby, is still losing money, but meeting technical milestones. This company has just received permission from the regulator to validate the first model coming off a production line.
Just look at the pictures of some eVTOL models to see the technical solutions of some startups:
These technical solutions have given rise to different business models. For example, Volocopter is betting on passenger flights within the same city. Lilium, on the other hand, is betting on inter-city trips, such as a Madrid-Valencia flight. However, some experts have doubts about the technical feasibility of Lilium's turbines. Among other doubts, they believe that they would consume a lot of energy in vertical takeoff, and therefore, their flight range would be very low. Or Ehang, which is going its own way with the Chinese regulator, which is asking quite different things from the US and European regulator. And it is just these kinds of details that make investors bet on one or the other company: the one they think will return the most profit.
So don't be in a hurry for the clock to tick, but we'll see what happens in a year's time.