Efforts to revolutionize urban air transport with electric flying taxis are hitting significant headwinds as key players in the industry face mounting financial pressures and technical challenges.
Among the most high-profile setbacks is the case of Volocopter, the German firm that had promised to debut its two-seater electric aircraft, the VoloCity, at the 2024 Paris Olympics. Instead of ferrying passengers, Volocopter was limited to demonstration flights, as the company scrambled behind the scenes to secure funding.
Failed attempts to secure a €100 million loan from the German government have pushed Volocopter to rely on Chinese automaker Geely, which is in talks to acquire an 85% stake in exchange for $95 million in funding. If finalized, the deal may see manufacturing shift to China, raising questions about the future of Volocopter’s operations in Europe.
Financial Struggles Across the Industry
The financial hurdles facing Volocopter are not unique. German EVTOL (electric vertical takeoff and landing) company Lilium, known for its innovative jet-powered aircraft, entered insolvency proceedings in November after failing to secure a €100 million loan from Germany’s development bank. Despite boasting ambitious plans for 780 orders globally and €1.5 billion in previous funding, Lilium’s efforts to bring its radical designs to market have stalled.
Lilium is now seeking restructuring options, but its goal of beginning full-scale testing by 2025 appears increasingly uncertain.
Meanwhile, the UK-based Vertical Aerospace, led by OVO Energy founder Stephen Fitzpatrick, faces its own challenges. The company’s VX4 aircraft has shown promise, completing piloted tests and achieving its first untethered takeoff and landing in November. Yet setbacks, including a 2022 crash and the withdrawal of Rolls-Royce from a key supply deal, have compounded financial strain.
Vertical Aerospace is in talks with financier Jason Mudrick, whose firm has proposed a $75 million investment. While the deal could secure the company’s immediate future, it risks stripping Fitzpatrick of control.
A Glimpse of Stability
Amid the uncertainty, Airbus’s CityAirbus NextGen project appears to be on solid footing. The four-seater EVTOL aircraft, backed by Airbus’s deep resources and technical expertise, is on track to become a reality. Similarly, well-funded US companies like Joby Aviation and Archer Aviation are progressing steadily toward production.
Questions About Profitability
Even as EVTOL companies inch closer to delivering their aircraft, profitability remains a looming challenge. Initial routes are expected to connect airports to city centers, but operational costs, particularly for pilots and batteries, cast doubt on their commercial viability.
Bjorn Fehrm, an aerospace consultant and former Swedish Air Force pilot, suggests the industry’s enthusiasm stems from the allure of pioneering technology. “No one wanted to miss out on the next Tesla,” he remarks.
As the sector grapples with turbulence, the promise of quiet, efficient urban air travel hangs in the balance.
