Electrifying the Skies – When Will Airborne EVs Manifest?

Ground-based electric vehicles are all the rage now. As we have shared before, global EV sales reached almost 14 million last year, bringing the global electric fleet to 40 million in 2023.

But what about the skies? Is there any progress being made to airborne EVs? Well, there are, but they are simply not yet as popular or widely adopted as on-the-road EVs. 

Before we deep dive into the state of their advancement, let’s first see what they are. Airborne electric vehicles are simply flying aircraft that use electric power. They include both piloted and unpiloted aerial vehicles, which take off and land vertically.

Given that aviation is responsible for 3.5% of climate change and in 2021, the Environmental Protection Agency (EPA) issued a greenhouse gas emissions standard just for aircraft, there is now a growing interest in airborne EVs.

Instead of using fossil fuels, these aircraft run on electricity, which, as Mogale Modisane, a representative of the UN’s World Energy Council, notes:

“Not only makes aviation more sustainable but also drastically reduces noise pollution and carbon emissions produced by planes.”

The motors of airborne EVs are powered by battery packs that allow for “a quieter and smoother ride compared to its combustible counterparts,” added Modisane.

The Advent of Urban Air Mobility

One of the prime examples of this new mode of air transportation is eVTOL, which is an electric vertical take-off and landing aircraft. So, they are not really planes; rather, they can range from delivery drones to urban air taxis.

When it comes to urban air mobility (UAM), these electric aircraft are among the innovations that are very close to becoming a reality. It is anticipated that thousands of eVTOLs could be flying by the end of this decade. 

Hailed as affordable, quiet, safe, and environmentally friendly, you may be able to fly in one soon, in the next few years, actually.

The Middle East, in particular, is becoming one of the fastest-growing regions for e-VTOL operations. Here, the UAE and Saudi Arabia are at the forefront of future air travel. 

US-based e-VTOL maker Joby has already signed a deal with the Road and Transport Authority (RTA) of Dubai to launch air taxi services by 2026, with initial operations to start next year. Another US eVTOL aircraft provider, Archer Aviation (ACHR -1.04%), has signed an agreement with Abu Dhabi to commence electric air taxi flight operations across the Emirates by late 2025.

Chinese manufacturer EHang, meanwhile, has already completed the first passenger-carrying demo flight of EH216-S, a pilotless e-VTOL aircraft, in Abu Dhabi earlier this year. 

According to McKinsey experts, by 2030, leading companies in the passenger AAM industry may offer many more daily flights, which will be shorter and with fewer passengers on board,  than the world’s largest airlines. 

Against this backdrop, the US Federal Aviation Administration (FAA) issued final rules last week for operating air taxis. The FAA said that air taxis belong to Advanced Air Mobility (AAM) flyers. They are highly automated, powered by electricity, and have vertical take-off and landing abilities, explained the agency.

Also considered ‘power-lift’ vehicles, they have the elements of both airplanes and helicopters, said the FAA. While they will begin by using existing travel paths and landing structures currently being used by helicopters, the new rules will allow pilots to train with a single set of flight controls. 

Powered-lift aircraft, FAA Administrator Mike Whitaker said, are “the first new category of aircraft in nearly 80 years,” and the new rules will open the door to supporting their widespread AAM operations in the US.

To advance this sector, last month, the FAA gave a $3.34mln grant to Wright Electric along with its partners, including NASA, DOE, and DOD, under its Fueling Aviation’s Sustainable Transition (FAST) program. Through this grant, the FAA aims to develop a new class of batteries for large electric aircraft that can accommodate 100+ passengers, which accounts for over 90% of the aerospace industry’s carbon emissions.

Breaking New Grounds

As the race to decarbonize the aviation industry heats up, companies are now working on finding ways to make passenger airplanes operate entirely on electric power.

E9X is a newly designed electric aircraft, the design of which was conceptualized by the aviation startup Elysian and the Delft University of Technology in the Netherlands. The aircraft can hold more passengers (90) and fly farther (up to 500 miles) on a single charge than previously thought possible.

These estimates are based on a theoretical battery pack of 360 watt-hours per kilogram. In contrast, Tesla (TSLA +0.72%) batteries have a density of between 272 and 296 Wh/kg.

The weight of the electric battery, according to Jayant Mukhopadhaya, a senior researcher at the International Council on Clean Transportation (ICCT), is the main constraint of these planes as conventional commercial batteries store about 50x less energy per pound than jet fuel. As a result, in order to power an aircraft as big as the Boeing 737, we would need about 35-ton batteries.

“High density battery technology is one of the challenges at this moment, because scaling up production and further improving density remain crucial for widespread adoption.”

– Simay Akar, a senior member at IEEE

While the battery is the primary concern, the design is also critical. As such, the wings of the E9X aircraft are extremely large relative to the plane’s body, which increases its aerodynamic efficiency. 

“You shouldn’t assume that an electric plane is going to look like the (most successful) planes of today.”

– Reynard de Vries, director of design and engineering at Elysian

Also, the batteries will not be placed in the fuselage but rather in the wings because they represent a large chunk of the plane’s weight, and weight must be put “where the lift is being generated.”

The E9X, however, is just a concept for now and won’t take flight until at least 2033. However, there are already other electric passenger aircraft, such as Aviation Alice, whose prototype was tested years ago, late in 2022, while having a target date of 2027 for full production. Eviation Alice, however, is designed to carry only nine passengers and two crew while having a range of about 250 nautical miles. 

So, there are clear limitations to electric planes; however, their ability to significantly reduce their carbon footprint from flying is too big to ignore. It is estimated that switching to electric planes can reduce CO2 emissions by as much as 88%. Hence, the growing focus. 

Even tech billionaire Elon Musk, who is already involved in designing, manufacturing, and selling EVs and battery energy storage devices, is discussing the potential and possibility of battery-powered electric airplanes. While the batteries are currently “too limited on a range,” Musk believes they could be viable in about five years.

For that, the energy density of batteries needs to improve, which currently lags behind that of jet fuel. Musk added:

“(However), electric motors weigh much less and convert stored energy to motion better than combustion engines.”

Amidst this, Chinese battery giant Contemporary Amperex Technology Co Ltd (CATL) announced that it successfully flew a 4-ton plane using its ultra-high density “condensed batteries,” which were first released last year. The battery packs more than twice the energy density of any other on the market at 500 Wh/kg.

These condensed batteries have been designed specifically to be aviation-grade with safety in mind and to boost clean aircraft’s range. The company now expects to have an 8-ton electric aircraft with a range of 1,240-1,865 miles operating by 2027 or 2028.

The Quest for Advanced Battery Technology

While companies have begun changing the landscape of advanced air mobility (AMM) and the government has started to provide clear rules, researchers are addressing the biggest challenge and developing new batteries for airborne EVs.

To take cleaner transportation to the skies, researchers at the Oak Ridge National Laboratory (ORNL) of the Department of Energy (DOE) developed new energy-dense materials to understand their deterioration when put under severe conditions.

The airborne EVs aren’t just flying cars. As such, researchers concluded we can’t adapt electric car batteries to use in eVTOL, though it has been the dominant approach so far. 

“The eVTOL program presents a unique opportunity for creating a brand new type of battery with very different requirements and capabilities than what we have seen before.”

– Lead researcher Ilias Belharouak, an ORNL Corporate Fellow

The study found that the power and performance demands of eVTOL batteries negatively impact their durability and longevity. This is because while electric car batteries drain at a uniform pace, batteries used in eVTOL require different amounts of power for their various flight phases like ascent, suspension, and descent.

“This requires us to answer questions about the interplay of battery safety, cycle life, and stability at high temperatures while balancing the need for short bursts of high power with energy reserves for longer-range flight.”

– Belharouak

The research team developed lithium-ion batteries and then tested for eVTOL’s climb phases. They also tested a new ORNL-developed electrolyte, which performed better, retaining more capacity during the phases that require the most power. The team is currently working on further improvements to the electrolyte and other battery components.

Earlier this year, researchers at Chalmers University of Technology also reported their first life-cycle assessment of a two-seater all-electric aircraft that’s commercially available, the Pipistrel Alpha Electro, and compared it to its fossil fuel-powered version.

The study stated that it’s after about 1,000 flight hours that the electric aircraft takes over the fossil fuel aircraft in terms of reduced climate impact. The aircraft’s estimated life span, meanwhile, is at least 4,000 hours.

According to the study, further development of batteries will be a major step toward reducing the electric aircraft’s life cycle impacts.

Lead study author Rickard Arvidsson pointed to the constant development of lithium-ion batteries and new battery technologies like lithium-sulfur batteries, which are still in the early phase of development, for improving the environmental performance of electric aircraft and making them preferable to fossil-fueled ones. 

Driven by the critical role batteries play and the rising number of both commercial and military aircraft deliveries, the aircraft battery market size is expected to grow from $4.26 billion in 2023 to $11.9 billion by 2031. And as airborne EVs gain more traction, this market size should grow even bigger.

Companies Working to Make Airborne EVs a Reality

Now, we’ll take a look at some prominent names in the sector that have been working on advancing this field, which, according to McKinsey’s October 2024 analysis, has been seeing a slowdown in disclosed funding. 

The funding has been going down since hitting a peak in 2021 at €6.8 billion. This funding dropped to €3.9 billion in 2023, which is expected to be similar for this year. The drop “comes at a particularly bad time” as the majority of companies still need to complete the “development, prototyping, and testing required for type certification,” which needs €1-2 billion.

This environment has already begun affecting companies. So, let’s take a deeper look into these companies;

1. Joby Aviation (JOBY -0.6%)

The $3.78bln market cap company develops electric air taxis designed for commercial passenger service. Their aircraft can carry a pilot and up to four passengers, with a maximum range of about 100 miles and speeds up to 200 mph. Joby has already conducted extensive flight testing, covering over 30,000 miles, and is now in the process of establishing a manufacturing facility to produce these aircraft in Dayton, Ohio.

Its shares, at the time of writing, have been trading at $5.27, down 2.75% YTD. It has an EPS (TTM) of -0.49 and a P/E (TTM) of -10.85. For Q2, it reported a net loss of $123 million while having $825 million in cash and short-term investments. The company is aiming for a type certificate by late next year, which is 37% through the stage four FAA certification process.

The company, which has partnerships with Uber and Delta, recently launched a public offering to sell up to $200 million of its shares of common stock. Earlier this month, Toyota, the largest external shareholder of Joby Aviation, announced another $500 million investment in it to support its electric taxi’s certification and commercial production. 

2. Archer Aviation (ACHR -1.04%)  

The $1.2bln market cap Archer focuses on urban air mobility and is building an electric-powered air taxi called Maker. The company is currently constructing a facility in Georgia to support the production of its Midnight eVTOLs.

Currently, its shares are trading at $3.41, down 44.45% YTD. It has an EPS (TTM) of -1.2 and a P/E (TTM) of -2.78.

For 2Q24, CEO Adam Goldstein noted its indicative order book sitting at nearly $6 bln while its operating expenses were $121.2 mln and net loss was 106.9 mln. Cash and cash equivalent for the quarter came in at $360.4 mln. At the beginning of the second half of 2024, Chrysler-parent Stellantis said that it would invest an additional $55 million in Archer Aviation.

3. Lilium (LILM +10.4%)  

This $88 mln market cap company is developing an eVTOL jet using innovative ducted electric vectored thrust technology. They have made significant progress, including the assembly of their electric propulsion system, and are aiming for commercial deployment, with initial flights expected in the coming years​.

Its shares are currently trading at $0.1391, down 88.41% YTD. It has an EPS (TTM) of -0.16 and a P/E (TTM) of -0.88. In its Q1 2024 Shareholder Letter, Lilium noted advancing the production of its first Lilium Jets, starting battery pack production, and commercial order pipeline growing over 780 aircraft. 

Recently, the German company’s $50mln loan guarantee was rejected by the federal government. Following that, the air taxi firm stated in a filing last week that its two main subsidiaries, Lilium GmbH and Lilium eAircraft GmbH, will file for insolvency in the coming days due to being unable to raise sufficient additional funds to continue their operations.

4. Vertical Aerospace (EVTL -6.96%)  

With a market cap of $109.67 million, Vertical Aerospace has been working on the VA-X4 eVTOL aircraft, which is designed for air taxi services. The company is focused on achieving certification and has made advancements in its testing program​.

Its shares, as of writing, have been trading at $5.74, down 16.57% YTD. It has an EPS (TTM) of -4.23 and a P/E (TTM) of -1.36. Last month, the company announced a 1-for-10 reverse share split of its shares to increase the per-share trading price.

As of June 30, 2024, the company reported cash and cash equivalents of $84 million. For the first half of the year, Vertical had an operating loss of $25 million and was awarded a $10 million UK Government grant from the Aerospace Technology Institute (ATI) for its next-generation propeller development.

5. Surf Air Mobility (SRFM +3.28%)

This one is a $24.53 million company that operates traditional flight services in addition to developing an electrified version of the Cessna Grand Caravan and plans to incorporate electric and hybrid-electric powertrains into its fleet.

Its shares are down 83.96% YTD as they trade at $1.74. It has an EPS (TTM) of -88.16 and a P/E (TTM) of -0.02. In August, Surf Air Mobility announced a one-for-seven reverse stock split.

For 2Q24, it posted $32.4 million in revenue and adjusted EBITDA loss of $11.8 million. Net loss, meanwhile, was $27 million, which included investment in R&D for electrification and software technology, stock-based compensation, and transaction costs. 

Conclusion

So, as we saw, airborne electric vehicles (EVs) are advancing rapidly, bringing us closer to a cleaner, quieter, and more efficient era of aviation. From eVTOLs in urban air mobility to experimental electric passenger aircraft, these developments show the potential of electrification in the skies. 

While challenges remain, such as battery density and aircraft design, innovations from researchers and companies suggest that electric aviation could soon become an integral part of transportation. And as governments and industries work together to address climate concerns, airborne EVs can also play a pivotal role in reducing carbon emissions and transforming air travel for a more sustainable future.

Click here to learn how airborne taxis will generate $4 trillion by 2027.