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The auto industry’s experience in producing vehicles in volume makes it a more likely center for air taxi production than the aerospace industry, analysts say. Carmakers from around the world already are knee-deep in development programs.
MILAN, Italy – Geopolitical tensions and economic uncertainties may have eased some of the hype surrounding the nascent electric vertical takeoff and landing (eVTOL) vehicle market, but analysts still predict it will soon become a multibillion-dollar industry.
“eVTOLs are central to the concept of next-generation mobility, part of which will be in the air,” says Edison Yu, global space and aerial mobility analyst at Deutsche Bank.
A forecast by Pune, India-based Straits Research updated in January projects the global eVTOL aircraft market to be worth $400 million in 2024, expanding to $2.46 billion by 2033.
eVTOLs are flying cars or air taxis powered by electric or hybrid systems that take off, hover, and land vertically like helicopters but emit less pollution. They are being developed with Distributed Electric Propulsion (DEP) batteries powering multiple motors and rotors, says Sergio Cecutta, founder and partner at U.S.-based aerospace, defense and autotech consulting firm SMG Consulting.
These motors enhance efficiency, safety and control by evenly distributing thrust across large airframes made from lightweight composite materials, operating at noise levels far below those of helicopters and airplanes.
Given their market potential, making vehicles efficiently and at scale is critical to eVTOL profitability, Cecutta says, and the auto sector’s manufacturing efficiency suits this better than that of the aerospace sector.
“The idea behind this market is that if you are making air taxis, which is what the majority of these companies want to do, you need volume to make money,” he says. “We’re talking volume in the high hundreds to thousands of units per year, and that is something that aerospace cannot do.”
Automakers’ potential return on investment is both short- and long-term, says David Yu, professor of practice in finance at New York University Shanghai and China’s only senior International Society of Transport Aircraft Trading (ISTAT) certified aviation appraiser.
“eVTOLs are the next logical wave in terms of development of…a passenger-transport vehicle…in the next 10 to 20 years,” David Yu says, adding, “Automakers see the potential synergies and crossovers and are putting a toehold into this space.”
In the short term, supplying components and contract manufacturing could ensure additional top-line revenues, leveraging excess capacity on production lines, he adds.
Automakers’ eVTOL investment has varied, Edison Yu points out. For example, Stellantis first partnered with U.S.-based eVTOL company Archer Aviation in 2021 and now is finalizing an exclusive contract-manufacturing agreement to make Archer’s Midnight eVTOL (pictured, below), an all-electric, piloted, four-passenger aircraft. Stellantis will help Archer scale production to 650 aircraft annually by 2030 at Archer’s new facility in Covington, GA.
Meanwhile, Toyota has invested $894 million into California-based Joby Aviation since 2020, with plans to “establish a manufacturing alliance for the first phase of commercialization” of Joby’s electric air taxi, designed to carry a pilot and four passengers at speeds of up to 200 mph (322 km/h). Neither company has provided details; however, the alliance likely will include the supply of key powertrain and actuation components for Joby’s aircraft, as per a long-term agreement signed in 2023.
Cecutta points to South Korean multinational Hyundai’s eVTOL advances as a “unique case” in the industry, given Hyundai’s “fully-owned subsidiary dedicated to making eVTOLs.”
That subsidiary, U.S.-based smart-mobility service provider Supernal, unveiled its latest eVTOL prototype in 2024, the S-A2, and is seeking U.S. Federal Aviation Admin. certification by 2028.
Honda also has accelerated development of its own eVTOL, saying it is leveraging its experience and proprietary core technologies developed with its HondaJet standard aircraft and Formula 1 race cars into a hybrid-electric propulsion eVTOL with a 250-mile (400-km) range.
Last year, the FAA gave the California-based Honda Research Institute USA permission to carry out demonstration flights with a subscale test model of the hybrid-electric VTOL concept.
Only a small number of eVTOLs have progressed to advanced testing and are nearing commercial deployment. In the U.S., Joby and Archer are the front-runners in achieving FAA certification, David Yu says. However, FAA certification for the first eVTOLs has been pushed back to 2026 or beyond.
“This is contrary to what leading eVTOL makers have anticipated, who were expecting a 2025 certification to kick-start commercialization,” he says.
Meanwhile, the Chinese government has stressed its ambition for China to lead the eVTOL market, developing the country’s “low-altitude” airspace within 3,281 ft. (1,000 m) above ground, David Yu says.
Chinese authorities have relaxed controls over the low-altitude airspace and funneled public funds directly and indirectly into eVTOL technology and infrastructure.
“We will definitely see opportunities and market growth in China, thanks to this governmental push,” David Yu says.
China’s GAC unveiled its eVTOL concept GOVY AirJet in December, while fellow Chinese automaker Chery Automobile said it completed a 50-mile (80-km) test flight with its eVTOL prototype that “can switch between autonomous flying and ground-driving modes and allows users to bypass traffic congestion with VTOL capabilities.”
Meanwhile, the German subsidiary of Chinese automotive company Zhejiang Wanfeng Auto Wheel picked up the bankrupt German eVTOL developer Volocopter for €10.9 million in March.
Also in March, China’s leading autonomous aerial-vehicle maker, EHang, become the first worldwide to obtain a certificate from the Civil Aviation Admin. of China for operating a pilotless aerial vehicle that can carry humans. EHang’s certified EH216-S eVTOL model is an electric, pilotless two-seater with 16 propellers and a 18-mile (30-km) range. It will launch with tourism and urban sightseeing flights. Despite China’s advances in aerial tourism, Cecutta predicts the first eVTOLs will operate as commercial air taxis in the 2030s.
“We’ll probably see tens of eVTOLs operating in the (next few) years – so not big numbers,” he says.
eVTOLs initially will be governed by the same airspace integration rules as helicopters, until new regulations specifically designed for Urban Air Mobility (UAM) are completed. Much infrastructure work will be needed, with eVTOLs likely operating from airports at first, Cecutta predicts.
