MIAMI – A recent article in the Financial Times reviewed how investors have put up a record US$4.3bn this year making bets on electric air taxies. Many, it seems, hope to find the next Tesla and cash in big on the industry.

The amount invested so far, only eight months into the year, is an annual record. The FT says the money was “raised through a combination of venture capital funding and special purpose acquisition companies, or Spacs.”

A SPAC, is a shell corporation. That means it exists only on paper and has no actual office or employees. However, it might have a bank account, hold passive investments, or be the registered owner of assets. It also can be listed on a stock exchange.

SPACs are created specifically to pool funds to finance a merger or acquisition opportunity. And that opportunity usually has yet to be identified.

So, a SPAC could be set up with the purpose of acquiring, say, a startup air taxi company.

You can see how such a strategy would be useful to fund an industry in which there are very few actual products on the market.

A concept electric air taxi by Autonomous Flight.

Hot! Hot! Hot!


The electric air taxi business is currently one of the hottest investment markets, even though most startups lack a flying prototype. Mostly, we see mockups or digital animations of the designs zipping through the skies. But there is an excitement around this new business sector that compares to the enthusiasm that is also seen around electric car companies.

In the FT article, Peter Harrop, chair of technology consultancy IDTechEx, said that while certain parts of the air taxi industry have a promising future, “billions of dollars have been invested by people who want the easy money of finding the next Tesla. We are in a white-heat situation where you can float almost anything for billions. We have companies that don’t yet have a product, selling the dream and raising billions,” he said.

The CityAirbus underdevelopment in Germany by Airbus Helicopter division

Maybe Not Not Not…


However, in this undiscovered country of opportunity, there may be some signs of tempered enthusiasm. The FT says that Joby Aviation, a Spac that counts Toyota among its backers, raised less than expected. Also, startup Archer recently cut its valuation by US$1bn in a revised deal with Spac Atlas Crest.

Robin Riedel, is a partner at consulting firm McKinsey & Company. He leads the consultancy’s future of air mobility group. In an interview, Riedel said, “The enthusiasm we have seen in the first quarter of the year has quietened down a bit. “It’s [due to] a combination of things: overall the markets have [become] less excited about Spac deals; the range of players has broadened; and people are accepting there might be delays in terms of things like certification.”

Martin Warner, founder of start-up Autonomous Flight, a small air taxi startup, said it was “inevitable that once the hype goes, people will trade out and the market will correct. I don’t think there is anything wrong with that… but I am still optimistic this industry is something really different.”

The biggest challenge for the industry, according to Riedel, remains certification by aviation safety regulators. However, Maria Algar Ruiz, drones program manager at the EU Aviation Safety Agency, said that the “first commercial piloted air taxi operations will be in place in 2024-25.”

Joby Aero Inc., flew its prototype in California and is opening an office in Washington DC to facilitate its work with regulators and allow visitors to enjoy a simulator flight of its aircraft. Photo: Joby Aero, Inc.

Infrastructure, Too

The Financial Times says that Heathrow and London City airport are cooperating with Embraer and various aviation regulators to see how they can redesign regional airspace to allow low-flying air taxis to fly safely. London City believes it could be possible to introduce an air taxi network by the middle of this decade.

A photo of the Volocopter prototype. Photo: Volocopter

Meanwhile, In Singapore

However, we might see things happening earlier in other countries. In December, Volocopter, a self-described “leader in Urban Air Mobility (UAM)” announced in a press release that it has committed to launch air taxi service in Singapore within the next three years. That would be by December 2023. The company is ahead of the competition as it completed an air taxi demonstration flight in October 2019.

How this will all hash out is still anyone’s guess. But with such intense investment and prototypes soon taking to the skies, the electric air taxi business should soon be, well, taking flight.


Featured image: Prototype electric air taxi from Joby Aviation. Photo: Joby Aviation.