The next 12 months will be a crucial year for eVTOL developers and infrastructure companies.

In a race to be the first to bring eVTOL aircraft to the U.S. by the middle of the decade, several frontrunners in the sector are hoping to make headway in 2023 by building conforming aircraft and advancing their flight test programs.

As investment in the industry wanes, it’s going to be a crucial year for eVTOL developers to reach key milestones if they want to see continuous cash flow to fund advancements in their programs.

Last year saw the beginning of many milestones reached, including those in flight testing. California-based Joby Aviation was able to prove its targeted performance specs when its first pre-production prototype flew at speeds of more than 200 miles per hour (322 kilometers per hour). The company also achieved what it believed was the highest altitude reached for an eVTOL at 11,000 feet (3,353 meters).

Vermont-based Beta Technologies racked up significant flight test achievements as well, with not one but two multi-mission flights with its electric Alia-250 aircraft. Flying in conventional take-off and landing mode, the flights tested Beta’s battery technology and charging infrastructure, as the aircraft carried out a cross-country flight covering 1,400 miles (2,250 kilometers) across six states last summer, with stops along the way to recharge.

The inaugural flight was followed by a second multi-mission flight from New York to Kentucky, this time covering 876 miles (1,410 kilometers).

“The charging network is a really big piece of this that sometimes goes underappreciated,” Beta test pilot Lochie Ferrier had told Vertical after the company’s second flight. “It’s really key having this charging network in place. That’s a big part of getting these airplanes out into the world, and we’re pushing hard on it.”

Data from flight tests are important elements that go into the conforming aircraft design, which many frontrunners are touting 2023 as the year when their conforming aircraft will be built.

In fact, Arizona-based SMG Consulting, founded by former Honeywell and Danaher executive Sergio Cecutta, predicted that in addition to Joby and Beta, California-based Archer Aviation and German startup Volocopter will also roll out conforming aircraft this year. It’s a necessary milestone to reach if they want to bring their aircraft to market by the middle of the decade.

First-movers that originally intended to introduce air taxi services in the U.S. in 2024 hit a snag last spring when the U.S. Federal Aviation Administration (FAA) decided to change how winged eVTOL aircraft would be certified.

Developers like Joby had been working to design their winged aircraft for certification under FAA Federal Aviation Regulations Part 23, using Part 21.17(a) with special conditions — a path that wouldn’t have required new rulemaking for operations and pilot training.

But the FAA’s decision to group winged eVTOL designs with multicopter aircraft under Part 21.17(b) now requires special federal aviation regulations (SFARS) to be in place for operations and pilot training.

Mike Hirschberg, executive director of the Vertical Flight Society (VFS), had said the FAA decision “blindsided the eVTOL industry and was reached in isolation, without any dialogue or input.”

Hirschberg, who will be stepping down from his role at VFS on May 31, 2023, noted that it has “often taken the agency a decade to create new rules.” The aviation authority would now have to “move at speeds it has seldom ever achieved in the past. If it fails, the U.S. will lose its leadership in eVTOL, and the rest of the world will move forward without it.”

Meanwhile, outside the U.S., China-based EHang has been inching toward certification with its country’s aviation authority. It too has seen its own delays in certification, but largely due to the global pandemic, macroeconomics and geopolitical tensions, the company said.

“Like most Chinese companies, we have been facing pressures, challenges and uncertainties due to the resurgence of COVID-19 in China and the stricter travel restrictions,” Xin Fang, EHang’s chief operating officer, had told shareholders.

With restrictions hampering the company’s ability to engage with the Civil Aviation Administration of China (CAAC), EHang didn’t achieve its initial goal of type certifying its EH216 autonomous aerial vehicle (AAV) last year. But if SMG’s predictions for 2023 are accurate, EHang will likely lead the pack as the first in the world to be type certified with at least one aviation authority this year.

EHang has been making steady progress with the CAAC thanks to China’s support of autonomous eVTOL operations — a different approach from the FAA or the European Union Aviation Safety Agency (EASA), which are putting their efforts toward writing regulations for piloted operations.

Funding and cash spend

“Further investments will go to the companies with the most milestones, the ones making the most progress,” Cecutta previously told Vertical. “We know there are too many companies, and we know from history that not all will survive.”

SMG Consulting predicts funding for eVTOL development in 2023 will be lower than in 2022, and at least one company will run out of cash this year.  

In the race to bring their eVTOLs to market, companies are now looking for new sources of capital. Gone are the days when developers had turned to special purpose acquisition companies (SPACs) to secure public funding.

Joby, Lilium, Archer and Vertical Aerospace all went down the road of taking their companies public via SPAC in 2021, but mass redemptions — where large numbers of shareholders chose to redeem their shares rather than remain with the combined company — saw much lower returns for these eVTOL developers than expected.

Observing this trend, Volocopter canceled its planned merger that year, but Brazilian eVTOL developer Eve Air Mobility chose to move forward with its plan to go public via SPAC, merging with Zanite Acquisition Corp. last spring — not surprisingly, also seeing a shortfall in the cash it received.

To help support its eVTOL program, the Embraer-backed company turned to the Brazilian development bank (BNEDS) to secure about $92.5 million in new funding in the form of two lines of credit.

Eve claimed this brought its total liquidity to more than $400 million, which it will use to help offset its expected cash burn of between $100 million and $150 million a year, as it works to certify its four-passenger vehicle and bring it to market in 2026.

Other eVTOL companies are taking different approaches to raising capital. Archer, for example, recently turned to existing partners to draw on expertise and funding. This included automaker Stellantis, which plans to provide up to $150 million in equity capital for Archer to draw from in 2023 and 2024, subject to Archer achieving certain milestones that it expects to reach this year, the company said. 

Archer had also convinced its future customer United Airlines to hand over $10 million as a deposit for 100 of its initial production vehicles. The company called the down payment a “watershed moment for the eVTOL industry,” where nearly all provisional eVTOL aircraft sales lacked cash deposits or a formal payment schedule.

Startups that can encourage their customers to hand over cash before their product is type certified have found themselves with new funding to help carry their eVTOL program forward. German startup Lilium is one such company that’s counting on deposits for its Lilium eVTOL Jet to help fund its program.

Recently securing a deal with eVolare, a subsidiary of Volare Aviation, Lilium expects to see a 50% deposit for at least 10 of the Lilium Pioneer Edition aircraft in 2023.

“Lilium views pre-delivery payments as an integral component of our future capital structure,” Sebastien Borel, senior vice president of commercial at Lilium, told shareholders at the time.

If the company can secure such funding, it will add to Lilium’s recent $119-million raised from existing shareholders, new investors and strategic partners, which includes Honeywell and Aciturri.

Infrastructure development

As regulations surrounding eVTOL development, operations and pilot training come together, so do the regulations around the infrastructure needed to support these new aircraft.

Last year, the FAA and EASA, as well as standards organization ASTM International, published their own versions of vertiport specifications. Providing requirements for planning, designing and building vertiports, the guidelines cover issues such as site selection, visual aids, obstacle limitation surfaces, emergency procedures, and charging infrastructure, among others.

Following in the path of the FAA and EASA, Australia’s Civil Aviation Safety Authority (CASA) also released its own draft vertiport design guidelines, which is open for public comment until the end of March 2023.

These guidelines provide a much-needed framework that vertiport companies, such as Ferrovial, Skyportz, Urban-Air Port, UrbanV, Skyports, and others, can work from. Industry stakeholders have pointed out that infrastructure development has been well behind eVTOL development. But many of these vertiport companies are now starting to map out plans to develop infrastructure around the world.

Urban-Air Port, for example, was the first to open an operational vertiport prototype in the U.K. last spring. Backed by Supernal, the urban air mobility division of Hyundai, the company has plans to build 200 vertiport sites around the world, including two potential sites in Canada through a partnership with the Dymond Group.

Meanwhile, UrbanV is designing vertiport networks in Rome, Venice, Nice/Côte d’Azur and Bologna, with a goal of starting the first commercial route in Rome by the end of 2024 to connect Rome’s Fiumicino airport with the city center.

In Australia, vertiport real estate company Skyportz is filling a need in the industry as far as site selection. The company is focused on developing its global property database to give vertiport designers a map of potential sites that have already been vetted for passenger demand, suitability for aviation, and access to electricity, among other criteria.  

In an industry expected to become reality by 2025, the next couple of years are crucial for all parts of the sector. While eVTOL development has been at the forefront in the last few years, the infrastructure needed to support the technology will become more prominent this year, according to SMG Consulting.

The firm, which regularly tracks this space through its Advanced Air Mobility Infrastructure Readiness (AIR) Index, predicts vertiport companies will double in 2023, emerging around the world to address issues like the digital network, air traffic management system, and battery charging.

In fact, since the time the firm began tracking infrastructure companies in May 2022, the number of companies had already doubled by December 2022.

“We are at a critical time now to get moving on vertiport networks,” Clem Newton-Brown, CEO of Skyportz, previously told Vertical. “Regulations need to be changed, community license achieved, development approvals granted, sites secured and finally, building and commissioning. The investment that has gone into eVTOL development will soon need to be doubled down into vertiport infrastructure networks.”