From corporations, like Boeing, Toyota and Uber, to aviation startups, like Joby Aviation—everyone wants to be the first to launch a flying car.
It’s finally happening. Flying cars—a concept we saw in Harry Potter and the Chamber of Secrets and Back to the Future—are becoming a reality. While many people might scoff at the idea of flying cars—“What’s next? Teleportation? Pfft”—investors are all about taking the chance. So much so that they have set aside US$4.3 billion to meet the requirements. They raised this money through venture capital funding and investors backing proposals to list on the public markets through special purpose acquisition companies (SPAC).
A study by Morgan Stanley Research revealed that the market for electric air taxis will soar to US$1.5 trillion globally by 2040. But what exactly are air taxis, and why are investors eager for them to take off? Read on.
What is an air taxi service?
An air taxi is a small aircraft that would transport you from one place to another whenever you want. Once made, it will take off and land at the numerous small, local airports in the city. There will be no need for long runways. For companies, the goal is to decongest roads and make air taxis accessible to all. Frost and Sullivan Senior Industry Analyst Joe Praveen Vijayakumar told CNBC, “When air taxis become widely commercialized, they will definitely ease the traffic burden on city roads. They will usher in a nimble form of intracity travel, transporting people on the shortest possible route between two locations.”
Air taxis should be able to fly at 180 miles per hour at altitudes of up to 2,000 feet. NASA said that their air taxis would go up to 5,000 feet. For carmakers, air taxi is a viable option as it has the potential to reduce the maintenance and operating costs significantly.
The growing consumer interest in flying cars
Everyday commuters are just as excited to experience flying cars as investors, at least in India and Brazil. As per a McKinsey report, 47 percent of Indian respondents said that they would definitely consider using an air mobility vehicle in the future, as would up to 32 percent of Brazilian consumers. For them, the biggest advantage is the shortened travel time. They are willing to pay more for the convenience, too. The McKinsey report showed that 36 percent of Indian consumers were willing to pay five times the price of their current transportation to board a flying taxi to and from an airport.
But not everyone is so optimistic
Besides safety, another concern with air taxis is their viability. The Chair of Technology Consultancy IDTechEx Peter Harrop noted that while parts of the air taxi industry have a promising future, they still have a long way to go. He said that people “who want the easy money of finding the next Tesla” have invested billions of dollars into the companies. He calls this a “white-heat” situation where people can float any idea for billions of dollars, even if it is not entirely possible yet. “We have companies that don’t yet have a product selling the dream and raising billions,” he said.
Advice for startups wanting to break into the “flying car” industry
If your goal is to start an electric air taxi startup, you will need a lot of money. This money will go towards research and development, manufacturing, certification and operations. Pitchbook’s Senior Analyst Asad Hussain expounds, “The startups that have successfully raised or that will be able to raise significant amounts of capital to get them through the certification process …that’s the number one thing that’s going to separate the strong from the weak.” There are hundreds of startups in this space, and Hussain feels that not all of them are going to be able to raise huge sums of money.
This year, many air taxi start-ups, like Lilium, Archer and Vertical Aerospace, might go public. And if you are in Singapore, you might get to board an air taxi by the end of 2023 as the nation plans to run the world’s first commercial electric air taxi service by then. The prospect of flying to wherever and whenever you want is thrilling to say the least. Looks like teleportation might not be so out of reach after all.
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