Sunday, August 15, 2021

As Electric Air Taxis Land on Stock Markets, Investors Need a Flight Guide

Investors may soon face a choice between first movers like Joby and more niche players such as Lilium and even air-ambulance startup Dufour

Swiss startup Dufour is focusing on the air-ambulance market, which is ripe for disruption.

The Wall Stret Journal 
By Jon Sindreu
August 14, 2021 10:07 am ET

A few years ago most investors had never even heard of “air taxis.” Now they need to decide whether to board early movers with a high-altitude but low-definition view of the potential market, or else wait for the technology to land somewhere more specific.

On Wednesday, California-based Joby Aviation completed its merger with a special-purpose acquisition company. Its shares initially popped 40%, confirming that investors were counting the days until the first air-taxi company reached the stock market. They will soon get more options: Archer Aviation, Vertical Aerospace and Lilium Air Mobility also focus on electric vertical-takeoff-and-landing vehicles, or eVTOL, and are scheduled to close similar deals. Others may be waiting in the wings, such as the lesser-known Swiss startup Dufour Aerospace, which is putting a special focus on air ambulances.

For eVTOL vehicles, the most feasible road to success is to become a replacement for the world’s 23,000 commercial helicopters, which are on average 20 years old, noisy and unsafe. Air taxis under development have a similar range, and operators claim they will be up to 100 times quieter and at least three times cheaper to run.

But helicopters are only worth $50 billion, whereas analysts are dazzling investors with a forecast eVTOL market size of $1 trillion in 20 years’ time.

This is probably why most firms don’t market themselves as targeting the typical 100-to-250-mile helicopter trip. Instead, they envision a hypothetical “urban air mobility” market that competes with Uber. This seems fanciful beyond a few select routes—such as taking Wall Street bankers to JFK airport—because having to get to a landing pad would defeat the purpose of avoiding car trips.

Joby essentially wants to roll out the technology first, and figure out where the market goes later. Its air taxi could theoretically adapt both to taking New Yorkers on their daily commutes and to flying them on a regional trip to Philadelphia. “We’ve found that four seats were close to optimal for the vast majority of trips,” said Joby Executive Chairman Paul Sciarra.

The “build it and they will come” view has some merit. The economies of scale involved in production could be a barrier late entrants struggle to overcome. Joby is ahead in terms of development, funding and certification: Its full-scale prototype has had more than 1,000 test flights, whereas Archer and Vertical’s four-passenger aircraft haven’t conducted a single one.

The downside is that some competitors could end up better positioned in specific markets. In Germany, Lilium is testing a six-passenger vehicle for regional routes, while Volocopter is at an advanced stage of developing and certifying a one-passenger craft with a 22-mile range. Since taxis rarely carry more than two people, this seems a better fit than Joby’s vehicle for the few city-to-airport routes that might make sense in places like New York, Paris and Singapore.

Dufour, which is currently preparing its next private financing round, is a particularly interesting niche startup. Its hybrid tilt-wing aircraft is explicitly going after helicopters, especially light ones often used in emergency medical services, such as the Airbus H125 and the Bell 206. Air ambulances may only be a $10 billion business, but it is a well-defined market that is growing quickly. It is also ripe for disruption: The bill for getting airlifted after an injury can be $50,000. Many studies find that, taking cost and safety into account, it is often not worth it.

“A cheaper air ambulance will save so much time for nurses and doctors that it will quickly become competitive against ground transportation as well,” said Dufour Chief Executive Thomas Pfammatter, who flies helicopter rescue missions himself.

SPACs love speculating on hypothetical technologies designed to serve hypothetical markets. Most investors might want at least one of these variables to pass some practical milestones before jumping aboard.

Joby Aviation


  1. Your guide to understanding these may be Theranos.

    Same M.O. is used on these projects. Big claims, years of hype, designs get tested but can't deliver on the projected performance figures. Carefully produced videos set to music but no public demonstrations of full flight capabilities.

    Before investing, have them show even one demonstration test video and credible data for their vehicle loaded at passengers with travel bags weights and volumes being flown at full mission profiles and duration, speeds, altitudes, distances, winds, weather, reserve time and "quiet" operation.

    All EVTOL designs lack auto-rotation descent. Most lack glide capability and control surfaces. The pretense of BRS chute usage as a mitigation ignores the tumbling mode of vehicles that cannot glide or auto-rotate. Uncontrolled falling vehicle debris poses risks to people on the ground. Look up the 1977 NYC helicopter incident on top of the Pan Am building that killed the lady on the street.

    Multi-rotors lack the inherently more stable mass below central rotor arrangement of conventional helicopters, increasing the likelihood of vomit-inducing pitch, yaw and roll motions during windy arrivals and departures that differ greatly from calm flights at dawn in the promotional videos.

    This vehicle looked like it would get to market. No explanation as to why it did not go forward. Had hoped to see what the hover-taxi stability would be like with winds in play.

  2. How do you make a small fortune in all these eVTOL startups? Well you start with a large fortune...

  3. Great reference to Theranos, I followed that hype as someone with good understanding of the science behind that and couldn't believe what I saw and read.
    Arizona's governor, Dug Douchey, even had laws protecting citizens changed to, you guessed correctly, foster business by enabling Walgreens to partner with Theranos. Again, there was no product at that time, just promises and scams by using Siemens analyzers instead of Theranos' "Edison". But hey, a catchy name!

    Here some articles about Lilium with hard data.

    The German Aerokurier article contains a download of a scientific article by engineers from Munich's Technical University (in German) wit calculations (only SI units, nothing imperial ;-)) and references/links to more articles in English.

  4. The new wrinkle in EVTOL world is SPAC shell company fundraising. From another forum, some insight on SPAC's:

    "No one has mentioned SPACs. That’s what’s driving this. All of these companies realized that they could only fleece Venture Capitalists but for so long and needed one tap into a new source of funding: pimple-faced 23 year olds with $100 and a Robinhood account. They all feel like they missed out on Apple, Amazon, Tesla, etc., so they want to get rich on the next big idea. Urban air mobility offers that perfect balance of jetsons, greenism, and perceived disruptor technology that’s irresistible to that generation. How do you think these start ups are literally getting billions of dollars.

    SPACs basically facilitate these start ups to publically trade before even a dollar of revenue is ever generated."