Volocopter
The VoloCity carried out demonstration flights in Paris this summer
One of the innovations of this year's Paris Olympics was supposed to be an electric flying taxi service.
German company Volocopter has promised that its two-seater electric plane, the VoloCity, will transport passengers around the city.
This never happened. Instead, the company conducted demonstration flights.
While missing this deadline was embarrassing, behind the scenes a bigger problem was playing out: Volocopter was urgently trying to raise new investment to keep the company running.
Talks to borrow 100 million euros (£83 million; $106 million) from the government collapsed in April.
Hopes now rest on China's Geely, which is in talks to take an 85% stake in Volocopter in exchange for $95 million in funding, according to a Bloomberg report. The deal could mean any future manufacturing would move to China.
Volocopter is one of dozens of companies worldwide developing an electric vertical takeoff and landing (EVTOL) aircraft.
Their machines promise the flexibility of a helicopter, but without the cost, noise and emissions.
However, faced with the enormous cost of approving these new planes by regulators and strengthening manufacturing capacities, some investors are withdrawing.
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Lilium's radical design involves jets that can be tilted for vertical takeoff
One of the most publicized victims is Lilium.
The German company had developed a radical approach to the EVTOL theme.
Lilium's plane uses 30 electric jets that can be tilted in unison to switch between vertical lift and forward flight.
The concept proved attractive, with the company claiming to have orders and MoUs for 780 aircraft from around the world.
He was able to demonstrate the technology using a remote-controlled scale model. Construction of the first large jets had begun and testing was expected to begin in early 2025.
As recently as the Farnborough Airshow in July, Lilium COO Sebastian Borel sounded confident.
“We are definitely spending a lot of money,” he told the BBC. “But it's a good sign, because it means we're producing the plane. We're going to have three planes in production by the end of the year, and we've also raised €1.5 billion.”
But then the money ran out.
Lilium had tried to obtain a loan worth 100 million euros from the German development bank KfW. However, this required guarantees from national and state governments, which never materialized.
In early November, the company placed its main operating activities into insolvency proceedings and its shares were delisted from the Nasdaq stock exchange.
For now, work on the new aircraft continues, with the company working with restructuring experts to sell the business or attract new investment. However, putting the new e-jet into production seems more difficult than ever.
Vertical Aerospace
The VX4 recently successfully completed takeoff and landing tests
The leading UK player in the eVTOL market is Vertical Aerospace. The Bristol-based company was founded in 2016 by businessman Stephen Fitzpatrick, who also set up OVO Energy.
Its striking VX4 design uses eight large propellers mounted on thin, airplane-style wings to generate lift. Mr Fitzpatrick made ambitious claims about the plane, suggesting it would be “100 times” safer and quieter than a helicopter, for 20 per cent of the cost.
The company has made progress. After successfully completing a remote-controlled testing program, it began conducting pilot testing earlier this year. Initially, these operations were carried out with the aircraft attached to the ground. In early November, he made his first untethered takeoff and landing.
But there have also been serious setbacks. In August last year, a remotely piloted prototype was seriously damaged when it crashed during testing at Cotswold Airport after a propeller blade fell off.
In May, one of its main partners, engineering giant Rolls Royce, pulled out of a deal to supply electric motors for the plane.
Ambitions remain dizzying. Vertical Aerospace says it will deliver 150 planes to customers by the end of the decade. By then, it also hopes to be able to produce 200 units per year and break even in terms of cash flow.
Yet financial tensions have intensified. Mr Fitzpatrick invested a further $25 million in the company in March. But an additional $25 million, expected in August if no alternative investment could be found, has not been paid. As of September, Vertical had $57.4 million on hand, but it expects to spend nearly double that amount in the coming year.
Hopes for the future appear to rest on an agreement with American financier Jason Mudrick, already a major creditor through his company Mudrick Capital Management.
He proposed investing $75 million in the company – and warned Vertical's board that rejection of his plan would inevitably lead to insolvency proceedings. But the move was resisted by Mr Fitzpatrick, who would lose control of the company he founded.
Sources close to the negotiations insist that a deal is now very close. The company believes that if a deal can be reached, it will unlock new fundraising opportunities.
Airbus
CityAirbus has a range of 80 km and can fly at 120 km/h
Amid the turbulence, a European project is quietly on track, says Bjorn Fehrm, who has a background in aeronautical engineering and has flown fighter jets for the Swedish Air Force. He now works for aerospace consultancy Leeham.
According to him, the EVTOL project underway at Airbus has a chance of surviving.
Called CityAirbus NextGen, the four-seater plane has eight propellers and a range of 80 km.
“This is a technology project for their engineers, and they have the money and the know-how,” says Fehrm.
Elsewhere in the world, other well-funded start-ups are struggling to put their planes into production. This would include Joby and Archer in the United States.
Once the planes are produced, the next challenge will be to see if there is a profitable market for them.
The first routes will likely be between airports and city centers. But will they make money?
“The biggest problem in terms of operating costs is the driver and the batteries. You have to change the batteries several times a year,” emphasizes Fehrm.
Given all the uncertainty and expense, you might wonder why investors are investing in new electric planes in the first place.
“No one wanted to miss the next Tesla,” laughs Mr. Fehrm.
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