The electric Vertical Take-Off and Landing (eVTOL) industry, celebrated for its promise to revolutionize urban mobility, faced a series of critical blows in 2024 as high-profile firms such as Volocopter, Lilium, and Vertical Aerospace struggled to keep their heads above water with rising costs of developing their products.
Volocopter Faces Paris Olympics Snub and Funding Issues
Germany-based Volocopter, known for its VoloCity eVTOL aircraft, intended to provide an electric flying taxi service for the 2024 Paris Olympics. However, the company could only perform demonstration flights and missed its deadline for passenger services.
Volocopter was quiet about its backroom skirmishes with funding, which started after failing to secure a 100m-euro loan from the German government in April. Hopes now appear pinned on a proposed $95 million investment from Chinese firm Geely, which may take an 85 per cent stake and potentially relocate future production to China.
Another German-based eVTOL company,
Lilium, came up with the design of a new aircraft powered by 30 electric fans which it would switch between vertical take-off and landing as well as forward flight. It hoped to capture 780 orders on its aircraft all over the world.
However after failing to get a € 100 loan from German development bank KfW, the firm went broke. In early November, Lilium filed for insolvency, effectively delisting the company from the Nasdaq exchange. Without new investors or a buyer while restructuring remains ongoing, further production is unlikely.
UK-based Vertical Aerospace is in a similar boat. Founded by Stephen Fitzpatrick, Vertical Aerospace has focused on piloted testing of its VX4 design. Although it successfully completed an untethered test flight in November, the company has suffered a series of setbacks in the form of crashed prototype in 2023 and Rolls Royce’s withdrawal from motor supply partnership in May.
Financial stress is already on increase with the injection of $25 million that Fitzpatrick himself injected earlier in the year to service a portion of the firm’s debenture interest that failed nonetheless. The injection by Jason Mudrick of Mudrick Capital Management offers $75 million, but has proven a problem for Fitzpatrick, who may end up losing control of his company as a result of the long-felt frustration in negotiations.
Consider the challenges of funding
Of course, behind these financial challenges, there are still projects that remain in stable ground. Airbus’ CityAirbus NextGen, which is a four-seater with an 80km range, and more continues to advance due to the firm’s solid engineering prowess as well as the funding that accrues to it. Several other startups based in the U.S. are also advancing, basing much of their progress on robust financial backing for advancing eVTOL technology.
The Future of eVTOL: Is a Profitable Market in View?Initially, the routes for eVTOL aircraft will probably connect airports with city centres, but operational costs-the high cost of pilots, then battery maintenance-pose difficulties. Investors are hoping for the next big aviation “next Tesla.” However, it is unclear whether any returns at all will be made in the eVTOL market.
