One trend that has become increasingly apparent in the past two or three years has been car manufacturers’ growing interest and investment in the burgeoning air mobility sector.
The prospect of diminutive eVTOL (electric vertical take-off and landing) aircraft – or, as they are often referred to, air taxis – ferrying a handful of passengers or deliveries from one city to another may still seem rather distant at present.
But hundreds of millions of pounds are being poured into eVTOL development, with a number of major automotive players now heavily involved in high-profile partnerships with aviation companies.
Given the industry is still very much at a nascent stage, with no guarantees as to how swiftly it may evolve, what is the motivation for car makers?
Obvious synergies
Just as the car industry is targeting a greener future, so is aviation, with 2050 the year earmarked for the global industry to fly carbon net zero.
This presents a chance for car manufacturers to leverage the learnings and technology they have acquired in the development of alternatives to the combustion engine – particularly in the area of electrification – in a new arena. There are potential synergies in battery development, for example, that could mean car companies will be able to assist air taxi manufacturers in reducing costs.
As Hyundai Motor Group executive vice president Jaiwon Shin recently explained: “Hyundai has successfully delivered hydrogen fuel cell systems to the global automotive market and is now exploring the feasibility of electric and hydrogen propulsion technologies for aerospace integration.”
Given that some eVTOL makers have already confirmed plans to produce thousands of aircraft, the car industry’s proven ability to manufacture at scale is an asset, too. Integrating best practices to facilitate efficient production is an attractive proposition for an ambitious eVTOL start-up.
And, of course, having invested massively in creating new cars for a new era, it’s fair to say car manufacturers believe air mobility offers a lucrative opportunity to recoup some of their phenomenal outlay.
The value of the eVTOL market
Just how lucrative is that opportunity? At this early stage, it’s impossible to say with any confidence, and this uncertainty was reflected in a 2021 research paper from Morgan Stanley that heavily revised figures originally published in 2018.
Four years ago, Morgan Stanley raised eyebrows with a bold prediction that the urban air mobility total addressable market (TAM) could be worth $1.5 trillion by 2040. But in May last year – in a report titled 'eVTOL/Urban Air Mobility TAM Update: A Slow Take-Off, But Sky’s The Limit', which perfectly sums up the current state of affairs – that was revised down to $1 trillion by 2040.
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