Private equity professionals expect strong eVTOL order books followed by market consolidation

In 2021 there were approx­i­mate­ly 6,850 eVTOL orders, includ­ing firm orders, options and let­ters of intent, worth around $26.1 bil­lion accord­ing to McK­in­sey & Co, but new research from Hori­zon Air­craft reveals that by 2025, 66% of ven­ture cap­i­tal and pri­vate equi­ty pro­fes­sion­als expect the industry’s order book to be over 8,000, while 16% believe it will be more than 10,000.

Hori­zon Air­craft com­mis­sioned the mar­ket research com­pa­ny Pure­Pro­file to sur­vey 100 senior pri­vate equi­ty and ven­ture cap­i­tal pro­fes­sion­als, with respon­dents based in the US, Cana­da, UK, Aus­tralia, New Zealand, Chi­na, Hong Kong, Ger­many, and the UAE. The sur­vey was con­duct­ed online in Novem­ber 2022.

The study found that pro­fes­sion­al investors expect manned advanced air mobil­i­ty air­craft to con­tin­ue to dom­i­nate the order books. They account­ed for around 80% or orders in 2021, and by 2025, 72% of pri­vate equi­ty and ven­ture cap­i­tal pro­fes­sion­als pre­dict they will account for between 80% to 90%. One in five (21%) said they will make up around 80% of orders, and just 4% said it will be less than this.

How­ev­er, despite a grow­ing order book, 86% of the pri­vate equi­ty and ven­ture cap­i­tal pro­fes­sion­als inter­viewed expect the rate at which eVTOL con­cepts, cur­rent­ly around 700, go defunct over the next three years to increase.

Twen­ty two per­cent antic­i­pate a dra­mat­ic rise but a fall in the num­ber of manned advanced air mobil­i­ty com­pa­nies by 2025. There are cur­rent­ly around 300 of these com­pa­nies, but in three years time 69% of pro­fes­sion­al investors sur­veyed said the num­ber will fall.

Around 18% think there will be 150 or few­er, and 31% believe there will be between 200 and 250. One in five (20%) antic­i­pate there being between 250 and 300 manned advanced mobil­i­ty com­pa­nies.

Hori­zon Air­craft CEO Bran­don Robin­son revealed: “As the eVTOL mar­ket devel­ops, the industry’s order book is expect­ing strong growth, but our research clear­ly shows there is also expect­ed to be sig­nif­i­cant con­sol­i­da­tion in both the num­ber of com­pa­nies in the sec­tor and pro­to­type air­craft.”

Hori­zon Air­craft, and its Cavorite X5 eVTOL are enjoy­ing strong progress with sev­er­al grants, a US Depart­ment of Defence research and devel­op­ment con­tract award, and a fly­ing large-scale pro­to­type.

Horizon’s Cavorite X5 will fly 98% of its mis­sion in a low-drag con­fig­u­ra­tion like a tra­di­tion­al air­craft. The full-scale air­craft will also be pow­ered by a hybrid elec­tric sys­tem that can recharge the bat­tery array in-flight while pro­vid­ing addi­tion­al sys­tem redun­dan­cy.