2024: “The Year Flying Taxis Take Off?”

Crys­tal ball gaz­ing is great fun, but rarely depend­able. While it is usu­al­ly hit and miss, on occa­sions a grow­ing weight of evi­dence offers more reli­a­bil­i­ty than a sim­ple stab in the dark. So, what of the Fly­ing Taxi indus­try? How will it fair in 2024?

BUMPS IN THE ROAD

Robin Riedel, a respect­ed senior ana­lyst at the McK­in­sey Cen­tre for Future Mobil­i­ty, sug­gests tur­bu­lence may lie ahead for the AAM indus­try. Dur­ing an inter­view with wearefinn.com, he says, “The advanced air mobil­i­ty (AAM) sec­tor proved remark­ably resilient in 2023 with sus­tained lev­els of fund­ing and many time­lines for test­ing being met, but there may yet be some bumps in the road dur­ing 2024.”

Riedel admits he is a naysay­er and scep­ti­cal about the future claims being made by the indus­try, yet is sur­prised by the advanc­ing tra­jec­to­ry of the mar­ket and what it has already deliv­ered. 

He says, “Everybody’s fly­ing, everybody’s pour­ing con­crete into facil­i­ties and so it was anoth­er year on tra­jec­to­ry and the rea­son I think that’s worth notic­ing is because a lot of peo­ple sug­gest­ed that 2023 would be the year where real­i­ty comes down on this indus­try and all of a sud­den we see a bunch of play­ers fail and run out of mon­ey, we would see reg­u­la­tors putting a stop to all of it, and none of that hap­pened.” 

Robin Riedel

Riedel points out recent eVTOL achieve­ments includ­ing Joby per­form­ing the first ever fly­ing taxi exhi­bi­tion flight in New York City; Volo­copter con­duct­ing a mul­ti-day flight test cam­paign with a crewed air­craft in the Japan­ese cities of Osa­ka and Ama­gasa­ki; and Lil­i­um start­ing pro­duc­tion of its jet.

“2023 was a good year for this indus­try,” he con­tin­ues. “We’ve seen a lot of progress on fly­ing, a lot of progress in the sup­ply chain, a lot of progress in reg­u­la­to­ry and even in pub­lic accep­tance.”

Yet, with the AAM mar­ket becom­ing increas­ing­ly crowd­ed ana­lysts, includ­ing Riedel, fear the indus­try may be reach­ing a crunch point in 2024, with con­sol­i­da­tion or some play­ers even exit­ing the mar­ket entire­ly.

He remarks, “There are a cou­ple of indi­ca­tors where you won­der, are we hit­ting a lit­tle bit of a speed bump? You can look at things like Rolls Royce divest­ing of its elec­tric pow­er­train busi­ness. And if you look at, for exam­ple, the hydro­gen devel­op­ers, the fund­ing that they’ve announced was sig­nif­i­cant­ly small­er than what peo­ple had orig­i­nal­ly pro­ject­ed.”

Riedel con­cludes, “I think the gen­er­al the­sis is to say look, we’re gonna have to see some peo­ple fail. We’re gonna have to see some con­sol­i­da­tion. We’re gonna hit some reg­u­la­to­ry cer­ti­fi­ca­tion hur­dles, I think all are things that are start­ing to creep in. And it will be very inter­est­ing to see what 2024 looks like.”

U.S POLITICAL TURBULENCE

A major dif­fi­cul­ty the eVTOL indus­try may face is the year itself. Grow­ing num­bers of peo­ple believe 2024 is a piv­otal polit­i­cal year for the West. A U.S Pres­i­den­tial elec­tion in Novem­ber looms and with the stakes so high, the doom­say­ers list a series of pos­si­ble Amer­i­can cat­a­stro­phes ahead includ­ing a crip­pling cyber­at­tack; a finan­cial eco­nom­ic melt­down or even anoth­er pan­dem­ic.

After a poster tweet­ed on X dur­ing New Year’s Day, “Can we just have a nor­mal year in 2024. Don’t we deserve that after 4 years of crazy?” Elon Musk per­son­al­ly replied, “2024 is gonna be even more crazy is my pre­dic­tion.”

The crux of the prob­lem. 

(Cred­it: Matejmo/Getty Images)

How can the grow­ing ani­mos­i­ty and polarised polit­i­cal views between the two main U.S par­ties be resolved, only height­ened by the polit­i­cal per­se­cu­tion aka law­fare, against the almost cer­tain Repub­li­can can­di­date? For whomev­er wins the elec­tion, claims of cheat­ing and vote rig­ging will echo loud which some believe could lead to riots and gen­er­al may­hem on the streets. 2024’s uncer­tain­ty might affect the progress of the eVTOL indus­try, espe­cial­ly with fund­ing.

Mean­while, there are tan­gi­ble signs law­fare is being aimed at Chi­na-based EHang, present­ly the most advanced and suc­cess­ful fly­ing taxi com­pa­ny in the world.

EHANG

While the West cel­e­brat­ed Christ­mas and the New Year, EHang was busy notch­ing up suc­cess after suc­cess includ­ing the first ever fly­ing taxi com­mer­cial flights that took place on Decem­ber 28th of its EH 216‑S over the Chi­nese cities of Hefei and Guangzhou, after being grant­ed the all-impor­tant and again first of its kind glob­al­ly, stan­dard Air­wor­thi­ness Cer­tifi­cate (AC) from the country’s CAAC.

Cer­tain­ly, EHang’s rev­enue streams will dra­mat­i­cal­ly increase dur­ing 2024 and this should have a pos­i­tive knock-on effect on its share price.

🚀Anoth­er Cer­ti­fi­ca­tion Break­through🚀
We are thrilled to announce that the #EH216-S pas­sen­ger-car­ry­ing #UAV sys­tem has suc­cess­ful­ly obtained the Air­wor­thi­ness Cer­tifi­cate from the CAAC and has been deliv­ered to cus­tomer in Guangzhou.#EHang is proud to be a pio­neer of… pic.twitter.com/BkDOcMxHF0

— EHang (@ehang) Decem­ber 21, 2023

✈️Guangzhou & Hefei, Togeth­er We Take Flight!✈️

Wit­ness the debut of com­mer­cial flight demon­stra­tions fea­tur­ing the cer­ti­fied EH216‑S air­crafts, which have obtained the Stan­dard Air­wor­thi­ness Cer­tifi­cates issued by the CAAC. This marks a major mile­stone towards nor­mal­iz­ing… pic.twitter.com/zJiHXZUi9H

— EHang (@ehang) Decem­ber 28, 2023

We always strive to bring joy and hap­pi­ness to our pas­sen­gers’ trav­el expe­ri­ence. @XHNews #EHang #EH216 #UAM #AAM #eVTOLhttps://t.co/5j7Vow7GJv

— EHang (@ehang) Decem­ber 29, 2023

Yet, no-one enjoys embar­rass­ment and the West must feel this as it watch­es a Chi­nese avi­a­tion com­pa­ny of only nine years stand­ing, not only win­ning the glob­al eVTOL race by a can­ter, but for the tech­nol­o­gy to be autonomous too, plac­ing EHang at least five years ahead of its West­ern com­pe­ti­tion. 

For America’s lead­ing fly­ing taxi com­pa­nies like Joby and Archer will only begin com­mer­cial flights in 2025 at the ear­li­est and their air­craft will be pilot­ed for some con­sid­er­able time.

Call it jeal­ousy, per­haps even envy, but shrieks of Chi­nese gov­ern­ment favouritism, weak air reg­u­la­to­ry prac­tice, lack of robust tri­alling and gen­er­al dis­trust are increas­ing and already law­fare against EHang has begun. 

The company’s vul­ner­a­bil­i­ty occurred after float­ing on the NASDAQ in Jan­u­ary 2020. The com­pa­ny raised USD46 mil­lion, and with a clos­ing share price on its debut of USD12.49, it gave EHang a mar­ket val­ue of around USD660 mil­lion.

Then its share price took off to extreme and frothy heights, lead­ing to the New York research com­pa­ny, Wolf­pack, to sys­tem­at­i­cal­ly col­lapse this price after pub­lish­ing a damn­ing report in Feb­ru­ary 2021, with the head­line A STOCK PROMOTION DESTINED TO CRASH AND BURN. The report accused the com­pa­ny of “a col­lec­tion of lies about its prod­ucts, man­u­fac­tur­ing, rev­enues, part­ner­ships, and poten­tial reg­u­la­to­ry approval”, and “built on large­ly fab­ri­cat­ed rev­enues based on sham sales con­tracts with a cus­tomer who appears to be more inter­est­ed in help­ing inflate the val­ue of its invest­ment.” 

In a nut­shell, this was a high­ly suc­cess­ful short­ing hit job lead­ing to investors los­ing a large bulk of their invest­ment. A fur­ther, but unsuc­cess­ful attempt was to fol­low last Novem­ber by U.S Hin­den­burg Research claim­ing sim­i­lar accu­sa­tions. They say there is no smoke with­out fire, so a one class action law­suit was filed last week rep­re­sent­ing EHang share­hold­ers who feel they were “adverse­ly affect­ed by alleged secu­ri­ties fraud between Jan­u­ary 20th, 2022 and Novem­ber 6th, 2023.” 

Bruce Crum­ley of DroneDJ writes, “Top­ping those, the appeal to aggriev­ed par­ties are state­ments EHang is said to have made about ongo­ing busi­ness with big U.S and UK firms that were pur­port­ed­ly ter­mi­nat­ed before­hand. It also states that announced con­tracts to buy its eVTOL air taxis were ascribed to clients almost cer­tain­ly not in a finan­cial posi­tion to be able to afford their orders.”

He con­tin­ues, “In a sim­i­lar move, San Fran­cis­co law firm Hagens Berman released an appeal to unhap­py investors to join anoth­er class action suit it’s prepar­ing against EHang. That includes the dra­mat­ic ele­ment of throw­ing doubt on the company’s air taxi Type Cer­tifi­cate in Chi­na, which it sus­pects will lim­it the eVTOL’s oper­a­tion con­sid­er­ably more than let on.”

Reed Kathrein, a firm part­ner lead­ing the inves­ti­ga­tion, com­ment­ed, “We are deter­min­ing whether EHang hid flight restric­tions that came with its high­ly tout­ed cer­ti­fi­ca­tion issued by the Civ­il Avi­a­tion Admin­is­tra­tion of Chi­na. We are also inves­ti­gat­ing whether the com­pa­ny lied to investors about its tech­nol­o­gy and book orders.” 

EHang has con­tin­u­al­ly refut­ed past charges of mis­lead­ing investors and has yet to be found at fault by either mar­ket or gov­ern­ment author­i­ties in both the U.S and Europe. The com­pa­ny has not com­ment­ed on the cur­rent law­suits being pre­pared.

In hind­sight, EHang float­ing on the NASDAQ was rather like a chick­en enter­ing a fox­es’ den. America’s recent stance could be inter­pret­ed: “If you want to knock out your com­pe­ti­tion use law­fare.”

After the dot­com bub­ble crash in 2000, where over 110 com­pa­nies involved in this spe­cial­ist sec­tor saw a major share price col­lapse, where some went bank­rupt and investors lost all of their mon­ey, not one com­pa­ny was suc­cess­ful­ly sued.

One step is for EHang to delist from the NASDAQ in 2024 and relist on one of China’s three main stock mar­kets. Then offer its west­ern investors an oppor­tu­ni­ty to car­ry over their shares. This way EHang should expe­ri­ence far less scep­ti­cism and avoid any fur­ther West­ern law­fare. Giv­en it is unlike­ly the U.S and even the EU will allow EHang to gain com­mer­cial trac­tion in their coun­tries, the Mid­dle East, Asia and South Amer­i­ca still offer tan­ta­lis­ing scope for com­pa­ny expan­sion lead­ing to an increas­ing share price val­ue.

PARIS OLYMPICS

Much has been writ­ten at evtolinsights.com about the Paris Olympic Games to be a pos­i­tive cat­a­lyst for the eVTOL indus­try. Abun­dant promis­es from the French Min­istry of Trans­port and Olympic organ­is­ers, with Ger­man-based Volo­copter wait­ing in the wings, where a pic­ture has been paint­ed of the VoloC­i­ty fly­ing ath­letes and the pub­lic around the Games, while watched by a poten­tial 4 bil­lion peo­ple on TV. Not for­get­ting, this glob­al event begins in just six months time.

But this dream was poten­tial­ly put in doubt in Novem­ber when news broke that the polit­i­cal­ly left-lean­ing Parisian coun­cil­lors had react­ed to the idea with a stun­ning neg­a­tive reac­tion call­ing the plans as “absurd” and an “eco­log­i­cal aber­ra­tion.” Dan Lert, a Deputy May­or of the Con­sul de Paris, went even fur­ther describ­ing such fly­ing taxi oper­a­tions as “a total­ly use­less, hyper-pol­lut­ing gim­mick for a few ultra-priv­i­leged peo­ple in a hur­ry.”

Volo­copter Suf­fers Two Recent Set­Backs as Com­pa­ny Vies to Pio­neer the Emerg­ing eVTOL Indus­try

What quick­ly became appar­ent was the igno­rance of the Coun­cil­lors con­cern­ing eVTOLs, espe­cial­ly when Par­ti Social­iste coun­cil­lor, Flo­ri­an Sit­bon, com­ment­ed, “To save a few min­utes for a few wealthy peo­ple in a hur­ry, who are igno­rant and con­temp­tu­ous of the cli­mate emer­gency, we would be pol­lut­ing the atmos­phere and destroy­ing the sound envi­ron­ment.”

While a wake-up call for the indus­try, the anti­dote is obvi­ous. Edu­ca­tion, edu­ca­tion, edu­ca­tion. 2024 must be the year when lead­ing eVTOL com­pa­nies put aside large amounts of mon­ey to edu­cate the pub­lic and local coun­cil­lors about the pos­i­tive aspects of fly­ing taxis via social meet­ings and events in the heart of towns and cities. This could include brief flight demon­stra­tions; oppor­tu­ni­ties for peo­ple to sit in an air­craft and expe­ri­ence a flight sim­u­la­tion; Q&As; as well as a wide-rang­ing media assault. 

It is still believed the French Min­istry of Trans­port will give the go ahead in late Jan­u­ary for VoloC­i­ty to fly at the Games, but the extent of its oper­a­tions is now under seri­ous review.

SUCCESSES AND FAILURES

Joby Avi­a­tion remains the No.1 fly­ing taxi com­pa­ny in the West to suc­ceed and 2024 offers fur­ther oppor­tu­ni­ties to build on its pre­vi­ous suc­cess­es. While Archer has the best PR machine in the indus­try, the com­pa­ny still has much to prove. Con­sis­tent and suc­cess­ful tri­alling of its Mid­night Air­craft is essen­tial through­out the year. 

Lil­i­um had an amaz­ing sec­ond half of 2023, prov­ing to its naysay­ers, the com­pa­ny is still a force to be reck­oned with. It may lack the invest­ment com­pared to some of its com­peti­tors, but Lil­i­um is a fight­er and refus­es to lie down. 

Joby Avi­a­tion — the most suc­cess­ful eVTOL Air­craft in the West

The real con­cern must be Bris­tol-based Ver­ti­cal Aero­space. With a share price so con­sis­tent­ly low that dis­qual­i­fi­ca­tion from the NYSE is a dis­tinct pos­si­bil­i­ty (a warn­ing was sent in late Novem­ber), Stephen Fitz­patrick and his team will look to restore con­fi­dence in the mar­ket square. Since the Pro­to­type VX4 crash last August dur­ing a tri­al, where a bond­ing issue with a pro­pel­lor was the cause, news about the aircraft’s progress has been scant. Investors must be con­cerned.

The crys­tal ball sug­gests con­tin­ued suc­cess for Beta Tech­nolo­gies; Volo­copter to gain Type Cer­ti­fi­ca­tion from EASA; and the con­tin­ued and resound­ing Mid­dle East mantra: “Be there or be square!”

What­ev­er hap­pens, 2024 will be anoth­er excit­ing year for all those involved in the fly­ing taxi indus­try.

(Top image cred­it — www.bssnews.net)