A few years ago most investors had never even heard of “air taxis.” Now they need to decide whether to board early movers with a high-altitude but low-definition view of the potential market, or else wait for the technology to land somewhere more specific.
On Wednesday, California-based Joby Aviation completed its merger with a special-purpose acquisition company. Its shares initially popped 40%, confirming that investors were counting the days until the first air-taxi company reached the stock market. They will soon get more options: Archer Aviation, Vertical Aerospace and Lilium Air Mobility also focus on electric vertical-takeoff-and-landing vehicles, or eVTOL, and are scheduled to close similar deals. Others may be waiting in the wings, such as the lesser-known Swiss startup Dufour Aerospace, which is putting a special focus on air ambulances.
For eVTOL vehicles, the most feasible road to success is to become a replacement for the world’s 23,000 commercial helicopters, which are on average 20 years old, noisy and unsafe. Air taxis under development have a similar range, and operators claim they will be up to 100 times quieter and at least three times cheaper to run.
But helicopters are only worth $50 billion, whereas analysts are dazzling investors with a forecast eVTOL market size of $1 trillion in 20 years’ time.
This is probably why most firms don’t market themselves as targeting the typical 100-to-250-mile helicopter trip. Instead, they envision a hypothetical “urban air mobility” market that competes with Uber. This seems fanciful beyond a few select routes—such as taking Wall Street bankers to JFK airport—because having to get to a landing pad would defeat the purpose of avoiding car trips.
