Flying taxi dreams in Europe falter as money runs out

One of the innovations at this year’s Paris Olympics was supposed to be the electric flying taxi service.

German Volocopter promised Its electric-powered two-seat plane, VoloCity, will transport passengers around the city.

It never happened. Instead, the company conducted test flights.

Although missing this deadline was embarrassing, a more serious problem was brewing behind the scenes – Volocopter was urgently trying to raise new investments to keep the company afloat.

Talks to borrow €100m (£83m; $106m) from the government Failed in April.

Now hopes are pinned on Chinese company Geely, which is in talks to acquire an 85% stake in Volocopter for $95 million in financing. According to a Bloomberg report. The deal could mean moving any future manufacturing to China.

Volocopter is one of dozens of companies around the world developing an electric vertical take-off and landing (EVTOL) aircraft.

Their device promises the flexibility of a helicopter, but without the cost, noise and emissions.

However, faced with the enormous cost of getting such new aircraft approved by regulators and then building manufacturing capacity, some investors are bailing out.

One of the most notable victims is Lilium.

The German company had developed A radical take on the EVTOL theme.

The Lilium 30 uses an electric plane that can be tilted in unison to oscillate between vertical lift and forward flight.

The concept has proven attractive, with the company claiming to have orders and memorandums of understanding for the purchase of 780 aircraft from around the world.

She was able to demonstrate the technology using a miniature, remote-controlled model. Construction of the first full-sized aircraft has begun, and testing is scheduled to begin in early 2025.

At the recent Farnborough Air Show in July, Lilium’s chief operating officer, Sebastien Borel, looked confident.

He told the BBC: “We are definitely burning money. But that is a good sign, because it means we are producing aircraft. We will have three aircraft in production by the end of the year, and we have also raised 1.5 billion euros.”

But then the money ran out.

Lilium was trying to arrange a €100 million loan from German development bank KfW. However, this required guarantees from national and state governments, which was never achieved.

In early November, the company placed its major operating business into insolvency proceedings, and its shares were delisted from the Nasdaq stock exchange.

Currently, work on the new aircraft continues, as the company works with restructuring experts to sell the company or bring in new investments. However, getting the new e-plane into production appears more difficult than ever.

The leading British player in the electric rotorcraft market is Vertical Aerospace. The Bristol-based company was founded in 2016 by entrepreneur Stephen Fitzpatrick, who also founded OVO Energy.

The VX4’s striking design uses eight large propellers mounted on thin, aircraft-like wings to generate lift. Fitzpatrick made ambitious claims about the plane, suggesting it would be “100 times” safer and quieter than a helicopter, for 20% of the cost.

The company has made progress. After completing its remote-controlled testing program, it began conducting pilot tests earlier this year. Initially, this was performed with the aircraft tied to the ground. In early November, it made its first untethered takeoff and landing.

But there were also serious setbacks. In August last year, a remote-controlled prototype was severely damaged when it crashed during testing at Cotswold Airport, after a propeller blade fell off.

In May, one of its key partners was engineering giant Rolls-Royce Withdrew from the deal To supply electric motors for aircraft.

Ambitions remain sky high. Vertical Aerospace says it will deliver 150 aircraft to its customers by the end of the decade. By then, it also expects to be able to produce 200 units a year and break even on cash.

But the company went through financial challenges He recently agreed A rescue deal with its largest creditor, US-based Mudric Capital.

Under the deal, Mudric will invest up to $50 million in Verticial, while at the same time $130 million of loans from Mudric will be converted into equity.

This would leave the US investment firm with a 70% stake in Vertical, while Mr Fitzpatrick’s stake falls from 70% to 20%.

“This comprehensive deal – coupled with the recent manned flight campaign… means that Vertical is positioned to be a winner in one of the most exciting technologies of the 21st century,” Fitzpatrick said in a statement accompanying the deal.

Amid the turmoil, one European project is quietly on track, says Björn Verm, who has a background in aeronautical engineering and flies fighter planes for the Swedish air force. He now works for Leeham Aviation Consultants.

And he says that The EVTOL project is underway at Airbus He is likely to survive.

The four-seat plane, called CityAirbus NextGen, has eight propellers and a range of up to 80 kilometers.

“This is a technology project for their engineers, and they have the money, and they have the knowledge,” Verm says.

Elsewhere in the world, other well-funded startups are having a good turnaround getting their planes into production. This includes Joby and Archer in the US.

Once the aircraft are produced, the next challenge will be to see if there is a profitable market for them.

The first routes will likely be between airports and city centres. But will they make money?

“The biggest issue when it comes to operating cost is the pilot and the batteries. You need to change the batteries several times a year,” Mr. Verm points out.

Given all the uncertainty and expense, you might wonder why investors would invest money in new electric planes in the first place.

“No one wanted to miss out on the next Tesla,” Mr. Verm laughs.