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Air Taxis Reach for the Skies

After decades playing supporting roles in sci-fi fantasies from “The Jetsons” to “Blade Runner,” air taxis are getting closer to takeoff.

Companies around the globe are testing dozens of models and working with regulators on certification. Most startups are developing battery-powered aircraft that look like a hybrid between a helicopter and a drone, so calling them flying cars is a bit of a stretch. That said, automakers including Hyundai and General Motors have invested a fair amount of money in the sector, even as it’s unclear which firms will come out ahead in what will be an expensive race for the skies.

Germany’s Volocopter is among those that are pretty far along. The startup backed by China’s Geely and Mercedes-Benz maker Daimler is aiming to start commercial operations in Singapore in 2023 and working with Paris authorities to whizz people over the city during the 2024 Summer Olympics. This week, the company unveiled its second air taxi, a longer-range shuttle complementing a two-seater model that’s already completed more than 1,000 test flights.

Volocopter CEO Florian Reuter told me that 15-minute flights from New York’s JFK Airport to Manhattan will in the medium term cost less than $100. That’s roughly in line with an Uber ride, but a much faster trip. The company has raised almost $400 million and hopes that automated flying backed up by a remote pilot, a first step to lowering trip costs, can be approved in the coming years.There are a few caveats, of course. Aviation authorities are known for being extremely careful, meaning getting the green light to fly over cities will take a lot of time and money. Just this month, Morgan Stanley lowered its forecast for the 2040 global urban air mobility market by $500 billion to $1 trillion, saying in a report that the industry has to climb a “regulatory Mount Everest.”

Many companies “may never see an aircraft reach commercial service,” Morgan Stanley analysts said.Still, there’s been no shortage of investor appetite for air-taxi startups recently, fueled in part by the SPAC boom. Volocopter’s German peer Lilium, which is developing an electric jet that’s supposed to ferry passengers between cities from 2024, will be taken public by a blank-check company started by a former GM executive. Joby Aviation, which has a strategic partnership with Toyota and last year bought Uber’s air-taxi operation, is going public via yet another SPAC deal. And then there’s Archer Aviation, a U.S. startup whose valuation rocketed from $16 million just over a year ago to $3.8 billion through a blank-check deal announced in February.

The SPAC craze comes with all the well-documented risks, especially as it’s happening in a very young industry without any meaningful revenues.

Archer, for example, recently secured a commitment from United Airlines for an order of $1 billion-worth of aircraft, but hasn’t yet test-flown a full-scale version of its air taxi. The company is also embroiled in a legal spat with rival Wisk Aero, a joint venture of Boeing and Google co-founder Larry Page’s Kitty Hawk, over claims of stolen technology. The company has denied the allegations and called the lawsuit baseless.

Volocopter’s Reuter said he’s keeping all funding options open, including SPACs. Either way, he said he’s bullish because the European Union Aviation Safety Agency is charging ahead when it comes to certifying the nascent industry. The EASA yesterday released a study showing that a majority of Europeans questioned broadly welcome the prospect of air taxis.

“Many market observers expect that we’ll fly autonomously before we’ll drive autonomously, also over cities,” Reuter said.

The new, super-quick iteration of Tesla’s Model S — the “Plaid” version Elon Musk had said would go into production around the middle of last year, then said early this year — finally has a delivery date. The CEO tweeted Thursday that the company will host a handover event at its California factory on June 3. Musk has billed the model as the quickest-accelerating production car, with a zero-to-60 miles per hour time under 2 seconds.

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