Billion-dollar exits, huge venture deals and more partnerships marked this year's landmark for the electric vertical take-off and landing industry. The pieces are in place for a chess board, which should be thought of as the setting of a chess board before a match. It is time to play.
It will be a make or break year for those developers who have publicly stated their intentions of hitting commercial operations by the year 2024. What will happen next year for the sector as a whole? There are some predictions and trends to look out for.
It is the year of put up or shut up.
The sentiment from experts, analysts and VCs we spoke to seemed to be that the FAA certification of the aircraft is a precondition for any company that hopes to get their aircraft off the ground.
The main story of 2022, according to the founder and partner at SMG, is certification. It is the year of put up or shut up.
Cecutta said that companies that want to enter service in 2024 need to start flying with the FAA by the end of next year in order to hit that target.
David Wyatt is a technology analyst at IDTechEx. He wants to see more aircraft in the air. To have something that is certifiable by [2024], they have to start getting substantial aircraft in the air and demonstrating the capabilities of those aircraft.
He said that the companies who have raised the money would want to see a real ramp up in prototyping. They need to demonstrate to investors that they can build these aircraft and get them through flight certification.
The automakers are serious.
Many of the biggest players in e VTOL are startup companies, but they aren't the only ones looking to take advantage of the potentially huge market for air taxis, drone deliveries or other applications of electric aviation.
The concept of e VTOL by Honda andHyundai will be shown at the 2020 Consumer Electronics Show. It spun out its urban air mobility division into a separate business arm at the end of the year, with the goal of bringing an aircraft to market in the year 2028.
Major investments in Joby and a manufacturing deal with Archer were both made by Toyota and Stellantis. Cyrus Sigari, co-founder and managing partner of UP Partners, said that there could be other auto companies announcing their own e VTOL projects next year.
He said that he wouldn't be surprised if Ford or GM moved in 2022.
There are more SpACS.
In part one of our retrospective, we mentioned that the year of the SPACs was 2021. There was a noticeable increase in the use of this financial vehicle across the electric mobility space. The high capital demands of aviation could mean more startups are still looking for a huge injection of cash via the public markets.
The president of the venture capital arm of the airline said that SPACs may be the best way to raise capital and access public markets for pre-revenue companies.
She said that it was always a possibility that they could just continue to do venture rounds and raise more capital that way.
There is room for two more SPACs next year. I am pretty sure that it is not going to be zero if the number is greater than five. We don't have a global financial crisis.
The public market may be a bit less interested in aviation technology. At the end of November, air taxi developer Volocopter canceled its SPAC plans due to an extremely unfavorable environment for SPACs, according to a German publication.
There is always potential for more SPAC deals, but I guess we will have to see if the Volocopter deal falls through is a sign of a general cooling of interest towards those kinds of deals.
One thing that most experts didn't mention was the fact that consolidation has hit other hot tech industries like self-drive vehicles. Cecutta said that with time it will be inevitable that there will be consolidation.
The omission suggests that the industry has not yet reached the peak of the hype cycle for emerging technologies, which suggests that despite the crazy cash flow and growing fanfare, there may still be a rocky road ahead.
