Dozens, if not hundreds, of start-ups have designed ‘flying cars’ in recent years, testing prototypes for the future of urban mobility, in which air taxis are expected to play a key role.
Although start-ups bring a lot of innovation, disruption, and creativity to the table, they often lack the most important resource for turning a dream concept into a flying reality—money.
Sufficient financial resources are crucial to moving from a prototype, concept, or design phase into clearing regulatory hurdles in cities, air traffic regulation, and safety standards. Money is also the key to make one concept flying car into a fleet of, let’s say, air taxis that would transport passengers in and around cities.
Start-ups have raised money to build prototypes, but many of them lack the millions of dollars of additional funding to take the concept to the next levels—development, regulatory clearings, mass production, and ultimately, hopefully, a competitive service.
Private equity is backing some of the efforts in the flying cars market. Yet, the biggest backers of the various flying car start-ups could turn out to be the legacy carmakers—companies with very deep pockets and the capability to put a product into mass production.
Investing in flying car concepts could be the automotive industry’s next big bet on the future of mobility a decade or two from now.
Many carmakers are already investing in autonomous cars, self-driving capabilities, software, and technologies, aiming to move to the forefront of the driverless vehicle market in what looks like will be a crowded competition scene.
Investing in urban air mobility (UAM) could be the next logical move of carmakers which aim to keep up with the latest technology in mobility to be able to compete with Silicon Valley’s innovations.
“I think you’ll see strong investment from the auto world in the next 12 months,” Mark Moore, engineering director at Uber who leads the Elevate air taxi service, told Forbes’ Jeremy Bogaisky last week.
Some carmakers have already entered the UAM market, which could become a trillion-dollar industry in the future.
The autonomous urban aircraft sector could become a US$1.5 trillion market by 2040, Morgan Stanley said in a paper early this year.
“Urban air mobility represents business opportunities within infrastructure, fleet management, software, hardware and content, much like the opportunity for autonomous vehicles,” Adam Jonas, Head of Morgan Stanley’s Global Auto and Shared Mobility research team, said in the BluePaper.
“The impact of flying cars would only be limited by imagination,” according to Morgan Stanley.
Several automakers already invest in UAM, hoping not to be left behind in the race to the future of mobility. Some of those carmakers are partnering with major aerospace companies to explore opportunities in UAM.
At the end of last year, Audi, Airbus, and Italdesign presented a concept for a flying taxi combining a self-driving electric car with a passenger drone. The project was called “Pop.Up Next”.
And they weren’t the only ones.
Hyundai Motor Group appointed this September Dr. Jaiwon Shin, who had worked at aviation research and development at NASA for 30 years, as Executive Vice President and Head of Hyundai’s newly established Urban Air Mobility Division.
“The new team at Hyundai will develop core technologies that will establish the company as a driving force in urban air mobility, a sector that is expected to grow into a market worth USD 1.5 trillion within the next 20 years,” Shin said, commenting on his new role.
In early October, Porsche and Boeing signed a Memorandum of Understanding to explore the premium urban air mobility market.
“Porsche is looking to enhance its scope as a sports car manufacturer by becoming a leading brand for premium mobility. In the longer term, this could mean moving into the third dimension of travel,” said Detlev von Platen, Member of the Executive Board for Sales and Marketing at Porsche AG.
The fact that legacy carmakers invest in UAM signals that this industry could be recognized as a serious contender for the future of mobility, Uber’s Moore told Forbes.