Supernalism: Hyundai’s AAM theory

Deep Dive

Access to the automotive supply chain will play a big role in the success of an eVTOL OEM.

Frontrunners like Joby and Archer have tapped up the expertise of Toyota and Stellantis respectively. But sat, you could say in the background (and firm believers in second-mover advantage), is Supernal – Hyundai Motor Group’s AAM play.

“Being connected to an automotive giant and its automated manufacturing technologies is absolutely key to our plan,” Matthew Sattler, head of Business Development, tells us. “In aviation, even when we are talking about high-rate production, we are basically talking about a few hundred units per year – maybe into the thousands. Which is incredible for things that fly. We believe aviation has to follow many of the examples set by automotive and that idea forms a critical part of Hyundai’s thesis on this space.”

As human civilisation has evolved over the past 50 or so years, we have seen a dramatic shift of people moving from rural regions into cities, which has translated into massive urban growth and the creation of megacities. US-based with a Korean parent, Supernal is building a five-seat, four-passenger eVTOL targeting trips of 10-50 miles. The vehicle is expected to be able to fly up to around 60 miles (100km) at speeds of up to 120mph at altitudes several thousand feet high. The first commercial flight has been penned for 2028.

“Nowhere knows this better than Korea,” says Sattler. “So, ground-based vehicles are a part of the solution and continue to be a critical part of the transportation infrastructure. But we also need to think beyond that. That is where I think the advent of new technologies allow us to realise we can take existing assets and start to think about using them in a different way. Look at transportation network companies like Uber, Grab or Lyft. These are great examples of making use of assets that were under-utilised.

“We see these trends and we realise people don’t live in the same way as they did in the ‘70s when we built the Hyundai Pony. So rather than reacting to that, we want to be a part of shaping that future,” he adds.

Hyundai Motor Group is made up of more than 50 companies with investments across autonomous driving, AI, UAM, smart factories and robotics. Supernal is just one of a number of future mobility bets, others include Boston Dynamics and autonomous carmaker Motional. As of 2022, Hyundai is the world’s third-largest automaker in terms of production (behind Toyota and Volkswagen). It also has world’s largest auto production plant based in Ulsan, Korea.

“For this play to be interesting for the group we believe scale is a critical part of that,” explains Sattler. “Being a second-mover in this space allows us to do a few things. One, it allows us to build the competencies of building an aircraft programme thoroughly ahead of time. It also positions us to be able to enter the market and scale and maintain that focus.” Compared with an early prototype and test through iteration approach, Sattler says Supernal wants to enter the market ready to go.

Scale can be hard to quantify. Despite automotive’s involvement in the sector, car and aircraft production are very different things. It is a word that has been bandied around a lot in the eVTOL sector alongside varying delivery numbers and flight volumes. Archer has revealed plans to produce 500 units in 2026 and 650 units in 2027. Joby claims that by 2026 it will have 963 aircraft producing revenue with annual aircraft production numbers upping from 19 this year to 550 by 2026. Sattler suggests looking at scale another way – maturity of technology. Which all ties back into the second-mover advantage theory, Sattler explains.

“In the US we have not yet certified a multi-rotor eVTOL aircraft,” he says. “We expect to be able to learn from the challenges associated with that process and hopefully avoid many of the challenges of early production by seeing some of our competitors go through that in advance.”

Being a second-mover helps if you are doing things for the first time. Inexperienced in certifying aircraft (Hyundai’s eVTOL will be its first), the decision was made to base Supernal in the US and hire from the domestic aviation industry. “In effect, bringing together the best of both aviation and automotive. I think that starts with our CEO Jaiwon Shin, who spent his career at NASA before joining,” says Sattler.

The other part of Supernal’s second-mover plan relates to batteries. There is little debate that batteries are the single greatest challenge eVTOL OEMs need to solve in order to achieve meaningful distances. Some reports claim batteries need to improve by as much as 20x to reach the demands of pure-battery electric flight today. “Battery technology is improving at a pretty remarkable rate, essentially doubling cell performance every two to three years or so. The advantage of being a second-mover in this space allows us to design around future performance enhancements and integrate them into the aircraft programme as and when available.”

When talking about aviation, Hyundai is not the name which first comes to mind. Supernal knows this, but it also knows its parent is good at a lot of things. Yesh Premkumar, Supernal’s head of Product, Aircraft and Ecosystem, surmises the plan succinctly: “We are looking to partner in all the areas that we are good at. There are lots of things about aviation that we need to learn and understand. There are capabilities that we bring that we’d like to lend to the knowledge that exists.”

Aircraft OEMs have to decide whether they want to vertically integrate and produce all of it in-house or go out to market and integrate off-the-shelf solutions into their design. Both come with positives and negatives and Supernal is doing a bit of both, explains Sattler. “I think the advantage of being able to develop everything from scratch is that you don’t have to start with the bias of what another is telling you is the edge of the envelope. You can truly model from zero to one and I think that kind of thinking does breed innovation. The flip side of that is the reason aviation incumbents tend to hold on to market power is because it is so difficult to certify new aircraft.

“I would expect you will see the AAM industry’s strategy evolve over time, where we initially partner strongly and then could consider building some of these competencies in-house,” he says. Such an approach will also incrementally lower the unit economics on both the build and operations. Hyundai Motor Group is an expert at doing things in-house, with shipping firm Hyundai Glovis and Hyundai Steel it controls the entire value chain.

Hyundai Motor Group has committed $1.5bn to develop Supernal’s eVTOL as part of a $52bn investment across electric mobility technology. It also announced it has invested $1.02bn in global startups in the electrification, artificial intelligence (AI) and autonomous driving sectors from 2017 to January this year – not including Supernal, Boston Dynamics and Motional.

Hyundai knows how to bring a new product to a new market. The 168,882 sales it recorded for its Pony Excel back in 1986 stands as the record for most sales of any model from a new brand in the US to this day.

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