‘The first eVTOLs will form a beachhead industry’ and there is nothing wrong with that

Deep Dive

credit: Ashish Laddha

Batteries, load factors and utilisation. Sounds like the start of a decent joke if you’re in the electric aircraft business. 

They’re also the biggest limiting factors to the success of the early electric vertical take-off or landing (eVTOL) aircraft industry. Overcoming them could bring passenger costs per mile down from about $3.50 to $1.50 as identified in the Eve Air Mobility and MIT paper Demand Potential for Urban Air Mobility (2020). By symbiosis creating the market demand required to scale production to meet said demand.

This article explores how these factors will limit the first generation of certified eVTOL aircraft and the possible solutions to overcome these barriers as the industry broadens.

Battery limitations

The greatest limitation in the aircraft itself is the battery pack. There are a growing number of next-generation battery cell chemistry technologies in development (more on that later) but lithium-ion is the choice of the vast majority of eVTOL startups. Depending on the mission profile of the aircraft the usable life of its battery pack –when the full capacity of the battery reaches about 80% of the original – could last anywhere between 500-5,000 cycles using today’s technology, according to experts Revolution.Aero consulted. The more likely figure for a first-generation eVTOL is 600-1,200 cycles – which could get expensive for operators depending on the mission profile.

“For four or five years now, I have been saying this first generation of eVTOL aircraft is essentially a beachhead. It is the process of breaking in and trying to create something new or put a new spin on something old,” Gaetano (Tom) Sciortino, Cuberg’s head of Certification told us. “In general, they are not doing something dissimilar to helicopters, with some having airplane advantages. It is going to be interesting to see if theory meets reality.”

It is important to note that Cuberg is one of the aforementioned next-generation battery chemistry developers. The US-based firm is a subsidiary of Northvolt in Sweden and is working on a lithium metal anode chemistry with a proprietary liquid electrolyte that promises to be lighter and more energy dense than today’s lithium-ion chemistries.

A big issue with lithium-ion batteries is that the cell chemistry is not optimised for instantaneous power demand. Despite building to aerospace standards most lithium-ion aircraft batteries are developed using the same chemistry as batteries made for electric road vehicles.

“Think about that. Most people don’t stomp on the gas pedal every time they accelerate. It is usually much gentler in comparison to what a helicopter needs to do. Then translate that over to an eVTOL, there is a pretty heavy power demand at take-off and it’s probably sustained for longer than you would see in automotive applications,” says Sciortino. There is an equally heavy power pulse for landing too, but due to the battery being somewhat discharged it will be drawing at a higher amperage rating because the voltage is down. “That is heavy demand on a lithium-ion battery and can impact overall cycle life.”

Another problem eVTOL OEMs have is the ability to know with extreme accuracy how much charge there is left in a battery at any given time. Tolerance – the acceptable range within which specific characteristics of the battery can vary without impacting its overall performance – is required. A little is lost for safety’s sake and then reserve requirements need to be added. All of which can put serious limitations on range of the aircraft. “I think the range of these first-generation aircraft are not going to be what was expected seven or eight years ago. They will be working most of their charge during most of their flights. That then creates a problem to come up with a mission profile that doesn’t overtax the lithium-ion batteries,” says Sciortino.

Utilisation and load factors

When Cuberg’s head of Certification started out in aviation he worked for a New York City-based helicopter operator which flew sightseeing tours and charter flights. At its height the company had anywhere from a dozen to 20 helicopters flying in and out of Manhattan and the lower Tri-State area every day. The hardest working of those helicopters would leave base at 8am and return at 8pm, clocking up around 100 hours per month, or 1,200 per year.

“That was in 1980. At that time we would charge between $60-80 [$228 in today’s money] for shorter flights and about double that for longer sightseeing flights,” says Sciortino. “We had busloads of tourists and it was a matter of as fast as we could unload and reload passengers was how long until we were back in the air again. This makes me confident in New York as a business model for that 1,000 to 1,200 flight hours per year – maybe 1,500 if you’re pushing it with multiple crews.” 

Utilisation of an aircraft is a key piece to ensuring profitability for the operator. At the launch of eVTOL services, most passengers will use eVTOLs as a substitute for other modes of transportation – aka substituted demand, as defined in the Eve Air Mobility and MIT paper Demand Potential for Urban Air Mobility. The paper highlighted, from a profit maximisation perspective, eVTOL operators would try to aim to maximise the utilisation of their assets and serve markets with the highest willingness to pay. This translates into a limited number of geographies and mission types centred around large metropolitan areas and major transportation hubs in places where your average traveller has got enough money to spend it on time savings.

In reality, the required recipe for success probably only exists, at least initially, in regions such as the United Arab Emirates (UAE). Leading eVTOL developers Joby and Archer have identified this (amongst other reasons) and plan to launch services in the country – likely before either launch in the US.

“In markets such as North America or Europe, I can imagine the first-generation eVTOLs operating to the edges of cities  – connecting people in the periphery of cities to transportation hubs such as subway or rail lines. It is markets such as Dubai where we might see different models, potentially with services within the cities,” Florian Allroggen, executive director Aerospace Climate & Sustainability and a research scientist in MIT’s department of Aeronautics and Astronautics and a co-author of Demand Potential for Urban Air Mobility tells us.

“Another potential key market is airport access. This is because a traveler typically has substantial time sensitivity; the practicality of such services will depend heavily on the airport. If you take Boston, the layout of the airport and its proximity to the city make eVTOL access very hard and restrict scale. For other places where the airport is a further out from the city, I am thinking Munich or Dallas, and the airport layout is different, this is can be more realistic. Successful implementation would rely on being able to build vertiports at central locations in the cities which will encounter issues from a public acceptance perspective [see public acceptance article here].”

The paper’s analysis found that price elasticity is lower on airport routes. Today, this market is served by on-demand helicopter services such as Uber Copter, or Blade in some metropolitan areas. Airport access flows also tend to be fairly steady during the day, and UAM operations currently cater to higher income leisure and business travellers with a high value of travel time savings (VTTS). The high cost and inconvenience of missing a flight further increases the VTTS of airport travellers, making UAM attractive versus ground transportation for that demographic. Keeping fares consistent is a key part of the utilisation and load factor equation, and both rely on each other to varying degrees.

“The question you need to ask an operator is: How can you mix market segments so you get to a model that actually covers cost and leads to decent vehicle utilisation? The commuter market is nice because you have predictable and sizeable flows The problem is the peaks and troughs for which you have to size your fleet and infrastructure. What do you do with all of the capacity during the hours when you do not have to meet peak demand? With eVTOLs because they’re small yet relatively capital intensive that alone can be a problem,” explains Allroggen.

Mixing markets – shuttles and air taxi services – might be the answer to creating a profitable business model, but it presents another question that needs answering. How do you find mission profiles with symmetric demand? There is historical precedent for not finding it: asymmetric traffic patterns were a key contributor to Concorde’s lack of profitability.

The majority of eVTOL platforms feature a four-passenger layout with one pilot. So whilst it might be feasible for an aircraft shuttle to fill up one way, there is no guarantee there will be the same number of passengers waiting on the other side ready to go. This is especially true of travellers with a high VTTS. And it will be even harder when flying on-demand air taxi services where the load factor is lower.

It appears the FAA agrees. The agency recently issued its FAA Aerospace Forecast 2024-2044, weakening the air taxi business case. The assumed average load factor for a four-passenger, one-pilot eVTOL flying airport shuttle trips is three passengers. However, the air taxi is expected to have a much lower passenger load factor of one due to “on-demand nature of services and associated mobility flexibility” – about the same as a ground taxi at 1.3. The FAA’s forecast assumes that it will be challenging to pool multiple passengers for the same trip when operating on-demand taxi services, given passenger expectations for direct transit without delay. Highlighting the suitability of a four-passenger eVTOL for Part 135 shuttle services and the lack of suitability for the same aircraft operating on-demand air taxi services. And it means smaller one or two passenger aircraft (think Volocopter’s V2X) make more business sense for on-demand air taxi operations.

Keeping the beachhead away from the cottage 

Uber Elevate’s 2016 white paper stated: “If VTOLs are expensive, then the market size will be limited due to poor value for consumers, which feeds back to further limit vehicle production. This snowballs into VTOLs being a cottage industry for the wealthy not unlike Lamborghinis.”

Hourly operating costs for helicopters can vary greatly on the type and mission profile. For an air taxi service using a single-engine helicopter, costs fall around the $1,000 per flight hour mark. The cost breakdown looks like fuel 30%, maintenance 40%, engine reserves 15% and pilots & other fixed costs 15%.

Maintaining high rates of vehicle utilisation is a key assumption in Uber Elevate’s operating and economic models. eVTOLs should have very low direct operating costs due to low energy use, but the battery pack, particularly recharging wise, plays an important role in how many hours the aircraft is available to fly. As does utilisation and load factors.

Uber’s example mission was two 50-mile trips, along with a wait time of 10 minutes per stop with rapid charging during wait times. The battery is assumed to be 140 kWh capacity to permit both trips prior to recharging, with enough energy for IFR reserves of 30 minutes at minimum cruise power and a short detour to an alternate landing location. After the two trips, the aircraft would recharge a minimum of 30 minutes before conducting additional trips. All in all, the paper assumes a design life of 25-27,000 hours for the VTOL to permit 13 years of service, flying 2,080 hours per year while using a battery pack with a 2,000-cycle life.

In reality, Cuberg’s Sciortino doesn’t think first-generation eVTOL battery packs will reach 2,000 cycles or that the aircraft will hit the 2,000 hours utilisation per year mark, but that doesn’t “throw economic formula out of the window”, he says.

Sciortino is backing the concept of energy-by-the-hour battery leasing solutions similar to those on offer for conventional aircraft engines in operation today. First launched by Rolls-Royce in 1962 to support the Viper engine on the de Havilland/Hawker Siddeley 125 business aircraft, the concept offers complete engine and accessory replacement on a fixed-cost-per-flying-hour basis.

Translated to battery packs, this would see operators pay an hourly rate and when the battery reaches the end of its useful life, a replacement will be ready to go. “I think that’s a good financial proposal for both parties. The operator does not have to front a new battery cost on a relatively regular basis. Whilst the company offering energy by the hour can take that old battery, which still has 80% of its health, and use it in other applications,” says Sciortino.

Elsewhere, US-based electric aircraft developer BETA Technologies is working closely with battery recyclers to recover raw materials from depleted batteries for use in new battery manufacturing. The firm is beginning to look at programmes for the redeployment of viable decommissioned batteries into its charging infrastructure and other secondary applications.

“We’re actively engaged in conversations to explore emerging circular waste options and secondary uses for all end-of-life materials – from batteries to carbon fibre, and metals,” a spokesperson for BETA told us.

Changes to the battery chemistry will also solve today’s problems, Sciortino explains. “Many of the companies in North America and Europe that are in the later stages of certification are all doing heavy research on what they can do for their next-generation aircraft. So they’re talking to us, and other companies, on the potential new batteries could bring them.” Cuberg is developing a lithium metal battery chemistry which can operate at a much higher temperature than lithium-ion and is more tolerant to large, sustained power draws. This suits an eVTOL, especially on the lower end of the charge, which requires more power to be drawn creating higher levels of heat. “I see next-generation cells bringing a 50-100% increase in range. If you have one-hour-thirty-minute range you can do two or three 20 minute flights and remain well within the capacity of the battery. Which should also increase the overall cycle life,” says Sciortino.

BETA feels similarly, but the company notes eVTOL aircraft will offer new opportunities from the get-go, creating a stronghold before entering the broader market. “There’s no question that electric aviation will continue to get better and better as battery technology, public acceptance, and industry comfort continue to improve – but electric aviation will bring significant benefits to operators on day one. To understand how to maximise that value and stay ahead of the curve on the technological developments in the battery cell industry, we recently opened up a state-of-the-art battery facility where we are actively testing current batteries, while simultaneously evaluating and analysing next-generation battery cells.”

Symmetric demand and keeping costs down

Presenting solutions to utilisation and load factors is more difficult. Because the capital cost is so important, costs and therefore pricing are highly dependent on utilisation. There is a general principle that load factors and utilisation are lower for smaller aircraft. In addition, a lot of traffic proposed for eVTOLs is one way.

A potential answer is to find uses cases that offer reliable symmetric demand. Although few and far between, some examples do exist. One example is Jeddah to Makkah during Hajj pilgrimage seasons in Saudi Arabia. The route was announced in January 2024 by Mohammed Al Qahtani, CEO of Saudi Arabia Holding and is set to use German eVTOL developer Lilium’s aircraft. “Saudi Airlines is gearing up to launch flying taxis as an innovative mode of transport for pilgrims during the Hajj seasons. These electric aircraft, characterised by their VTOL capabilities will transport passengers from King Abdulaziz Airport in Jeddah to hotels in Makkah,” said Al Qahtani. The Hajj to Mecca in Saudi Arabia is considered the world’s largest human gathering, around 1.84m pilgrims made the journey last year.

The obvious solution is to keep price points low. At $1.50 per passenger per km analysis published in the Eve and MIT paper found passenger demand would increase 97% from a price point of $3.50 per passenger per km. However, this requires an eVTOL network operating at scale which will rely on years of operations and the realisation of a range of associated factors such as a huge production ramp up to establish. No help at all for first-generation eVTOLs entering commercial service, but it is viable to predict that with gradual scale-up, over time, volume can be built up resulting in lower operating costs and increased load factors that can justify more and more infrastructure.

Eight years on the concept proposed by Uber Elevate remains difficult to visualise in reality without thinking years off into the future (just as the paper did in 2016). However, the paper concludes its findings with the assumption that an urban air transportation ecosystem will only be successful with the participation of all parties – OEMs, city and national officials, regulators, users and communities – all keen to interact with one another to understand how the future mobility ecosystem can be shaped.

Revolution.Aero certainly agrees. It is within those micro-environments (regions, like the UAE, where all parties are willing to work together and government and regulator are particularly willing to make things happen) where initial operations will have the best chance of gaining a foothold in the public transport ecosystem. There an initial stronghold can be created before entering the broader market.

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