What is the current state of the EVTOL market?

Investing.com -- Investment research firm Bernstein provided the latest insights into the evolving electric vertical takeoff and landing (EVTOL) aircraft market, pointing to its potential for substantial growth.
Bernstein analysts project the global Urban Air Mobility market to swell from $5 billion to $24 billion by 2030, driven by the issuance of the first operating licenses expected in 2025. This is set to unlock low altitude commercial flights for the general public, marking a new chapter in transportation.
“The low-altitude economy includes transport, logistics, agriculture, and emergency services. With regulatory support and technology enablers, urban air mobility has the potential to disrupt transport through faster, more direct aerial pathways,” analysts led by Neil Beveridge said in a Thursday note.
The cumulative order backlog for EVTOLs has already surpassed 18,000 units at the end of 2024, reflecting a 27% year-over-year growth.
“The global helicopter market today has a total addressable market (TAM) of $40bn and with substantially lower costs we believe the EVTOL market alone can be several times greater,” analysts highlight.
Regulatory support has been instrumental for the EVTOL industry, with a wave of policies introduced since the latter half of 2023, including airspace classification and management rules, as well as local government funding and subsidies.
China’s Ehang Holdings (NASDAQ:EH) has achieved major milestones, becoming the only company in the industry to receive type, production, and airworthiness certificates from the Civil Aviation Administration of China (CAAC). EHang is also on the cusp of commencing commercial operations in China this year.
3rd party Ad. Not an offer or recommendation by Investing.com. See disclosure here or remove ads.Meanwhile, in the United States, Joby Aviation (NYSE:JOBY) and Archer Aviation Inc (NYSE:ACHR) have been making strides toward certification since the second half of 2024.
Technological advancements in battery technology, spurred by the electric vehicle (EV) sector, have also been vital for EVTOL development.
Improvements in energy and power density have enabled the feasibility of EVTOLs, with current battery technology supporting aircraft that can carry 2-4 persons over distances of up to 300km.
“Batteries will only get better as technology improves,” analysts said.
Forecasts by CATL suggest that by 2027 to 2028, an 8-ton civil electric aircraft capable of achieving ranges between 2,000 to 3,000km could be tested.
The affordability of EVTOLs is expected to democratize low altitude flight. Long-haul EVTOLs, comparable in selling price to helicopters at around $5 million, and multi-rotor designs for shorter ranges under 50km, are priced as low as $300,000 per vehicle.
EVTOLs could substantially lower trip costs to $0.5-1.5 per seat-kilometer compared to helicopters, which currently operate at $3-5 per seat-kilometer.
“Initially we expect the use case for EVTOL to be for tourism but will gradually be used for transportation in highly congested regions to enable faster travel,” Bernstein noted.
At the moment, the U.S.-based Joby Aviation leads the EVTOL OEM market with a valuation greater than $5 billion, followed by Archer Aviation and China’s EHang. EHang stands out as the first and only OEM to have commenced commercial deliveries of EVTOLs.
While most EVTOL OEMs are still in the certification phase and showing minimal revenue with high R&D costs, EHang boasts a 60% gross margin and is expected to double its revenue this year.
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