In the past couple of years, far too much digital ink and far too many investment dollars have been wasted on origami electric vertical takeoff and landing nonsense. Evtols, especially the ones that fold, are typically rushed prototypes that have no path to certification without US$1.5 billion in funding, a decade, a change of owners, a change of engineers and a radical reinterpretation of their business case.
Nothing has changed in the two years since I wrote that Vertical Take-Off Air Taxis Are A Solution In Search Of A Problem. The market size is still tiny and in decline. Unmanned aerial vehicles (drones or UAVs) are eating the bottom end out of the already not very big commercial rotorcraft marketplace. Transit is still vastly higher volume, cheaper and safer for getting to airports. Evtols won’t put the tiniest of scuffs in urban congestion. If UAVs start delivering organs from airports to hospitals, they’ll be relatively small cargo drones, not ones that ferry humans about, further undercutting that already small market. Crop dusting and tree planting markets are being eaten by big drones that still only top out at about 200 kilograms fully loaded.
And the field is littered with SPACS, special purpose acquisition corporations, an old American investment tool repurposed as a pump and dump vehicle to replace ICOs and IPOs. That’s true for all American clean tech, where SPACs have been a blight on the space, sucking retail investors dry, spending money and hype cycles on nonsense technologies like Energy Vault and generally making everyone feel a little dirty. As of the end of 2021, pure play evtol firms that went the SPAC route had lost US$16 billion, about 60% of the peak pump and dump valuation. Now it’s much worse, with a couple of them delisted because they lost so much value, and the others worse off.
And the solution set — complex folding aircraft that convert from vertical flight with rotors to horizontal flight with lifting surfaces and back — is effectively uncertifiable with civil aviation authorities like the FAA and EASA. It’s likely in the range of US$1.5 billion to certify a novel, folding body rotorcraft, and none of them have that kind of money, especially after the SPAC money people left with big chunks of the proceeds. Aviation isn’t a space where creating a prototype without thinking about certification first, second and third pays off. Quite the opposite.
Most of the founders seemed to have had no clue that certification of passenger aircraft was even a requirement. The Vertical Aerospace founder admitted that earlier this year. No wonder Vertical is delisted from stock exchanges. For context, civil aircraft certification is an n-times-n safety exercise, with every combination of potential failure conditions needing to be tested in flight tests. The more novelty, the longer the certification process. Evtols have novel flight characteristics, novel air frames, novel engines, novel autonomous flight software and novel batteries. All of that novelty makes them fun to look at, but only in the same way that people like looking a fun house mirrors but wouldn’t want one in their homes.
The business cases were usually highly inflated nonsense. Normal rotorcraft that have been around for decades require 4-5 hours of maintenance per hour of flight time, even for new ones. There’s nothing magical about origami rotorcraft except that they replace one type of complexity with other types of complexity. There’s no reason to think maintenance requirements won’t be identical. Yet business cases for this class of Jetsons fantasy aircraft assumed near constant flying with virtually no maintenance.
There was exactly one bright light in this morass of technical nonsense, and it’s just different nonsense. Chinese startup Ehang went simple. It’s basically a massive octacopter, with propellors sticking out in eight directions. It doesn’t bend or fold or convert from rotors to lifting surfaces, it just beats the air into submission like normal helicopters. Inefficient for any distances, sure, but a proven and practical mode of flight.
I referred to it as a customer Cuisinart in 2021 for good reason. Scaling up a quadcopter or hexacopter form factor to human-passenger size is a reasonable idea, but small quadcopters are designed for humans to reach down to them from above, so putting the payload mostly on top makes sense. Scaling it up and having humans walk through a field of 16 knee height propellors to get to the doors makes about as much sense as anything in this deeply silly and vastly overhyped aviation niche.
But it did go with deep simplicity. The only moving parts are the doors and the blades. The flight control system was pretty much the same as used in drones you can buy over the counter, just increasing or decreasing the speed of the eight motors with computerized control systems to make it go up, down, forward backward or sideways. No space for a pilot because that’s just weight and complexity. No internal controls for passengers because it was going to be ‘autonomous’.
But that simplicity meant that it actually reached certification with China’s civil aviation authority, the Civil Aviation Administration of China (CAAC). That was big news in a lot of places, including on the pages of CleanTechnica (which should know better).
I assumed it was a nothing burger of a certification and subsequent details have come out making that very clear. Let’s contextualize this a bit.
Both Mast Reforestation (née DroneSeed) and Hylio operate heavy lift drones in the USA. Mast Reforestation runs big hexacopters that drop up to 60 pounds of seedlings in moss pucks onto carefully planned spots in burnt out forest areas. Hylio’s drones spray up to 200 pounds of agricultural products — fertilizer, pesticides, herbicides and fungicides — onto fields in carefully planned spots to maximize crop yields and minimize product expenses.
Both are approved for limited out of line of site operation by the US Federal Aviation Authority. Every flight from either company or in Hylio’s case its customers are required to file notices to airmen (NOTAM) with their flight path and time carefully detailed.
Mast Reforestation paved this pathway for actually useful UAVs with a real market in the middle of last decade, and Hylio and other firms are following in its flight path.
Note a few things. Rural only. Not over any occupied buildings. Limited out of line of sight flights. Actually big markets. Still fairly small aircraft.
Now let’s compare to Ehang’s certification. Rural only. Not over any occupied buildings. Only in line of site of a ground crew. In other words, very short distance thrill rides, with perhaps the most thrilling part being walking through the thicket of knee-high blades.
Hardly a world-changing event. But maybe it’s a first step for the firm along a pathway of certification?
Well, no. Appropriately named Hindenburg Research, which overlaps with what I do but with a much bigger profit motive, released a report on Ehang recently. Profit motive? Yes, they are a short seller. They look at obvious nonsense firms that are clearly overvalued, then they do a bunch of research, find a lot more obvious nonsense typically, then take a short position in the stock and release a report. If the stock price goes down, they make money. I’m either more altruistic, less profit oriented or just lazier, and just publish the obvious stuff.
The Hindenburg team spoke to Chinese aviation and certification experts, and not only got the real certification story as opposed to the glossy Ehang version of it that carefully doesn’t mention the deep limitations on what they were allowed to do, but more. Basically, to achieve real passenger carrying certification in urban areas, Ehang has to go completely back to the drawing board and redesign the aircraft from the ground up. Even then, there’s little reason to believe that certification would be remotely cheap. This is, after all, supposed to be an autonomous passenger carrying aircraft.
The headwinds for a commercial, electric autonomous aircraft of any type are reasonably high. They are going to diminish, but it’s going to take 15 years or more. The chart above is my regional air mobility maturity model, with increasing battery energy density, full digital air traffic control including digital transponders on all aircraft, and of course maturation of battery electric aircraft.
That’s intended for fixed wing aircraft flying out of smaller commercial airports with air traffic control, starting with cargo aircraft. That’s a much simpler target than flying autonomous origami rotorcraft carrying people over densely populated urban areas.
Ehang exists in a period of relatively low battery energy densities. That’s going to change through 2040, with CATL doubling energy density with its new commercial product initially intended for aviation released this year, and three different organizations commercializing or near to commercialization of silicon-based battery chemistries with a theoretical maximum energy density five times CATL’s. But right now, Ehang has a very energy intensive flight mode — beating the air into submission — and low energy density batteries. It’s very limited.
It exists in a period when autonomous flight systems are reasonably well baked, but aren’t apron-to-apron. Current autonomous flight systems are more like Tesla’s Autosteer. They’ll keep an aircraft on track on its route, but they won’t land it and taxi it to the hanger, or leave the hanger and take off for that matter. Hylio’s and Mast Reforestation’s drones are prepped by ground crews, then take off when the ground crews initiates the flight, and only follow narrowly prescribed, pre-planned paths through limited air space, with very limited out of line of site approvals. XWing is closest with its early days fixed wing cargo solution, but they are still flying with an observer pilot on board and a ground control system which has humans interacting with air traffic control verbally.
It exists in a period when the requirement for digital transponders has just arrived for UAVs. But those transponders aren’t integrated into digital air traffic control systems in any meaningful way. It’s just a requirement so that piloted aircraft hopefully can be warned about drones that stray outside of very limited flight envelopes. Digital air traffic control is the longest pole in this, as it’s going to require a lot of civil aviation authority approvals for ground computers to talk to airborne computers and have them cooperate on flight path changes and emergency manoeuvres, even with human oversight.
Did Hindenburg find anything else? Yeah, Ehang is running out of money already, with less than US$50 million in the bank. It’s trading at over 50 times its book value. Over 90% of its claimed 1,300 orders are clearly mist, not bankable. Founders and key shareholders have been selling shares by the bucketful, mostly getting out entirely. Recent investors have histories of fraud.
Ehang didn’t go the SPAC route, in other words, but it has so many similarities with evtol firms that did that it might as well have. News of its breakthrough certification is vastly overblown. Undercapitalized. Claiming nonexistent orders. Early investors making bank while exiting. No business model. Not exactly headline news. The only needle Ehang moves is on the hype meter.
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