Electric aircraft startups are having a topsy-turvy week

The emerging world of electrified air travel has experienced big highs and lows in the past few days.

Late last week, the Vermont-based startup Beta Technologies announced that it landed $318 million in Series C equity capital to produce and commercialize its all-electric aircraft and battery charging systems. The new investment, which was led by Qatar’s sovereign wealth fund, brings Beta’s total funding to more than $1 billion in equity capital.

Meanwhile, German air-taxi startup Lilium may be grounded for good. On Monday, the company said it had failed to secure new funding to continue its operations and would file for insolvency ​“soon,” Reuters reported. Lilium, which has an office in Florida, debuted on the Nasdaq stock exchange in 2021 through a SPAC deal initially valued at $3.3 billion.

Beta and Lilium are among dozens of startups that are working to take battery power to the skies, often with the backing of major airlines and climate investment funds.

Some companies, including Wright Electric and Heart Aerospace, are developing electric aircraft that could potentially replace conventional, fuel-burning planes for quick island-hopping trips or regional routes. The effort is gaining momentum globally as airlines and their frequent-flier customers are facing mounting pressure to slash planet-warming emissions from air travel.

However, the type of aircraft that Beta, Lilium, and many others are designing represents a different class altogether, one whose climate benefits aren’t immediately clear.

Electric vertical takeoff and landing vehicles, or eVTOLs, move up and down like helicopters and can accommodate a handful of passengers. Startups envision their aircraft as competing mainly with traditional helicopters, car taxis, and cargo vans, flying high above dense urban traffic to make urgent deliveries or to ferry deep-pocketed commuters. 

Using battery power instead of burning petroleum-based fuels does avoid putting harmful pollutants and carbon dioxide into the air. But creating new demand for air travel doesn’t necessarily reduce overall emissions from existing flight paths. And the same ground vehicles that eVTOLs could compete with are increasingly going electric, too.

Electric aviation startups also face significant technological hurdles. To succeed, they must first design battery propulsion systems that are powerful and durable enough to do the job but without weighing the aircraft down. At the same time, eVTOL companies and their partners will need to build vertical landing and takeoff sites within cities, navigate a crowded airspace, and install networks of electric chargers.

All of this requires significant upfront capital — something Lilium has struggled to secure.

The Munich-based startup planned to launch the first flight of its $10 million Lilium Jet in early 2025, which it anticipated would usher in new investment and pre-delivery payments from potential customers, who have placed orders or signed agreements for more than 780 electric aircraft. But that plan depended on Lilium landing a €100 million ($108 million) loan backed by the German government, which was recently denied.

Beta Technologies, on the other hand, recently began production at its 200,000-square-foot factory in Burlington, Vermont, where it will be capable of making up to 300 aircraft per year. The company is seeking certification by the Federal Aviation Administration for two types of all-electric aircraft: one that takes off and lands vertically, and one that uses a runway like a more conventional aircraft.

Last month, the FAA published highly anticipated rules that establish eVTOLs as the first new category of aircraft in nearly 80 years, and that set guidelines for pilot training and operational requirements. ​“This historic rule will pave the way for accommodating wide-scale Advanced Air Mobility operations in the future,” FAA Administrator Mike Whitaker said on October 22 in a statement.