As the new air mobility industry continues its rapid progress toward certified aircraft and a more mature enabling ecosystem, numerous companies have shifted their focus away from the on-demand, intra-city passenger service model championed by Uber Elevate — and toward what they believe are more realistic near-term applications of their aircraft, including emergency air medical services and logistics.
Focusing on cargo, in particular, companies hope for a faster route to deploying their electric and hybrid-electric aircraft, most including autonomy technology as well. Earlier deployment means generating revenue and — perhaps more importantly — the flight hours and data necessary to enable safe passenger operations and prove the reliability of autonomous systems to regulators.
Engineering services firms tell eVTOL.com they have no shortage of work related to developing cargo VTOL aircraft. Is this “pivot to cargo” sensible?
Starting with the toughest challenge
When Uber released its Elevate white paper in 2016, the company presented potential eVTOL investors with a path to profitable use of their aircraft — initially offering to outright purchase vehicles, and later shifting to a per-flight-hour model. But it has become clear that the urban air taxi model is gated behind perhaps the greatest technological and regulatory barriers to entry of any eVTOL application.
Hence, many companies have shifted their focus. Uber vehicle partner Pipistrel put its air taxi concept on the backburner and unveiled an unmanned hybrid-electric concept, Nuuva, built for cargo delivery. South Korean automaker Hyundai, another Uber partner, intends to launch an unmanned cargo aircraft in 2026 — two years before its passenger aircraft enters service — as part of the company’s well-financed, long-term approach to the sector. EHang and Volocopter have similarly introduced cargo variants of their flagship aircraft, while other early entrants like Elroy Air, Volansi and Pipistrel continue development, early testing and pursuit of certification for their cargo-focused solutions.
As with bringing UAM passenger service to life, however, there are many challenges to eVTOLs finding success in cargo applications. Regulators will likely consider operations to be lower risk if passengers aren’t onboard, which could mean earlier approvals for autonomous delivery, but shippers will expect aerial solutions with a high degree of reliability that can operate without aerospace professionals performing extensive pre-flight checks before each takeoff.
“Cargo operations are more complicated than people think. Usually they happen where much of the infrastructure isn’t, in tough operational environments,” Tine Tomazic, CTO of Pipistrel Vertical Solutions, told eVTOL.com. “Dispatchers are not going to be looking at these as aircraft. It’s just a multi-modal agent for delivery, and it has to go, no matter what,” Tomazic said.
Pipistrel’s Nuuva V300, an unmanned hybrid-electric eVTOL drone that will carry up to 460 kilograms / 3 ½ cubic meters (1,014 pounds / 123 cubic feet) of cargo, is intended to focus on delivering that reliability by using all components that already have a track record and an understanding of their failure modes and rates — a problem the eVTOL industry will continue to grapple with in the years ahead.
“Nuuva uses components that are de-risked. Every single thing on the airplane has seen life somewhere. They are not optimal, like peak kilowatts per hour — not even close — but we know they work and we know exactly how long they go for, how they fail, what to look for,” Tomazic said. The aircraft uses eight Pipistrel E-811 electric motors, which are already certified and feature in the company’s type-certified Velis Electro trainer.
The Nuuva has received significant interest from customers around the globe, according to Tomazic, but he expects finding profitable applications for it and other early eVTOL aircraft in global logistics supply chains will be a challenge.
“I think it will require some ingenuity on the customer side on where they wish to deploy these vehicles first,” Tomazic added. “In 2023, Nuuva won’t be at a level of readiness that allows it to fly in complex, crowded airspace . . . but there are still super-solid business cases out there where people will be able to make money using this vehicle. It will take a unified dance between manufacturers and users to understand and prioritize these cases. We will not see universal deployment of these aircraft for a while.”
Critically, Tomazic sees more “pull,” or demand and interest, from stakeholders on the cargo side than in passenger transit. Still, cost is the main determinant at the end of the day; putting freight in the air is more expensive than with a truck, and VTOL is more expensive still, so initial applications will likely be limited to routes where there is a clear advantage — delivering to islands; time-limited feeder routes for larger, less frequent movements of cargo; or winding, rural routes where an aircraft can make three trips back and forth in the time it takes a truck or van to make one.
Meeting different markets with distinct requirements, challenges and opportunities
Cargo delivery platforms under development span the spectrum of useful payload, ranging from larger solutions like Pipistrel’s Nuuva and Sabrewing’s Rhaegal down to the single package or meal delivery drones presented by Wing, Amazon and Uber Eats.
Each part of the spectrum is targeting different markets and will face unique challenges. Smaller drones may find their cost can only be justified for more valuable payloads, such as medicine — especially until more mature, highly automated concepts of operations are employed.
In Ireland, however, Manna.Aero appears to be proving that delivery-by-drone can cost as low as a dollar per flight, including aircraft depreciation and personnel — a price tag CEO and founder Bobby Healy told Urban Air Mobility News is “phenomenally more efficient” than the six to nine dollars he estimates restaurants usually pay to deliver food to houses. Flying 100-150 deliveries per day with just two aircraft in Galway, a town of about 10,000 people that Healy says are wildly supportive of their newfound aerial friends, he makes the case for the cheapest of packages to be moved via drone.
“In five years’ time we will have one city of 20 million people — and I know which city that is — and drone delivery will be pervasive there. It will have replaced about half of road-based deliveries,” Healy said, adding that the business won’t be commercially viable until 18 to 24 months from now.
Manna.Aero is currently using fixed-wing drones that fly 80 km/hr (50 mph) out a radius of 3 km (1.9 miles) and back in no more than six minutes, choosing productivity over radius to enable eight to 10 deliveries per hour. With recent improvements in battery technology, Healy said the company is developing a VTOL design for scaled production.
Some of the leading entrants in the eVTOL cargo space focused on it from the get-go, including Volansi, a well-funded player focused on middle-mile commercial and defense logistics founded in 2015. CEO and co-founder Hannan Parvizian, a former operations analyst at Tesla, was inspired by the challenge of rapidly delivering spare parts to Tesla factories that needed to resume operations as quickly as possible.
“We’ve seen the world’s supply chain strained like never before from the impact of COVID-19,” said Parvizian. “There’s now an accelerated need for rapid advancements in supply chain technology, especially in healthcare. Drone delivery is one solution to getting critical supplies where they are needed, at the moment they are needed most.”
A Phase II partner of the U.S. Air Force’s Agility Prime program, Volansi recently raised a $50 million Series B and has multiple electric and hybrid-electric aircraft with payloads ranging from 10 to 30 lb. (4.5 to 13.5 kg). Volansi is exploring numerous applications for its 10-lb. payload, 40-mile (65-km) range VOLY C10 aircraft, which was chosen by the Northern Plains UAS test site as the initial test aircraft for development of North Dakota’s statewide beyond visual line of sight (BVLOS) system. Volansi is also testing cold-chain medicine and vaccine delivery with pharmaceutical corporation Merck in North Carolina and recently announced it will open a new aircraft development facility in Bend, Oregon.
At the other end of the payload spectrum, companies like Xwing and Reliable Robotics are applying autonomy to larger aircraft like the Cessna 172 and 208, the latter working with FedEx to potentially automate part of its supply chain — particularly in rural areas.
Dave Merrill, co-founder and CEO of cargo eVTOL startup Elroy Air, believes the payload spectrum in between these smaller delivery drones and retrofitted Cessna Caravans is the sweet spot for earlier applications of autonomy to aerial logistics.
“There’s going to be use cases across the spectrum of payload and range . . . where we are is in a sweet spot in between [Wing and a Cessna Caravan],” Merrill said during a discussion hosted by Revolution.Aero in October. “We looked at the spectrum and came to the conclusion that single-parcel delivery drones are going to be challenged on economics unless you’re carrying blood or some other very high-value parcel; there’s not enough value to pay for the flight until it gets extremely optimized.
“Then at the higher end of the payload spectrum, there’s just not enough benefit to taking the pilot out when you’re still flying a Cessna Caravan. So, we decided the right spot was 300 pounds of payload, and the all-electric range you can get of 50 to 100 miles is just not enough for our customers in big commercial logistics, humanitarian aid, disaster relief, and military resupply,” Merrill added, explaining the reasoning behind his company’s design decisions and inclusion of a hybrid-electric system.
Elroy’s Chaparral, which first flew full-scale last year, moves 300 lb. (135 kg) over 300 miles (480 km) and can autonomously pick up and drop off its cargo pods — a key selling point to customers, Merrill said, as “high level, this is about warehouse integration and it’s about efficiency on the turn-around.”
But for many of these middle-mile logistics applications, Marc Ausman, CEO of Airflow.aero and former chief strategist for the Airbus Vahana program, argues eSTOL — short takeoff and landing — is far more economical than eVTOL.
“Look at things today. Helicopters are very useful, but only used in niche use cases. Fixed-wing aircraft dominate [cargo movement] because of the lower operating cost,” Ausman told eVTOL.com. “We believe things will be the same for electric aircraft. And as the drivers progress to reduce eVTOL costs, those same drivers, primarily batteries, will also reduce the operating cost of eSTOL.”
Ausman projects the operating costs for eSTOL delivery will be as little as one-third that of eVTOL aircraft, with Airflow’s approach requiring a 300-foot runway, or roughly the equivalent of three helipads. As companies like Amazon push to increase how many products they can offer same-day delivery for, Ausman sees a massive opportunity in 50- to 200-mile (80- to 320-km) missions for logistics and e-commerce — most of which start and end in locations like warehouses around cities, rather than within them — where a football field-sized piece of land can cheaply be made available to land and take off.
“Of course, there will be niche applications like oil rigs, or small helipads on top of skyscrapers where eVTOL capabilities are needed. But for the vast majority of cargo flights, we believe eSTOL is a better choice,” Ausman said.
Scaling autonomous aerial delivery systems
Airflow, Volansi, Elroy and other startups will have to find a broad market for their aerial delivery platforms in order to justify the investment needed to bring their aircraft to market. While electric powertrains and autonomy promise to significantly lower the cost of aerial logistics, these revolutions are coming to the ground as well, with numerous hydrogen, electric and self-driving ground logistics startups valued in the billions.
Autonomy experts are divided on whether self-driving or self-flying technology will be reliably employed first. Ground systems face a more unpredictable environment including human drivers and signage that varies between localities, but aircraft can’t stop or pull over when faced with a problem and have different requirements for effective computer vision due to the speed and three-dimensional realities of aviation.
“This may sound contrarian, but I think [autonomy in aviation] will scale faster,” said Merrill. “I think true [ground] autonomous taxis will have very limited deployment even three or four years from now. I think we’ll see more drones, autonomous aircraft and unmanned deliveries than autonomous trucks in the next five years.”
For that to happen, aviation regulators may need to pick up the pace, particularly in the United States. Industry had hoped the Federal Aviation Administration’s (FAA) recently-concluded UAS Integration Pilot Progam (IPP) would enable the accumulation of hundreds of thousands of flight hours for cargo delivery trials, but the agency is still pacing significantly behind industry-led standards development for reliable communications, detect-and-avoid systems, and remote identification systems. A recent audit found that the FAA’s ability to evaluate new aircraft designs and accept new industry consensus standards in a timely manner is largely constrained by limited resources and guidance.
In the near term, military customers interested in more flexible supply chains and reducing costs will likely play a significant role in how these cargo startups demonstrate revenue growth and a foothold in the market to their investors.
The U.S. military, driven in part by successful use of two Kaman Aerospace unmanned K-MAX helicopters by the Marine Corps in Afghanistan, has expressed interest in capitalizing on the rush to develop electric VTOL/STOL aircraft and more capable autonomy technology by purchasing potentially thousands of unmanned aerial logistics platforms in various payload ranges by the end of the decade.
Michael Blades, vice president for aerospace, defense and security at Frost & Sullivan, expects to see more urban air mobility companies designing passenger aircraft that are modular and can also be used for medium-to-heavy cargo delivery. Middle-mile logistics opportunities, he told eVTOL.com, will provide ROI long before last mile delivery, and numerous “good solutions” already exist for last mile, including Volansi, Wingcopter, Swoop Aero and other VTOLs.
“The earliest growth opportunities in last mile will be a continuation of what we’ve seen in response to COVID-19 — delivering critical items like medicines, PPE and other medical supplies,” Blades said, echoing concerns about the economics of last mile drone delivery for items that are “nice-to-have” rather than critical. “This will likely require a long period of ecosystem development and related case studies to understand if the demand would necessitate a system for last mile drone delivery, and how much consumers would be willing to pay to reduce delivery times, and for what items.”