At the beginning of this year, Reed Smith anticipated an increase in investment in eVTOLs in our report analyzing the changing aviation industry landscape.  Today, investors continue to predict market growth in eVTOLs and advanced air mobility aircraft.  In a recent study released by Horizon Aircraft, 96% of senior venture capital and private equity professionals predict more eVTOL orders in the coming years, with just 2% indicating little or no increase.  The study represents input from investors across the globe, including US, Canada, UK, Australia, New Zealand, China, Hong Kong, Germany, and the UAE.

Significantly, respondents expect that piloted advanced air mobility aircraft will continue to comprise the majority of orders.  After all, eVTOL purchasers will likely be able to put manned aircraft to use sooner than their unmanned counterparts.  Put differently, eVTOLs that we expect for use in freight and eventually passenger transportation will enter the market being operated by pilots, similar to passenger aircraft.  This is because operations with a pilot on board are inherently less risky than unmanned operations, and therefore serve as a starting point for advanced air mobility aircraft.

By contrast, when considering unpiloted aircraft, the first operations are taking place with small aircraft like drones, which are already operating in several markets with controlled operations like package delivery.  Reed Smith’s aviation team have continued to act throughout 2022 in Europe, the U.S. and Asia on a range of AAM-related transactions and have a developed understanding of the legal and regulatory pathway to advanced aircraft operating in various environments.