The aviation industry is looking for its own Tesla

While automakers – led by Tesla (TSLA) – have produced entire fleets of electric vehicles in recent years, aircraft manufacturers are increasingly far from electrifying industry in the US.

This leads to an industry goal being achieved net zero emissions by 2050 even more elusive, energy experts say.

“It’s really difficult to decarbonize aviation,” Samantha Gross, director of energy security and climate initiatives at the Brookings Institution, told Yahoo Finance. “You will never see a battery-powered 737 [plane] because the batteries are heavy.”

That’s why the industry is working on a range of green energy solutions, such as sustainable fuels for larger, long-haul aircraft. Meanwhile, the electrification of small planes and helicopters is also on the horizon.

To date, a few North American startups have made strides toward electrifying air travel. And its initiatives are attracting investments from manufacturing, airlines and automobile giants.

United Airlines (UAL) has a $1 billion deal with Archer Aviation (ACHR) signed several years ago to buy up to 200 of the startup’s vertical takeoff and landing vehicles, or eVTOLs. Prior to the United deal, the California-based company partnered with European automaker Stellantis (STLA).

In an earnings call earlier this year, Archer co-founder Adam Goldstein explained why the company accepted an investment from the automaker: “When I founded Archer, I knew from watching the EV industry that developing the ability to manufacture our aircraft in high volumes was perhaps the No. 1 enabler of our future success, along with aircraft design and certification,” he said.

Meanwhile, Toyota (TM) and Delta (DAL) Airlines backed Santa Cruz, California-based Joby Aviation (JOBY). The startup’s eVTOLs can travel up to 100 miles on a single charge, or two round trips between JFK Airport and downtown New York. The company already delivered one of its aircraft to the US Air Force for testing and training as part of a broader contract with the US Department of Defense.

French aircraft manufacturer Airbus (AIR.PA) has an internal unit working on its own prototype of an electric air taxi, with a delivery deadline by the end of this decade.

Last year, American plane maker Boeing (BA) became the sole owner of Wisk Aero, a Mountain View, California-based startup working on eVTOLs. Boeing invested US$450 million in the company in 2022.

“What they [startups] are doing today – they are collecting data on how you operate one of these aircraft in an all-electric environment,” said Dave Shilliday, vice president and general manager of advanced air mobility at Honeywell (HON). The company manufactures engines and other internal components for traditional and electric aircraft.

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The Federal Aviation Administration has not yet fully certified the commercial use of electric planes in the United States, but Archer and Joby hope to launch them commercially in 2025.

It is worth noting that earlier this month China’s aviation regulators granted mass production certification to eVTOLs manufactured by Chinese startup EHang (EH).

Autonomous air taxis

Wisk is working on a fully autonomous air taxi since 2010. The startup’s “Generation 6” has a range of 90 miles and can carry four passengers and their carry-on luggage. There are no pilots on board, but flights are supervised by humans on the ground.

Wisk recently announced an agreement with the city of Sugar Land, Texas, to develop infrastructure that would eventually enable Wisk’s autonomous air taxi operations in the Greater Houston region.

The company says its goal is to make the service accessible to everyone, from college students to professionals. “A trip on Wisk’s aircraft will be comparable to the base ride-hailing service cost per mile,” a spokesperson said.

It’s unclear when the Generation 6 will receive certification to fly commercially, but the company has already conducted about 1,700 test flights across multiple generations of the aircraft.

Hybrid planes

Just as hybrid cars became the intermediate step for the automobile industry to become fully electric, the aircraft industry is gradually going electric.

One example is Horizon Aircraft (HOVR), based in Ontario, Canada, which is currently working on a 15-foot-long hybrid eVTOL initially targeted at municipal use and emergency situations such as hospital transports.

“Think about it [the hybrid] as a very practical bridge to a future where all-electric aircraft actually make a lot more sense,” said Brandon Robinson, co-founder and CEO of Horizon Aircraft.

The former Canadian fighter pilot predicts that cost-effectiveness will drive more hybrid solutions in the near term.

“When you burn less fuel per unit mile, you not only save costs but also, from a sustainable aviation perspective, produce fewer hydrocarbons,” he added.

Sustainable fuel

With battery weight being the main constraint for long-haul electric flights, the industry is currently turning to clean aviation fuels for large aircraft.

Virgin Atlantic made history last year by testing the first transatlantic flight from London to New York using 100% sustainable aviation fuel (SAF) that is not derived from petroleum.

“The world will always assume something can’t be done…until you do it” read a blog post by founder Sir Richard Branson. “Today’s flight shows that sustainable aviation fuel can be used as a drop-in replacement for jet fuel – and is the only viable solution to decarbonize long-haul flights.”

The UN International Civil Aviation Organization wants the global SAF pool to increase from current levels of less than 1% to 5% by 2030.

“We think this is very viable,” Gavin Towler, chief sustainability officer at Honeywell, told Yahoo Finance. The company licenses its SAF technologies to chemical plants for startups and oil companies.

There are countless ways to produce sustainable aviation fuels, but three have emerged as industry forerunners. One of them uses raw materials. The other is linked to ethanol, which is also used in gasoline blends. A third involves converting carbon dioxide and hydrogen to produce jet fuel.

Having a standard for SAFs at all levels would help accelerate the path to sustainability, Ramanan Krishnamoorti, vice president of energy and innovation at the University of Houston, told Yahoo Finance.

“Price is the biggest challenge we face today,” he said. “The second is also to have the same quality of sustainable aviation fuel around the world.”

Ines Ferre is a senior business reporter at Yahoo Finance. Follow her on Twitter at @ines_ferre. Yahoo Finance’s Madison Mills contributed to this report.

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