Air mobility meets autos: Stellantis, Toyota, Hyundai bring manufacturing muscle to new market

Some of the auto industry's biggest companies hold sky-high hopes for diversifying their businesses beyond ground vehicles.

Toyota Motor Corp., Stellantis, Hyundai Motor Group and Mercedes-Benz Group have invested in air mobility startups, and they're nearing a point where those investments and a fledgling industry could soon take flight.

Electric vertical takeoff and landing aircraft, or eVTOLs, could be produced by the thousands in factories underpinned with automotive mass-manufacturing expertise. These aircraft could whisk passengers above congested urban roads at a cost about 20 to 30 percent more than a comparable Uber Black ride, according to a Hyundai executive.

Hyundai air mobility subsidiary Supernal underscored the deepening ties between the automotive and aviation industries this month at CES, where Supernal unveiled its S-A2 aircraft, scheduled to begin service in 2028.

Days before that unveiling, Stellantis bought more shares of Archer Aviation stock. Honda, long-running manufacturer of its Honda Jet, has its own internal eVTOL efforts afoot.

Dozens of eVTOL ventures are working toward liftoff in an electric aircraft industry valued at $8.8 billion today and expected to grow at an annual rate of 20 percent to $37.2 billion by 2030, according to a January report from market analysis firm PitchBook.

Many envision deploying thousands of aircraft in commercial service, with a handful planning to launch as early as next year. For select companies such as Supernal, Joby Aviation and Archer, that's where automakers enter the picture.

Traditional aircraft manufacturers produce hundreds of aircraft per year. Air mobility startups want to utilize automotive expertise to speed that process and mass manufacture thousands of eVTOL aircraft while maintaining aviation-grade standards.

"It's been a marvel to watch these two cultures come together," said Jim Adler, founder and general partner at Toyota Ventures, the automaker's venture-capital arm, which first invested in Joby Aviation in 2017.

Regulatory uncertainties persist regarding eVTOLs.
Unlike the auto industry's ability to self-certify that new vehicles meet federal safety standards, startups must complete an arduous certification process with the Federal Aviation Administration to prove their new vehicles are airworthy and ready for service. Several are in the midst of that multiyear process, but so far, none has finished.

Further regulatory questions about airspace and pilot licensing requirements also must be answered.

Here's a look at those automotive-aviation tie-ups, how they've grown and where they stand today.

Hyundai unveiled Supernal's V-tailed, tilt-rotor S-A2 aircraft at CES in Las Vegas.

It is designed to carry a human pilot and four passengers while cruising at 120 mph on trips of 25 to 40 miles at an altitude of 1,500 feet, well below that of jetliners.

Supernal, a wholly owned Hyundai subsidiary, plans to launch service by 2028.
Supernal expects a prototype of the S-A2 to be ready for flight tests next year, with pre-production testing in 2026 and 2027. The company will begin certifying the aircraft's airworthiness with the Federal Aviation Administration this year.

Supernal has said it will select a manufacturing site in the United States but has not yet determined the location. Los Angeles is a likely first market for flights because of its well-heeled customer base, notorious highway traffic and sprawling geography. City officials have voiced interest. No official routes have been disclosed.

There's auto-aviation cross-pollination on battery packs and design. Indeed, the company's chief design officer is Luc Donckerwolke, Hyundai's chief creative officer and a veteran of Bentley, Lamborghini, Skoda and Audi, among other automotive brands. Manufacturing efficiency is a central component of Hyundai's pursuit of air mobility.

"We have vast capabilities," said Jaiwon Shin, CEO of Supernal and president of Hyundai Motor Group. "Traditional aviation manufacturing is a lot of touch labor and a complex system. … The winning strategy is capitalizing on the mass-production capabilities and applying them to aviation."

Those types of production capabilities are already happening in Toyota's work with Joby Aviation.

Toyota helped Joby set up its first production line in Marina, Calif. Toyota's kaizen, a philosophy of seeking continuous improvement, holds a pronounced influence on workflow and workstations throughout the facility.

Lessons go both ways. "Toyota is learning as much about aviation manufacturing as Joby is learning about automotive speed," Adler said.

Joby plans to start building a factory capable of manufacturing 500 aircraft a year in Dayton, Ohio, this year. The factory is expected to begin production in 2025.

Toyota has invested approximately $400 million in Joby. In April 2023, Toyota signed a long-term agreement to supply key powertrain and actuation components for Joby's eVTOL aircraft.

In June 2023, Joby appointed Ted Ogawa, CEO of Toyota Motor North America, to its board of directors. Aicha Evans, CEO of Amazon-backed robotaxi company Zoox, is also a member of Joby's board.

Joby has eyed New York as a potential first market and said last week it had reached an agreement with Helo Holdings Inc. to install electric charging equipment at a heliport across the Hudson River in Kearney, N.J.

A manufacturing-centered partnership between global automaker Stellantis and Archer Aviation, one of the leading eVTOL startups, could quickly pay off should the young industry find success.

Construction on a factory in Covington, Ga., is underway. The facility is expected to begin production in mid-2024 and eventually be capable of producing as many as 650 aircraft per year. There's space for expansion and a ramp-up to 2,300 aircraft per year.

Such an ambitious achievement would make the factory the world's leading aircraft manufacturing facility by volume.

Stellantis employees are working with the Archer team on manufacturing and supply-chain planning, the companies said. Stellantis employees also are adding engineering, facilities and quality control expertise, they said.

Archer secured a $215 million investment in August 2023, which included funding from Stellantis, Boeing and United Airlines. Two months later, Stellantis boosted its investment. The automaker acquired more Archer stock in October and again this month. Stellantis owns more than 38 million shares of Archer stock, according to SEC filings. The stock traded at $5.17 at the close of the market on Monday.

While there's much focus on aviation and automotive synergy, some aspects of the supply chain may be distinct. Last week, Archer inked a partnership with NASA.

NASA will help the air mobility startup study high-performance battery cells and conduct safety tests targeted for air mobility and space applications. Automotive-grade battery tech is too nascent, Archer said, and it expects more mature battery technology would enable mass production of eVTOL aircraft.

Since first lifting off six years ago, German air mobility startup Volocopter has tested its aircraft in major markets around the world. The latest came in November, when the company conducted flight tests in New York and Tampa, Fla.

That's all prelude to an anticipated launch of commercial service this summer, when Volocopter intends to begin routes in Paris in time for the Summer Olympics. But first, the company must complete the certification process with the European Union Aviation Safety Agency.

Service would start with the VoloCity two-passenger aircraft. Volocopter eventually plans to add its VoloRegion longer-range passenger aircraft and a VoloDrone cargo craft that's capable of heavy lifting.

Volocopter has raised $780.6 million, according to Crunchbase. That includes a $30 million investment from Mercedes-Benz in 2017. Zhejiang Geely Holding Group is also a lead investor.

The auto industry has previously lent manufacturing expertise to aviation. A Ford Motor Co. factory in Ypsilanti, Mich., produced 8,685 B-24 Liberator bombers during World War II.

If there's a difference now, it's that involvement in aviation may help navigate more existential quandaries for today's car companies.
"The perfect storm is coming for automotive," said Sergio Cecutta, managing partner and founder of aviation advisory firm SMG Consulting. An expensive switch to electric vehicles , billions invested in software and automated driving, and a fundamental rethinking of a car's role amid a global decarbonization push are all squeezing the automotive future, he said.

"So what you can do is change the boundaries of your market," he said. "Smaller, electric airplanes might be an extension of their product line."