Financial Gulf Widens Between Electric Aviation Contenders

This year started with the high-profile collapse of one of the more well-known European electric aircraft developers, and as 2025 drew to a close, a leading U.S. player raised $1 billion through an initial public offering on Wall Street. The contrast between the respective fortunes of Germany’s Lilium and Vermont-based Beta Technologies speaks volumes about the emerging picture that advanced air mobility has seen increasing polarization between the “haves" and the “have-nots.”

After burning through more than $1.5 billion to develop its six-seat eVTOL aircraft, Lilium was shut down in February when a consortium of prospective new owners failed to come up with promised funds for a buyout. One of several last straws was when the German federal government and Bavarian state officials refused requests for credit guarantees.

In October, its remaining assets and intellectual property were snapped up by Archer Aviation for just $21 million. Two months earlier, Archer had acquired much of what remained of another eVTOL developer, Overair, which went out of business when its Korean backer Hanwha pulled the financial plug in 2024.

Another electric aviation casualty in the early part of this year was Eviation, which in February laid off its remaining workforce, saying it had “paused” work on the nine-seat Alice aircraft. Supposedly, its owner, the Singapore-based Clermont Group, is seeking new investors, but that trail appears to have gone cold.

On November 5, Beta Technologies completed its IPO, seemingly giving it ample financial runway to certify both its Alia 250 eVTOL vehicle and the CX300 conventional takeoff and landing aircraft. The company has already made pre-certification deliveries to early customers, Bristow and Air New Zealand, and has a diversified business plan spanning medical logistics, cargo deliveries, military missions, and passenger transportation. It is now laying plans for larger aircraft seating between 19 and 150 passengers.

No Easy Paths to the AAM Market

According to Craig Foster, senior consultant and co-founder of Valour Consultancy, investors are getting increasingly impatient with delays in seeing any commercial returns from the advanced air mobility start-ups. In his view, even self-declared frontrunners Archer and Joby are not likely to meet their revised target of starting revenue-earning operations in 2026.

“My opinion is that OEMs have just underestimated how difficult and costly certification of these things is,” Foster told AIN. “There is a very steep learning curve, and, with the best of intentions, they have been too optimistic in what they’ve communicated publicly.”

There is no shortage of question marks over other innovators in the field. For instance, Heart Aerospace has gone very quiet about its ES-30 hybrid-electric regional airliner since relocating a downsized team from Sweden to California last year.

Similarly, there is little clarity as to the direction of travel for eVTOL developer Supernal since parent company Hyundai Motor Group announced the departure of CEO Jaiwon Shin in August. The company statement conspicuously avoided any mention of what is happened with the technology demonstrator for its S-A1 aircraft, which made at least one tethered flight earlier this year. Social media posts suggest the company is in the process of fundamentally rethinking its approach.

In Germany, MD Aircraft is scrambling to complete a delayed Series A funding round to make progress with its planned 10-seat electric regional airliner, the MDA-1. If it can raise around $5.8 million, this will unlock another $14 million in government grants, but it has struggled to confirm investor commitments, and plans were further derailed when Rolls-Royce shut its electric propulsion division, on which it had been counting for the motor.

According to MD’s lead development engineer, Erick Vianello, some investors have been distracted by the claims of self-promoting eVTOL air taxi start-ups who, from his perspective, have not delivered the promised progress. He believes this has blinded them to the more attainable returns on offer from companies working to provide new options for established airliner business models.

At Valour Consultancy, where Foster’s team is preparing to publish a new report on the AAM sector, there are expectations of more companies running out of cash in 2026. More positively, he predicted a shift towards hybrid-electric propulsion options to expand business cases for new aircraft, as well as more diversification into military and logistics applications.

Meanwhile, in China, two eVTOL makers—EHang and AutoFlight—have certified aircraft and hold commercial air operator certificates. This likely provokes head-scratching on the part of Western rivals, apparently crawling through treacle to make it to market in Europe and the U.S.