Reflecting on the Past Year & Looking ahead - 2025: Separating the wheat from the chaff

As another year is in the rearview mirrors, I must acknowledge that many of my predictions from last year did not hold up well. I had expected Volocopter to make a strong showing at the Paris Olympics, leveraging Emmanuel Macron’s influence to secure a high-profile debut. However, not only did Macron’s political standing weaken within the federal government, but we also underestimated the resistance from various public interest groups, ultimately denying Volocopter its grand stage. Some may argue that the extensive investment in the Paris showcase, with little to no return, only accelerated their path toward bankruptcy.

It was widely expected that the first eVTOL companies would struggle to survive, and while Lilium’s Chapter 11 filing came as no surprise, my prediction for Vertical Aerospace as the next to fall was off the mark. Instead, Vertical managed to secure last-minute funding—at least for now—while Volocopter, which appeared to be on stronger footing at the start of 2024, became the second major player to go under.

Regardless of individual opinions on their respective technical concepts, I have never been an advocate for either of Lilium`s or Volocopter`s architecture. What stands out though is the lack of financial discipline—something that experienced former Airbus executives should have been better equipped to manage. Yet, this is also another example of Europe’s broader challenges: a lack of venture capital and an inherently risk-averse investment culture. Not long ago, Europe was leading the eVTOL race with Lilium, Volocopter, and Vertical among the most advanced players alongside Joby Aviation. However, Chinese competitors—and particularly Archer Aviation in Santa Clara, California—have now left their European counterparts far behind. But should that really come as a surprise? Europe has failed to establish itself as a leader in AI, quantum computing, space technology, or other breakthrough innovations. Its biggest recent contribution to innovation seems to be reengineering how plastic bottle caps stay attached—hardly the technological leap the world was waiting for.

One of my predictions for this year was that at least three eVTOL manufacturers would receive a non-CAAC type certificate. While that milestone has yet to be reached, there is reason to believe it will happen in 2025. In addition to Archer, Joby, and Beta advancing toward certification, we are also likely to see a significant number of struggling companies exit the market. The well-funded and execution-focused players continued to attract capital in 2024, whereas second-tier companies were largely unable to secure financing—not even through loan guarantees. This was ultimately what sealed Lilium’s fate.

From a supplier’s perspective, the key lesson remains clear: evaluating a company’s financial health in combination with its technological progress and certification trajectory should be the primary criteria for deciding whom to work with. Spoiler Alert - keep your payment terms in check. Companies backed by cash generating companies—such as Hyundai (Supernal) or potentially Honda—represent the safest bets, besides the well-financed start-ups we already covered earlier. Even Embraer’s commitment to EVE is uncertain, especially if they move forward with a single-aisle aircraft program to compete with Airbus and Boeing. It is difficult to imagine them having the financial and operational resources to support two programs of that magnitude.

Regarding the criticism from traditional helicopter executives who claim that eVTOL startups are draining investment and talent from their sector, there is some validity to their argument—particularly in pointing out overpromised timelines and unrealistic production targets. Archer, for instance, initially projected the production of 500 aircraft in 2025 during its SPAC, only to later revise that number to a low double-digit figure. Even Archer’s CCO, Nikhil Goel, acknowledged in a recent McKinsey webinar that commercial operations will begin slowly & gradually. The initial promise reflects the fundamental clash between the aviation industry’s traditionally conservative approach and Silicon Valley’s aggressive, venture-driven model. However, dismissing the entire eVTOL market as a fraud is shortsighted. While widespread adoption may take longer than initially pictured, and while battery technology still requires further advancements (or hybrid solutions in the interim), the market is not going away.

The progress made—despite the setbacks—has laid the groundwork for future technological advancements, many of which will likely influence the next generation of commercial aircraft. More importantly, the eVTOL sector has injected a new level of excitement into aerospace, attracting young talent that will be crucial in shaping the industry’s future. As Richard Aboulafia stated at last year’s Aviation Week Conference in Beverly Hills, “Make aerospace sexy again.” I fully agree—that’s exactly what we need.

In this context, Airbus’ decision to shut down its NextGen City Airbus program was surprising, citing current battery technology limitations that prevent viable operational ranges beyond 60 miles. Meanwhile, Boeing remains committed to Wisk, likely for the same strategic reason: using eVTOL development as a steppingstone in autonomous & electrical flight for next-generation single-aisle aircraft.

While much of the focus remains on vehicle design, battery evolution and certification, I believe the more critical challenge lies in infrastructure. Early business cases must leverage existing assets such as heliports, FBOs, and established airspace routes, but significant developments will be needed to fully enable urban air mobility at scale. On this front, Archer’s partnership with Anduril was a particularly strategic move. Military applications are poised to be early adopters, providing an initial revenue stream for eVTOL companies. It’s no coincidence that Archer, Joby, and Beta are all actively involved in the U.S. military’s Agility Prime program.

Looking Ahead: What to Expect in 2025

In summary, here are the key developments to watch for this year:

1. The first non-CAAC type certificates will likely be granted.

2. The wave of consolidation, bankruptcies and liquidations will accelerate for companies unable to secure funding.

3. The first certified vertiport is expected to begin commercial operations in the Emirates by late 2025 or early 2026

4. The era of flashy marketing presentations is over - companies will need to demonstrate real-world execution and results.

5. Outside of AAM, 2025 could be the year Boeing reasserts itself, particularly if it makes significant progress on ramping up 737 MAX production and securing 777X certification.

   
   

While the eVTOL market has faced significant hurdles, the sector remains dynamic, and its long-term trajectory is still promising. The coming year will separate the serious contenders from the rest—and set the stage for the next evolution of aerospace innovation.