Investment in the development of electric flight depends on innovation in battery technology to extend the range of aircraft, according to Charles Armitage, European and defence analyst at Citi Research.
“We expect the market [for electric aircraft] to start small and potentially get very large,” Armitage told more 300 delegates at the Town Hall online meeting organised by Corporate Jet Investor’s sister title Revolution.Aero last week (September 1st).
At present, modest battery power was sufficient to power small training aircraft in the circuit or pattern, leading to a market valuation of about $100m/year, he said. Armitage based his views on the 2019 report ‘Electric Aircraft, Flightpath of the future of Air Travel’, which he co-authored.
While not insignificant, it is tiny in proportion to the large jet market, which was valued at $150bn/year before the Covid-19 pandemic.
The next stage in the development of electric aircraft “a bit further out” was likely to be Urban Air Mobility, with electric aircraft capable of flying up to 30 nautical miles, generating a market valuation of $5bn a year.
By 2030 electric aircraft with a range of up to 400 nautical miles would be capable of delivering regional air travel. This was likely to yield a market of about $15bn a year.
Market valuation of $60bn/year
But the real prize was the development of electric aircraft capable of 800 nautical miles. That would deliver a market valuation of $60bn/year and attract large-scale investment, said Armitage.
Battery density is a critical. “At present you could probably make a [battery-powered] plane that could do 200 miles,” he said. “That’s 3-6% of total narrow-body flights. A conventional airliner costs $10-15bn to develop, so you’re not going to spend that for a $5m market.”
Only with the advent of batteries capable of powering electric aircraft over a range of up to 800 nautical miles does large-scale investment becomes a strong financial position, Armitage argued. “At 800 nautical miles [range for electric aircraft], you can do [match] 60% of all narrow-bodied flights. That’s a $60bn market.”
He added: “It’s a tough ask but quadrupling the battery energy density makes the market 10 to 20 times larger and suddenly you start to get a really attractive market. If you ally that with a massive carbon reduction, if you use sustainable electricity, it really starts to get interesting.”
‘It really starts to get interesting’
Current predictions are that battery technology will progress to achieve the 500 kilowatt hours per kg needed to achieve a range of 400 miles by 2030. Armitage quoted Airbus CEO Guillaume Faury as saying half of narrow-body markets are under 1,000kms (about 600 miles). “That’s very similar to our analysis and clearly shows the way Airbus is thinking.”
Innovation in battery performance was likely to be achieved in increments rather big leaps forward. Asked when passengers would be able to book an electric flight from London to Paris, Armitage replied: “My feeling is over 10 years and under 20 years. It’s probably in the 10- to 15-year scale on a commercial airliner.”
An audience poll revealed that more than 70% of respondents believed regional aviation would be the biggest market for electric aircraft by the end of the decade. Just over 20% thought it would be urban air mobility, while 5% thought flight training would be the biggest electric market by the end of the decade.
Meanwhile, speaking at the same Town Hall, Brian Flynn, MD, DiamondStream Partners, told delegates there is “little to no chance” of eVTOL aircraft achieving profitability in the current market, due to their high development costs. Watch both presentations here.
Charging the future: Electrical flight market valuations
-2020: Pilot training in the circuit (or pattern). Market valuation $100m/year
-‘A bit further out’: Urban air mobility. Range of five to 30 nautical miles. Market valuation $5bn/year
-2030: Regional air travel. Range of up to 400 nautical miles. Market valuation $15bn/year
-Post 2030: 800 nautical miles. Market valuation $60bn/year.