10 Emerging Technology Investments for 2023 – #3: Air Taxis

This company already has about 1,300 electric air taxis ordered, says Sustainalytics. 

Andrew Willis 21 February, 2023 | 1:30AM
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Andrew Willis: In this latest video of our “10 for 2023” series, Sustainalytics' authors Martin Vezér and Poulomi Sengupta combed through PitchBook and Sustainalytics to find companies that could fly you to work maybe. Cruising along at 300 km/h quietly and without emitting any carbon emissions seemed impossible until recently. Just last year, Italian aerospace company, Leonardo (FINMY) teamed up with U.K. firm Vertical Aerospace (M00) to design the VX4, an air taxi with a range of about 160 kilometers. With about 1,300 of VX4s already on order from the likes of American Airlines (AAL) and Virgin Atlantic, you could be riding on one of these units soon.

According to Deloitte Insights' report, the electric vehicle takeoff and landing or eVTOL market is expected to reach more than $17 billion by 2040. That's a long way off, however, and there are some serious safety concerns to overcome first. Quality and safety are paramount with air taxis for obvious reasons when you're airborne. But lithium batteries in particular can be problematic. Since they're both fire hazards and the main source of power for the aircraft, product governance had better be strong, and that's what Sustainalytics sees in Leonardo. To manage quality, the Italian aerospace firm reports that 92% of its employees work on sites that have obtained ISO 9001 quality standards. But as we'll discuss next week, French firm Airbus (AIR) isn't far behind when it comes to product governance and air taxis.

For Morningstar, I'm Andrew Willis.

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About Author

Andrew Willis

Andrew Willis  is Senior Editor at Morningstar Canada. He previously produced content for Fidelity Investments and finance industry events for Euromoney Institutional Investor and has written in the past for Thomson Reuters and CNN. Follow him on Twitter @Andrew_M_Willis.

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