Market Research Report
Urban Air Mobility Market - Growth, Trends, COVID-19 Impact, and Forecasts (2021 - 2035)
|Urban Air Mobility Market - Growth, Trends, COVID-19 Impact, and Forecasts (2021 - 2035)|
Published: May 13, 2021
Mordor Intelligence Pvt Ltd
Content info: 80 Pages
Delivery time: 2-3 business days
The Urban Air Mobility Market is projected to register a CAGR of over 13% during the forecast period (2021 - 2035).
The COVID-19 pandemic has had an unprecedented impact on all industries on a global scale. The aviation sector has been severely affected by the pandemic, and since most of the major players of the Urban Air Mobility (UAM) sector are directly or indirectly related to the aviation sector, the pandemic has had a ripple effect on the UAM sector. Prior to the outbreak, the UAM sector, which is still in its formative stages, was witnessing a healthy growth with around USD 1 billion being invested during the first few months of 2020, most notably the USD 590 million invested by Toyota into Joby Aviation and EHang's IPO valuation amounting to USD 650 million. Moreover, the FAA is currently engaged with manufacturers of more than 15 eVTOL aircraft. Uber Air, EHang, Volocopter, Joby, and Lilium are all planning to launch commercial passenger operations within the next three to five years.
The growing traffic congestion issues, especially in larger cities globally, are propelling the need for faster modes of intracity transportation. In this regard, the urban air mobility concept is gaining importance. There are a lot of R&D investments in the urban air mobility industry, with many start-ups and aerospace players eyeing this market as one of the high growth potentials. Such factors are expected to drive the growth of the market in focus during the forecast period.
Need for Faster and Cleaner Urban Transportation is Driving Investments in the Market
With the number of on-road passenger vehicles increasing every year, traffic congestion problems are also growing. Especially at certain peak hours, the increasing amount of traffic on the roads significantly increased the commuter's time taken to travel by roads. The existing road systems in most of the countries do not have the capacity to handle the peak-hour loads without forcing the commuters to wait in line. This is not only wasting the time of citizens but also challenging the governments. In addition, growing on-road passenger vehicle volumes, which burn fossil fuels, are also polluting the environment considerably. With traffic congestion and urban road mobility posing a great challenge, governments and technology companies have started to look at UAM as a viable option for passenger and cargo transport. As the UAM is a safe and efficient air transportation system where the passenger-carrying air taxis are operating above populated areas, there will be significant time savings. Moreover, air taxis used for the UAM are mostly electric powered or fuel-cell powered. Hence, they help in reducing atmospheric pollution. In this regard, many companies are investing significantly in this industry, which is expected to boost the technological advancements in the market in the long run, after the UAM systems enter the commercial usage phase.
North America and Europe to be at the Forefront of the UAM Revolution
Though there have been developments around the globe, most of these innovations have been centered in the North American and European countries. The presence of aerospace giants Boeing and Airbus has also helped foster a favorable environment for the UAM sector as these companies are keenly investing towards developing prototypes for evaluation. For instance, since 2014, Airbus has been exploring methods to integrate the latest technological advancements in the field of electric propulsion systems for powering the UAMs. Hence, in 2018, the company created the Airbus Urban Mobility division to accelerate the integration of such innovative technologies into the UAM solutions that the company aspires to offer. As of April 2021, Airbus is developing new capabilities, as part of the Vertex project, to allow for a fully autonomous flight in its Flightlab demonstrator by 2023.
In Europe, several cities have been joining the Urban Air Mobility (UAM) Initiative, which is a part of the European Innovation Partnership on Smart Cities and Communities (EIP-SCC). The initiative aims to contribute to the creation of a market for urban air mobility. Under this initiative, companies with innovative urban mobility solutions are brought together and their solutions are showcased and supported to replicate the feasible ones at a bigger scale. Even the regulations for the urban air mobility industry are being drafted. As per European Aviation Safety Agency (EASA), air taxis and ambulances can become a reality in the European airspace by 2026.
Even in North America, the United States is at the forefront of adopting this newer means of transport. Many startups from the United States are working together for developing and implementing these technologies locally. A roadmap is also being laid for bringing the UAM into commercial usage in the next 5-6 years. With these efforts, North America is also projected to embrace the urban air mobility concept faster than the other regions barring Europe.
Textron Inc., Uber Technologies Inc., Airbus SE, The Boeing Company, and Safran SA are some of the prominent players in the market. The market is still in its development phase with many players, through collaborations and partnerships, are trying to launch their UAM systems in the market in the next five years. However, at the same time, a lot of groundwork in terms of the necessary infrastructure and air traffic management still needs to be done, for which, the players are partnering with several other companies/agencies offering the necessary technologies. For instance, Uber and NASA partnered in 2018 to develop technologies for UAM airspace management to make large-scale UAM operations possible. Likewise, in October 2019, Porsche and The Boeing Company signed an MoU to explore the urban air mobility market and its benefits. With the growing emphasis on environmentally friendly and economically sustainable technologies in mobility, players are mainly focusing on developing eVTOL (electric Vertical Takeoff and Landing) aircraft, whereas other players are looking beyond electricity to alternative energy sources, like hydrogen fuel cells. Moreover, investments in autonomous aircraft in this industry are increasing currently.