Sergio Cecutta and his team at SMG Consulting have the unenviable task of sifting through the ever-increasing mountain of eVTOL manufacturers to see which ones are the most likely to succeed.
Think of them as eVTOL experts, talking periodically to existing companies, whilst always keeping an eye out for new ones. The information that they gather goes into building up the company’s AAM Reality Index, which ranks eVTOL manufacturers by the ones it thinks are most likely to succeed. If tracking the hundreds of eVTOL manufacturers wasn’t already enough, it also tracks infrastructure companies.
“The two indexes cover two pieces of the ecosystem,” says Cecutta. “If we look at the ecosystem as made up of different pieces when it comes to advanced air mobility, the first is the advanced air mobility index, which covers the first side of the house, specifically it tries to understand the likelihood of the OEM to certify as well as produce a specific vehicle that was indicated in its business plans.”
The index is purely driven by data, with Cecutta saying that it takes into account five different sets of criteria: funding, experience of the team behind it, technology development, the progress towards certification and their manufacturing readiness.
All the data is then mixed together, to effectively give the company a score out of ten, which the company calls an ARI (AAM Reality Index) score. Topping the list at the time of writing is Joby, with an ARI of 8.7.
“Joby is one of the oldest companies out there, having been founded in 2009,” says Cecutta. “It is also one of the companies whose aircraft will enter into service in 2024, and they are also underway in building their [production] conforming aircraft and starting actually flying for credit with the FAA.”
Just with any other type of ranking, ranking the chances of an a eVTOL manufacturer successfully bringing its aircraft to market, and it being a commercial success, can be quite subjective. That’s especially true in a nascent industry such as the AAM market, where no aircraft similar to eVTOLs have ever even attempted to gain certification.
It’s this uncertainty that drives us towards closer towards data, and the conclusions that can be directly drawn from it.
We have always tried in all of our work to take out subjectivity and introduce parameters with specific milestones and measures,” says Cecutta. “Therefore, whatever the ranking is, it is just an algorithm based on the achievement of the company.
Keeping on top of that data, and all of the changes and additions that need to be made, is no small feat, especially with new eVTOL manufacturers popping up regularly.
However, despite the plethora of eVTOL companies out there, not all of them make the AAM Reality Index. Instead, companies are grouped into three different buckets; those in the index, those that could in the future be in the index, and those that the company is keeping a watchful eye on, with Cecutta saying that if the company does not have a solid product or business plan, then the SMG will not take the time to research them.
“New companies come about weekly, both worldwide, and especially in China where there are more and more companies coming out,” says Cecutta. “But if you look at all of the companies, we basically look at each and every one of them when they first come up. And I would say that there are some companies that are in the index, and there are some other companies that will possibly join the index in the future, and then there is a slew of other companies that we basically monitor to see how they are going to do.”
According to Cecutta, the Vertical Flight Society’s eVTOL tracker lists around 700 aircraft, and whilst a few are from companies that are either in, or could soon be in, the AAM Reality Index, many of the companies behind them are not as solid as those on the list. All in, the company tracks around 40 – 70 manufacturers.
To make it into the index, a new company first gets compared to the existing companies in the index, and then the SMG team asks what makes them different from those companies. Cecutta admits that this approach creates a “high bar”, although he later says that to get into the index a company does not necessarily have to be better than the three or five companies at the top of the index.
“We want to make sure that the companies that we are introducing are companies that are not just going to flame out and disappear.”
says Cecutta. “Consolidation will come, but at the same time we are very conservative when it comes to adding companies, even if there are companies that are on a ‘wait’ list.”
Cecutta says that each one of the top five companies has a solid aircraft that has been engineered to be successful and whilst on the surface that might seem like a strange comment to make, one only has to look at the wide variety of different eVTOL designs that different companies have come up with to understand exactly what he means.
In such a young industry working with new technologies, there is always the temptation to overdesign a product. With so many different companies coming out with new eVTOLs all of the time, new designs also need to stand out, to help differentiate themselves from everybody else, and it’s because of this that we have seen many designs that have left us scratching our heads.
But the aircraft of the top five companies in the index share one thing in common; they all look how we would expect an aircraft or eVTOL to look. That helps not only when it comes to certificating the aircraft, but also when it comes to raising funds for their development, so it should come as no surprise that the top five companies are also those that have raised the most money.
“There is a certain amount of money that companies need in order to be at the top of the index,” says Cecutta. “These vehicles are extremely expensive to develop, let’s not forget that these are airplanes and airplanes take a lot of money to develop, with the figure, and this is just a ballpark figure, around USD$1 billion as far as developing something in the West.”
Although SMG Consulting is perhaps most known for its AAM and Infrastructure indexes, that is only a small part of what the company does.
Having been in business now for ten years, the company specializes in helping its clients grow in the aerospace, defense and automotive industries, be it through market reports, business plans or investments in other companies.
“We have a diverse group of customers,” says Cecutta, “And as you can image, in a growing industry nobody wants to release their names. But we help them with anything connected to the growth side of their business. Whether it is understanding the market, creating a go to market strategy, or developing a business plan, all the way to consulting with them on investments, as well as mergers and acquisitions.
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