Dear Fellow Bubble Watchers,
It was a busy summer for AAM/UAM/eVTOL. Conveniently, it’s been two years since my previous note on the subject. Even more conveniently, I’m in the mood for criticism. I’ll alternate: News and Comment. Mostly comment.
News: eVTOL companies pivoted to military work. At Farnborough BETA unveiled the MV250 autonomous hybrid-electric VTOL for military logistics. Also during the show, Archer unveiled a hybrid-electric drone for combat and logistical missions in conjunction with Anduril. In August, Joby bought Resonant Sciences, a defense tech company, for $500 million, while Archer bought Insitu from Boeing (more on that below).
Comment 1: So much to say here. Perhaps they’re just in search of a different investor cash rush. As Stephen Perry notes in Aviation Week, VC investments in defense tech skyrocketed to $14.6 billion in the first five months of 2026 – about 9X 2020’s level. By contrast that eVTOL SPAC craze dried up long ago, and some OEMs (Lilium, Volocopter, Supernal, Overair, etc.) have dropped like eFlies with dead batteries.
Comment 2. Everyone’s eager for revenue. Perhaps after many years, investors are proving wary of stuff that’s euphemistically termed “pre-revenue,” meaning “speculative as hell.” Insitu magically gives Archer around $200 million in revenue per year, up from basically nothing. Resonant gives Joby around $100 million per year. Defense platforms give OEMs the hope of getting random DoD contracts for further air vehicle development. Another benefit, from Joby and Archer’s perspective, is that they might think they’re making themselves too big (and too defense-related) to fail. That is, when the inevitable day of reckoning comes, their ownership of key defense properties (Insitu, etc.) increases the chance of a US Government bailout.
Comment 3: does anyone still believe this eVTOL air taxi guff? I can’t hire a cult deprogrammer for all remaining believers out there but let me try this: the people who are the biggest proponents of eVTOLs, the ones who’ve been promising a revolution in air travel, the ones promising a new, trillion dollar market, are now taking their scarce (in many cases dwindling) cash and spending it on something completely different. Joby, for example, reported total assets of $2.75 billion at the end of 2Q 2026, and just diverted 18% of that to something that wasn’t anything at all like “Our vision is to save a billion people an hour a day.” That should give you pause.
Comment 4: These new military AAM platforms…will someone please tell me what capabilities they add relative to turbine- and piston-powered military rotorcraft and drones? I really have no idea.
News: Boeing sold Wisk (in addition to Insitu, per above, and SkyGrid too) to Archer, in an all-stock deal. Boeing will now own ~16% of Archer.
Comment: congratulations Boeing on offloading something I never really understood why you onloaded. Please focus management attention on big stuff instead. My colleague Jeremiah Gertler had the best take by far: “Boeing offloading Wisk to Archer was like taking your goldfish to the vet.” And good news: when the inevitable write-off of Boeing’s new Archer stake occurs, it won’t even register on their balance sheet.
News: Boom seriously downgraded its presence at this summer’s Farnborough relative to 2024 and 2022 (when they said they would fly their Overture supersonic jetliner in 2026). This might be because last December they announced that their new priority was building gas turbines for AI datacenters. That’s as pre-revenue as a supersonic jet, only somehow much dumber.
Comment: Just as eVTOL eVangelists seem to no longer believe in their core market, Boom doesn’t seem to believe in its core market either (although, hilariously, they still say Overture deliveries will begin next year). There’s hope for remaining eVTOL believers. There’s no hope whatsoever for remaining Boom believers. I mean, seriously, people. What comes after AI datacenter powerplants? Oh, I know…BoomCoin, a cryptocurrency I just invented. (“BoomCoin! No less reliable than any other cryptocurrency!”)
News: Some admittedly cool stuff happened with eCTOLs/Hybrid CTOLs this summer. At Farnborough, BETA, GE, Boeing and NASA announced that they had jointly flown a hybrid-electric aircraft above 30,000 feet in two hour flight test using a retrofitted Saab 340 (of all things). Just after, Heart Aerospace flew its X1 demonstrator for its ES-30 hybrid; the X1 is now the world’s largest electric plane (thus far). Also this summer, Electra reached a production agreement with Safran for the TG600 turbogenerator for its EL9 hybrid and announced plans for the EL9 to be built at a new factory in Ohio.
Comment: eCTOL/Hybrid CTOLs are much better positioned than eVTOLs (that is, they aren’t doomed). They promise much greater capabilities and vastly better economics than the vertical platforms. Congratulations to Heart, BETA, and Electra for their recent achievements. Having said all that…I’m still concerned this segment is a bit niche-y, relative to what’s being invested. The OEMs also seem quite aggressive about technology maturation and production ramps. Per one recent brokerage note on BETA: “We est Aircraft revenues beginning in 2027 w/ 77 CX300 & 4 ALIA 250 deliveries worth $335/17MM each at an avg $4.1/4.2MM ASP.” I like BETA. But does anyone think the first production year for an all-new company building an all-new platform using all-new technology will see deliveries of 81 aircraft worth $352 million?
Comment (final): According to the PitchBook, via The New York Times, as of June 30 PE firms had 33,575 unsold companies in their portfolios. That’s up from 32,451 companies at the end of 2025 and twice as many companies as a decade ago. This eVTOL (and some AAM) stuff may be part of a bigger problem. Aerospace doesn’t have a lock on dumb money.
Yours, ‘Til Sisyphus Gets A Boulder-Hauling eVTOL,
Richard Aboulafia