The United States is perhaps one of the best countries to start an urban air mobility company. You only have to look at how fast well-funded startups like Joby Aviation, Wisk Aero and Lillium are building and testing electric vertical takeoff and landing, or eVTOL, aircraft.
However, South Korea, which lacks the venture capital, entrepreneurial ecosystem and aerospace legacy of the U.S., might be the first to lay the groundwork for taking urban air mobility (UAM) from an expensive science project into a viable service.
In 2020, the South Korean government set out its road map to commercialize air taxis by 2025, a goal that has since empowered mobility-focused private companies to form consortia dedicated to that end. Now, in addition to carmakers, seemingly unlikely players — think telecommunications companies and ride-sharing platforms — are pushing the UAM industry forward.
The unusual suspects
It’s not a stretch to imagine automakers getting involved in this space. Indeed, some American companies like General Motors have air mobility in their sights. After all, they have the brand recognition and the manufacturing might to at least get a vehicle off the production line.
In South Korea, Hyundai, the country’s biggest carmaker, has earmarked KRW 1.8 trillion ($1.4 billion) for flying taxis in South Korea by 2025. The company in 2020 also formed a consortium with South Korean telco giant KT and a couple other companies to commercialize UAMs by 2028 and build the country’s first vertiport at the Millennium Hilton Seoul.
Now, you’re probably wondering how telecommunications firms fit into this equation. Predictably, it appears they fill out the communications part of the puzzle.
“Air taxis, ground transportation and mobility platforms will have to communicate in real-time for safe UAM operations, which will require telcos’ 5G or 6G service,” a spokesperson for LG Uplus told TechCrunch. It makes sense, but we’re not seeing companies like AT&T and Verizon get into the UAM game in the same way their counterparts in South Korea are.
For example, last month, LG Uplus partnered with ride-hailing service Kakao Mobility, drone maker Pablo Air, airline Jeju Air, Korean oil refiner GS Caltex and British eVTOL maker Vertical Aerospace to participate in South Korea’s transportation ministry-led “K-UAM Grand Challenge” to commercialize UAMs.
And earlier this year, SK Telecom (SKT) joined forces with American eVTOL startup Joby Aviation to launch air taxis in South Korea. A few months before that, SKT unveiled a UAM operating model co-developed with Hanwha Systems, a unit of South Korean conglomerate Hanwha Group.
“Most startups are focused on manufacturing eVTOLs, but the current UAM industry ecosystem is not limited to eVTOL aircraft or air taxis,” an SKT spokesperson told TechCrunch. “Urban transportation systems must be seamlessly linked to related infrastructure parties including existing ground transportation, vertiports and telco.”
SKT’s partnership with Joby will leverage T Map Mobility, an SKT spinoff that provides mobility as a service consisting of rental cars, parking, ride-hailing and other transportation-related services, as well as UT, a ride-hailing joint venture between Uber and T Map to better integrate land and air travel.
“This will help government, investors and industry players to connect organically with the UAM industry in South Korea (as Uber works with various partners for UAM in the U.S.),” the SKT spokesperson said.
Getting eVTOLs off the ground
Only two South Korean companies are really pursuing eVTOL manufacturing, but neither of them are doing it in South Korea. Last year, Hyundai set up Supernal, a U.S.-based eVTOL company that’s aiming to commercialize its vehicles by 2028.
Prior to that, Hanwha Systems took a 30% stake in California-based Overair, a startup with which it is now co-developing an aircraft.
But as with any aircraft, developing these air taxis is prohibitively expensive. For an eVTOL vehicle, R&D, certification, designing, building and testing can cost anywhere between $700 million and $1 billion, a source familiar with the industry told TechCrunch. And South Korean VC firms simply aren’t in a position to take that kind of a risk, the source added.
But the global UAM industry is still young, and all the businesses interested in the space are in talks with different governments to find a way to market, so funding the tech isn’t the only way to get the first-mover advantage in this potentially trillion-dollar industry.
“South Korea will be leveraging a lot of the other developments happening around the world and creating a fertile place for them to come and operate,” Cyrus Sigari, co-founder and managing partner of UP.Partners, a VC firm focused on funding advanced air mobility, told TechCrunch.
In other words, each country has its strengths. While the U.S. focuses on building the tech, South Korea is focusing on creating an actual land-to-air mobility ecosystem using eVTOLs produced by startups in the U.S., U.K. and Europe.
“We need to have these different regulatory and social environments to have this become a global trend,” said Sigari.
South Korea’s road map only outlined one or two routes in the Seoul metropolitan area when it was first announced two years ago. Since then, it has added more targeted routes to expand UAM services to other regions of the country by 2030. The ministry also predicts that by 2035, at least 50 vertiports will serve around 200 flight routes, with the average passenger fare per kilometer costing about $1.50 (1,700 won).
Commercializing air taxis as both an economic opportunity and a means to alleviate road congestion continues to be a goal of the government moving forward. The country’s new president, Yoon Suk Yeol, who was inaugurated in May, has added UAMs to his list of 110 national tasks to focus on and strengthen during his term.
The government reportedly also plans to launch a $1.3 billion research project to come up with global UAM standards for vertiport infrastructure, transportation networks and aircraft certification.
A spokesperson from the South Korean Ministry of Land, Infrastructure and Transport confirmed the government’s plans to create UAM standards but declined to comment on the amount of investment involved, saying those details are not yet final.
However, a source familiar with the situation said the guidelines will be in line with international standards led by global agencies including the U.S. Federal Aviation Administration and the European Union Aviation Safety Agency.
Meanwhile in the U.S., where eVTOL startups have made serious progress thanks to generous VC funding, there isn’t a cohesive national or state-driven standard on how to drive UAM forward. It’s left to OEMs to fly the plane, so to speak.
“Everybody’s kind of putting the engine on the airplane while we’re flying at the same time,” said Sigari. “This is all new territory. It’s like trying to regulate AI — nobody really knows how to do that. And yes, we’ve had [Federal Aviation Administrations] around the world, but this is a very different problem set of potentially thousands, if not hundreds of thousands of fully autonomous vehicles flying through the sky.”
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