Urban air mobility (UAM) aircraft developer Eve has been a hard-charging arrival to the next-generation aviation sector, and in less than two years after its October 2020 inception has revealed numerous deals after going public with a successful Wall Street listing. Despite that, the Embraer unit now says it has secured new financing for continued development of a vehicle it has yet to present.
Just before Christmas Eve, Eve announced it had negotiated new credit lines from Brazil’s National Development Bank to support the São José dos Campos-based company’s further development of UAM aircraft, including air taxis and longer flying planes. Two different lines will provide a total of $92.5 million over a 12-year period that – according to the conditional wording in an Eve press release – “are expected to offer beneficial terms and conditions” to the company.
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The new funding announcement is notable for a couple of contrasting reasons.
The first is it came a little over two weeks after Eve said it had concluded deals on UAM infrastructure systems, as well as the sale of 40 of its electric vertical takeoff and landing (eVTOL) planes. Both accords presumably involve some degree of up-front payment from partners to enable production, as would many other agreements the company has revealed. The second is that the credit line announcement comes only a year and a half after Eve raised $377 in its May, 2020 Wall Street listing, which is usually the way startups generate the funds they need to thrust themselves into full operational orbit.
Yet not only does Eve now require additional resources – despite what it says is an order book for 2,700 eVTOL craft that surpasses all sector rivals – but it is doing so through credit that in a bit over a decade will need to be repaid.
Backed as it is by a major aviation player in Embraer, there’s little doubt of Eve’s industrial bone fides – especially given the impressive spree of deals it has done in both eVTOL sales, related tech provision, and ground-based infrastructure work it has contracted with a large variety of international partners.
Yet since it also benefits from Embraer’s traditional aircraft development and production assets, not to mention financial heft, the need of addition outside support might appear somewhat incongruous.
Meanwhile, much like China-based EHang, Eve is a bit of a UAM outlier in being a publicly traded company seeking new, third-party funding to see its aircraft development plans through. But in contrast to EHang – as well as listed companies that haven’t sought new inflows like Joby, Archer, Wisk, Lilium, and others – Eve has yet to reveal a working eVTOL prototype, much less obtain regulator approval to begin testing it for eventual certification and launch.
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It may well be that the task of creating UAM aircraft is sufficiently onerous that a relatively new, remarkably fast-moving arrival like Eve is now showing funding shortfalls that other, older publicly traded rivals may also be moved to reveal in coming months.
Even if that is the case, however, now that Eve has secured new credit lines, its previous investors are now probably hoping that after a 2022 characterized by a dazzling cadence of wide-ranging deals, 2023 proves to be the year Eve puts an actual eVTOL in the air.