Who Will Buy Flying Cars? Startups and Industry Experts Divulge the Secret Formula

As numerous companies race to be the first to bring flying vehicles to the mass market, they have to start with high-end buyers first. That's the nature of production and economies of scale. You begin by bringing a product to market that's available to an exclusive few. As demand increases over time you can make that product for a lower cost, which, in turn, means you can sell it for less.

Before that happens, who is going to buy eVTOL (electric vertical takeoff and landing) vehicles? Who will the early adopters be?

Daniel Langer, CEO of luxury brand strategy firm Équité and professor of luxury strategy at Pepperdine University, says that he isn't sure who will be the early adopters of flying vehicle technology. To him, unlike luxury space travel, the market for them is a little unclear.

"If such a vehicle requires extensive training to operate and maintenance and so on, then I think that part of the early adoption could be rather utilitarian," he said in an interview with Newsweek. "But if these vehicles will be easy to operate, let's say like a drone where a little bit of training makes it so almost anyone can use it, then I think that the adaptation would be different."

Langer imagines that for its utility in navigating large cities quickly, this will appeal most to consumers who are young, urban and affluent. He likens this to a sports car owner who wants to show off the aesthetics of their purchase but appreciates what the model is capable of doing.

For ASKA, one of the many startups that are working on an eVTOL flying vehicle, co-founder and CEO Guy Kaplinski says that the coming shift puts a particular focus on educating younger people about the technology.

In a tour of the showroom over video conference, Kaplinski showed off a number of educational tools and to-scale models of their eVTOL (a full-size production vehicle is still in the production phase at a nearby factory). The showroom has received walk-in visits and school trips over the last year.

"We need to make sure that the future generations understand that because they are the customer for us," he told Newsweek. "The focus is really the kids, because they are the majority customer in the future. Get them to understand and trust that technology and understand the safety."

The Los Altos, California-based company says that their eVTOL will cost about $789,000 with a projected delivery date of 2026. However, their focus is on what people can do now. They recently announced a "Founders Club," which gives eager early adopters the opportunity to, as the company puts it, "share ideas, learn about new technology innovations, and explore potential business opportunities in the rapidly emerging air mobility sector."

This month, the company introduced a service called On The Fly for those not ready for full ownership. Buyers have the option of farming out their vehicles to a timeshare-like system, where other consumers can purchase time on them with either home delivery or a drive to pick it up.

"In my experience, if you want to be successful in a luxury segment, you have to create extreme value," Langer said. "There is a very clear correlation between creating value and being perceived as a relevant luxury purchase."

ASKA currently has under 100 preorders. In interviews with some of those customers, the company asked them what value the new technology creates. The answers varied, from the desires of a private collector to a doctor who sees the utility for this kind of rapid transport in healthcare. Others spoke to the freedom it gives them to live outside a major urban area or travel to a vacation spot a few hours away.

According to Dr. Martina Olbert, founder and chief executive officer of luxury brand consulting company Meaning.Global, companies will need to lean into the personal freedom angle to achieve successful product launches.

"I think marketing it specifically with this human desire and yearning for hypermobility, ultimate personal freedom, hyper-seclusion and access to things whenever 'I' want is phenomenal," she said in a recent interview with Newsweek. "If it takes off, this is the concept that will help it take off as something to buy that is desirable and aspirational."

Olbert relays that being able to bypass hours of traffic in major urban areas will show consumers that you are giving them something that reinvents the buyer's sense of personal freedom. She said that this approach is relatively new. The COVID-19 pandemic altered how consumers view what luxury means, shifting away from excess and opulence and becoming more about personal freedom, sufficiency and privacy.

"I wouldn't rely completely on just marketing this like an electric vehicle, because I don't think that, in itself, is desirable or sexy enough to sell this," Olbert said. "But it is definitely a plus point when you wrap it in some kind of an aspirational desire for free movement"

As far as the price for an eVTOL, Langer says that the more affordable the vehicle, the quicker the adoption rate.

"In an acceptable segment in luxury where you find a large range of car buyers, at the moment (they pay) something between $100,000 and $200,000," he said. "I think that for a flying car, people would probably be willing to spend a little bit more, but I don't think that in the beginning they will be inclined to spend half a million dollars."

ASKA's $789,000 eVTOL is projected as five years away. Opener, an eVTOL counterpart, says on its website that its Black Fly vehicle will be priced like an SUV when it comes to the mass market. Earlier this year, German startup Lilium said that its craft would start at $2.5 million initially.

Another potentially appealing factor? Inequality. ASKA's co-founder, chair and chief operating officer Maki Kaplinsky says that this technology can help decentralize wealth and talent from large cities.

"Outlying rural areas are suffering from a lack of wealth and talent," she pointed out. "I think this kind of transportation can really help balance out that flow of cash and talented people.

As for the companies developing autonomous options, Langer doesn't see that as much of an obstacle for adaptation, pointing to the trend of autonomous systems in cars that currently draw consumers.

"The more autonomous it will be and the more perceived safety that people have, the faster the adaptation is going to be," he argued. "Why would you drive the car if the car can drive you?"