Amazon and UPS bet on electric aircraft company Beta to transform transportation – Money

The start-up Beta of Kyle Clark, a Harvard graduate and former professional hockey player, is on the verge of bringing battery-powered cargo planes into the American skies, capable of taking off and flying. ‘land like helicopters.

When playing in minor league hockey at the beginning of the years 1996, Kyle Clark says his teammates spent the long bus rides talking about the drugs they had taken the night before. Clark, a six foot defender, delved into textbooks about building planes. Rather cheesy – but he had even stood out as an egg-headed engineer in the Harvard locker room, where his teammates nicknamed him Beta.

Clark never entered the National Hockey League, but 15 years later, his start-up Beta Technologies is valued at one billion dollars and is set to enter the big leagues with Alia, a potentially revolutionary electric plane.

Alia , whose wingspan gracious of 14 meters was inspired, according to Clark, by the long-flying arctic tern, is part of a series of innovative electric aircraft that young shoots aircraft build and take off and land vertically like a helicopter. Almost all of Beta’s competitors, including billionaire Larry Page’s Kitty Hawk and cash-rich Joby Aviation SPAC , aim to transport people, allowing city dwellers to hopscotch above the streets of cities with heavy traffic. But Clark designed Alia primarily as a cargo plane, betting that a sizeable market will develop to accelerate e-commerce to and from suburban warehouses long before air taxis are considered safe to allow on the streets of cities. cities.

“We will in fact be the best performers in terms of passenger transport, because by the time others carry out this type of mission, we will have thousands of aircraft, millions of flight hours and a safe, reliable and proven design, ”says Mr. Clark, 35 years old, whose company is based in his hometown of Burlington, in Vermont.

Clark is also preparing what he thinks is a second lucrative business: charging stations for electric planes of all types that he plans to distribute across the country for create the aviation equivalent of the network of Superchargers d e Tesla . Nine of them are already operational, from Vermont to Arkansas, and 43 others are under construction or authorization. Most of them will contain used Alia aircraft batteries, removed when their capacity has decreased by around 8%, giving them a profitable second life while Beta sells Alia owners replacement packs for around. half a million euros. Equipping recharging stations with a battery storage system will prevent costly upgrades to the local power grid: Clark’s plan calls for the stations to fill up slowly during off-peak hours, while the Unnecessary energy can be sold back to utilities during peak hours.

“The airplane is the sexy part, but we’re going to make a lot of money with the batteries,” says Mr. Clark.

Beta investors, Fidelity Management and Amazon, are hoping the company will repeat the success of another electric vehicle start-up that they financed and whose market capitalization recently exceeded 90 billions of dollars. “They see a lot of parallels between Beta and Rivian,” says Edward Eppler, a former Goldman Sachs investment banker who joined Beta as CFO after working on his Series A round, which raised 368 millions of dollars in May at an estimate of $ 1.4 billion. Forbes estimates that Beta revenue over the 10 last months amount to 15 millions of dollars, mostly from US Air Force research contracts.

The cash injection came one month after Beta has received strong support from UPS. Big Brown has signed a letter of intent to purchase up to 100 Alia planes, which are expected to cost between $ 4 million and $ 5 million each. Beta executives are hopeful that an order will also be placed through Amazon, with the two giants looking for ways to keep their promises to cut carbon emissions from their parcel delivery operations.

Beta aims to start delivering first UPS planes in 2024 – assuming she obtains safety certification for Alia by then from the Federal Aviation Administration. Otherwise, the US Air Force could be the first to use Alia: Beta has won contracts worth 43, $ 6 million for test Alia for military purposes. In May, Alia became the first electric aircraft to obtain Air Force approval for manned flight.

According to Beta, the bulbous cabin of Alia will be able to transport 250 kilos of payload, including the pilot, over a maximum distance of 400 kilometers – at least 172 more kilometers than all competitors who have prototypes in the air – or up to 1500 kilos for 370 kilometers with one of the five battery packs removed. Mr. Clark expects FAA standby requirements to limit flights to 180 kilometers.

But given Alia’s high price – about double a new Cessna Grand Caravan of similar size and up to five times the used aircraft that dominate small freight fleets – Beta and UPS know that Alia will only be profitable if it flies a lot. This will require radically reshaping delivery networks, moving away from the traditional star model in which cargo planes make only one round trip per day, delivering packages from a local airport to a sorting center. . Instead, they envision Alia flying directly from one UPS warehouse to another – avoiding truck rides and plane theft – and possibly directly to large customers. Frequent flights will save money through lower operating costs. Beta promises savings of 60% on fuel and less expensive maintenance thanks to the reduction in the number of parts of the electric propulsion systems, as well as a reduction of 35% if the computers end up chasing the pilots out of the cockpit.

Clark, who gets up at 4 a.m. and says he can always find a late hour to work on motorcycles or on his own planes, grew up outside of Burlington obsessed with sports and flying. He was a star athlete at ‘Essex High School, captain of the football, lacrosse and hockey teams. His wife, Katie, who he met in fifth grade, says that when Clark was invited to parties he would usually beg to come home to build model airplanes. Clark honed his skills by helping mechanics at a local airport in exchange for plane rides. When he set about building an ultralight plane from a kit, his mother, fearing he might commit suicide, burned the parts.

Clark finally took place in the pilot’s seat when the Washington Capitals hired him during his freshman year at Harvard: He used contract bonus to take flight lessons while playing on farm teams in Richmond, Va., and in Portland, Maine.

Returning to Harvard after two years, Clark designed, for his graduation project, a flight control system for a single-seat aircraft based on a motorcycle seat and handlebars. Having failed to find investors to develop the aircraft, Clark created in 2005 a construction company for electrical supply equipment in his mother-in-law’s garage. In 2010 he sold this company to Dynapower , an electrical equipment manufacturer in Vermont, and became its director of engineering, helping to develop the systems used in Tesla’s commercial energy storage offering, Powerpack.

After the takeover of Dynapower by a group of private investors in 2012, Clark ended up with some money. He traveled the East Coast on a motorcycle trying to convince investors to design his plane. Not having found a buyer, he co-founded in 2014 a social networking platform which put start-ups in touch with talent and capital, hoping to use it as a springboard for its own projects.

But it is not to the Internet that Beta owes its existence, it is the iconoclast biotechnology entrepreneur Martine Rothblatt. After enriching herself by founding Sirius Satellite Radio, she created in 1940 a biotechnology company, United Therapeutics, to develop a treatment to save his daughter from lung disease. The drug has worked, but her daughter will still need a lung transplant at some point. This motivated Ms. Rothblatt to make a bold effort to address the chronic shortage of organs for transplant. She is in the process of developing artificial organs. Electric Vertical Take-off and Landing (eVTOL) planes are the ideal solution for transporting organs quickly – and environmentally – to hospital helipads. She contracted with the helicopter company Piasecki to develop one to her specifications, but in a meeting with the subcontractors in 2014, she says she was deeply impressed with Clark, whom Piasecki had hired to build the power systems.

Finding out that Clark lived near his vacation home in Vermont, she invited him over to her house. What must have been a cafe from minutes turned into an all-day meeting, Clark driving her to Montreal for already scheduled meetings. She decided he was the right person to build the entire plane. She gave him millions of dollars to launch Beta, and ordered 52 planes and eight charging stations.

” It is by spending time with someone face to face that we can know … who will tear down a wall to succeed and who will be content to give you apologies, ”says Rothblatt. “Kyle was equal to the best executive I had worked with in my life before he did anything for me.

In just eight months, Clark’s small team built and flown Ava, a test mule for key subsystems. With a weight of 1500 kilos, it is the largest electric aircraft to date to perform a vertical takeoff and landing. But along with his successes, it led Clark to conclude that tilt rotors – which many of his competitors use – were a mistake, adding weight and complexity that threatens to make safety certification more difficult.

Alia, on whom he started working in the summer 2017, has separate systems for lift and cruise: a thrust propeller at the rear for forward flight, and for take off and land vertically, four propellers mounted at the top of two arrows cutting its wings in of them. These long and tall wings optimize it for long distance flights. According to him, this glider is so efficient that if it lost its power at 2025 meters, it would descend smoothly – and safely – for approximately minutes. In addition, the placement of its batteries of 570 kilos at the base of the aircraft, as a counterweight to the wings, makes Alia inherently stable, compared to tiltrotators. The simpler design means that Alia’s flight control program contains only 1 180 lines of code, explains Mr. Clark, while tiltrotators require millions of lines of software.

Observers raise two safety concerns: if he lost one of his four lift propellers, Alia would become difficult to control in vertical mode, and placing the batteries in the belly could present a risk of fire for passengers above. Mr Clark says the cockpit floor will be protected by titanium shielding and the loss of a lift propeller is unlikely, with each prop being fitted with four redundant motors.

But the regulatory risk is high. After all, the FAA has yet to certify a conventional aircraft with an electric propulsion system, let alone a vertical take-off and landing aircraft. Clark and Rothblatt believe it’s critical to keep the plane as simple as possible, but no one knows how long it will take the agency to assess Alia’s new technology, or whether it will require modifications that will reduce its performance. Even Rothblatt, who firmly believes in the project, is taking risks by supporting the development of two simpler devices: a helicopter equipped with an electric propulsion system and a large drone from the Chinese company EHang, listed on the Nasdaq.

Black images of flying unicorns adorn the windows of Beta’s headquarters at Burlington Airport. This is no joke about Beta ‘s status as a billionaire aerospace start-up. The registration numbers of both Alia prototypes are N 230 UT and 251 UT, for United Therapeutics and Rothblatt’s requirement for autonomy of 370 kilometers. To identify the plane to air traffic controllers, the last two letters must be pronounced as “Uniform Tango” according to aviation convention, but to annoy her husband when he takes care of communications during flight tests, Katie Clark took used to say “Unicorn Tango.”

Kyle Clark follows two unusual strategies to lead Beta: he aims for a flat structure without titles where young engineers feel free to challenge older ones. – and he wants everyone to learn to fly.

He gives his 270 employees free lessons in Beta’s motley fleet, made up of 15 planes and helicopters, including ordinary Cessna 150, an Extra aerobatic aircraft, a WWII Boeing-Stearman biplane and a 1940.

Many employees have no previous aerospace experience. Becoming familiar with aircraft while flying helps them design aircraft systems better, and fosters a love of flying which Clark says is more motivating than rewards. Investors have questioned the expense, but Mr. Clark remains firm. “The pure and simple passion of people who care are worth more than anything,” he says.

Beta investors would also prefer Clark not to insist on being the pilot of Alia’s try – or that he doesn’t let off steam by doing barrel rolls in the aerobatic plane – like his wife would. Mr Clark insists that piloting the Alia himself – which he says hasn’t experienced a hard landing or crash – gives him firsthand insight into the effectiveness of the design changes and how whose customers will experience it.

“Are we going to crash a plane or a helicopter?” Of course it will happen, ”he says. “This is the reality of bringing new technology to market. The world will be better because of what we provide, and that involves risks. ”

The power they need to succeed

A key issue for eVTOL aircraft is the weight of the batteries, which contain 14 time less energy by weight than aviation fuel. To achieve their range and payload goals, Beta, Joby Aviation and Kitty Hawk seem to need batteries whose energy density is at the limits of the most recent technologies, while Lilium is in experimental territory. , according to battery experts Venkat Viswanathan and Shashank Sripad of Carnegie Mellon University.

Article translated from Forbes US – Author: Jeremy Bogaisky

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