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Urban Air Mobility
Flying Cars: Investment
Implications of Autonomous
Urban Air Mobility
I
f you're bullish on autonomous cars, it's time to start lookin
g at autonomous aircraft. To make this complex topic accessible, we collaborated across ctors and regions, using scenario analysis to size the addressable market – ~ $1.5tn in our ba ca by 2040. Logistics is leading the way.
December 2, 2018 10:00 PM GMT
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C ontents
4Executive Summary
11Urban Air Mobility: Where Are We Now?
11Why Now?
11Where Is Urban Air Mobility
Today?
12Autos and Shared Mobility and
Airlines (Transporting Humans) 12Military a nd Defen
(Transporting Troops and
Supplies / Surveillance / Strike) 13Freight Transportation
(Transporting Freight and
Packages)
14Scenario Introductions – Asssing the TAM for Urban Air Mobility
14What Do the UAM Sector
Adoption Curves Look Like?
16Bull Ca: Meet George Jetson
16Bear Ca: From Hobbyists to
Commercial Novelty
16Ba Ca: Is It a Bird… a
Plane? Oh… It's My Toothpaste 17Gating Factors for Urban Air Mobility – What Do We Need and Where Are
We Now?
17Technology
18Battery Improvement
21Distributed Electric Propulsion
(DEP)
24Regulation
25Social Considerations
28Morgan Stanley UAM Total发型师
Addressable Market Model
28Global Total Addressable
Market Summary
29US Bottom-Up Model
Summary
30Autos & Shared Mobility (US)
31Freight Transportation
33Airlines
34Military & Defen
35Enabling Technology – The
Content Opportunity
36US Hardware Total
Addressable Market
37US Software Total Addressable
Market
38US Telecom Total Addressable
Market
39US Batteries Total Addressable
Market
40UAM Global Total Addressable
Market Extrapolations
41Ca Assumptions
42Sector Implications: Introducing the
Morgan Stanley Flying Car 50
43List of Stocks Most Expod to
the Adoption of Urban Air
Mobility
48Urban Air Mobility Potential
Disruptors – the Future of
Transportation
51NASA's UAM Ecosystem
Companies
54Appendix
54US Bottom-Up Total
Addressable Market Model
(Ca Summary)
55Ba Ca
61Total Addressable Market
Model (Bear Ca)
67Total Addressable Market
Model (Bull Ca)
73Global Total Addressable
Market Model Extrapolation
76Miscellaneous
国家征信系统
78More on AlphaWi
Mark my words: a combination airplane and motorcar is coming. You may smile, but it will come.– Henry Ford (1940)
We're making investments in areas like urban mobility and flying taxis, if you want to call them that. As you think about future urban congestion, three-dimensional highways and cities are not all that far-fetched. The technology is doable, and we're working on prototype vehicles today. – Dennis Muilenburg, Chairman, President & CEO of Boeing (MS Laguna Conference, September 2018)
东北地三鲜Executive Summary
Autonomous flying cars aren't π
in the sky. In many ways, an autonomous aircraft is an easier software problem to solve than an autonomous car. Military drones have been around for years, and now electrified, autonomous vertical takeoff and landing vehicles (VTOLs) are gaining traction. In logistics, drone package delivery is in active testing. On November 1st, 2018, NASA launched a Grand Challenge to accelerate the development of Urban Air Mobility (UAM), which it defines as a "safe and efficient system for air pas-nger and cargo transportation within an urban area." NASA is fol-lowing in the footsteps of the Defen Department's Defen Advanced Rearch Projects Agency (DARPA), which launched a Grand Challenge in 2004 to accelerate the development of autono-mous vehicle technology for military usage. Many participants in that challenge went on to found and run major aut
onomous driving startups, including Waymo and GM Crui. So we e a clear need to give investors a starting point for understanding how UAM may unfold.
Exhibit 1:
Notable Attendees of NASA's "Grand Challenge" Industry Day (Non-Exhaustive)
Source: NASA, Company Websites, Morgan Stanley Rearch
Capital is flowing into the space. We e the development of the UAM ecosystem as extremely long-dated and requiring up-front cap-ital allocation, testing, and development in the short term, with increasing visibility. The interction of many technologies, such as ultra-efficient batteries, autonomous systems, and advanced manu-facturing process are spawning a flurry of activity.
l Aerospace & Defen majors are making investments.
Beyond Boeing, Airbus is investing in a helicopter ride-hailing r-vice (Voom) in Brazil, and its electric VTOL (eVTOL) project A3 Vahana hopes to create a quieter extension of this platform in other urban areas. In January 2018, Vahana completed its first full-scale test flight, which reached a height of 16 meters. It has also launched Altiscope, a simulator for evaluating policy/opera-tional opti
ons for air traffic management systems. Lockheed Martin is investing in eVTOL autonomous aircraft, and we believe Northrop Grumman is likely involved as well, while Raytheon and Harris are targeting air traffic control technology.
l Startups are attracting capital. Google cofounder Larry Page is
funding a number of flying car start ups. Sebastian Thrun (who founded Google X and Google’s lf-driving car team) is leading Kitty Hawk and its subsidiary companies Cora and Flyer. Cora describes its mission as "bringing the airport to you" by elimi-nating the need for a runway and “combining lf-flying software with expert human supervision, so you can enjoy the ride.” Last month, the company struck a deal with New Zealand’s domestic airline, establishing a long-term relationship to build the world's first autonomous air taxi rvice. Uber’s autonomous air taxi project Uber Elevate has begun joint testing with Bell in the Dallas-Fort Worth area.
l Megatech platforms are actively involved. Google is devel-oping autonomous drone prototypes and architecture in its Project Wing, as is Amazon with Amazon Prime Air (not to be confud with their planes). Shipping is Amazon's cond largest cost, as we detailed in "Should Amazon Become a Larger Competitor Against Waymo?", and flying cars could reduce delivery costs in both rural and tra
ffic-congested urban areas. For context, we estimate Amazon spends $28bn on shipping in ’18 and $38bn in ’19. For Google, flying cars reprent a TAM expan-sion opportunity as another evolution of its lf-driving car initia-tive, Waymo, which we believe is leading the space (Waymo: 3 Steps to $175 billion). A push into flying cars would partly mirror Uber’s work with Elevate, which hopes to transport people in urban environments to avoid lengthy commutes.
l We also believe national curity concerns will buttress autonomous airborne technology, ensuring the attention of multiple governmental constituencies.
Exhibit 2:
Urban Air Mobility Is Making Headlines
Source: Geekwire, Businesswire, Endagadget, Forbes, Autoevolution, TechCrunch, Morgan Stanley Rearch
UAM economics could be compelling. Think of a 20-mile Uber or Lyft ride home to the suburbs after a night in the city. At an average speed of 25 mph it takes you 48 minutes to get home at $1.50/mile for a total cost of $30. At 10 trips per shift (a busy day) this can bring in $300 of revenue for the driver or $75k per year. With an autono-mous vehicle, that revenue flows to the company. But what if a large drone or autonomous aircraft could make the 20-mile trip at 100 mph and $2.50 per mile? Assuming you'd be willing to pay a premium for speed, you'd be home in 12 minutes for a $50 fee. Faster speeds mean more trips… as many as 40 in an 8-hour shift. Thus $2k of rev-enue per shift a
nd more working hours could yield clo to $1.5 mil-lion of revenue per year per flying car. Exhibit 3:
UAM Economics Comparison
Source: Company websites, Morgan Stanley Rearch
猴岛We would describe the current state of technology for electric autonomous aircraft as underdeveloped, but rapidly improving in areas of pilot substitution, safety, and efficiency. Widespread VTOL adoption faces a number of rious technological hurdles, including battery energy density and noi. Fully functional autono-mous aviation may need to improve to a level significantly greater than that of conventional EVs/AVs for road transport over the next 10 years.
It's early days for UAM payloads and ranges, as well as informa-tion. The most detailed data we hav
e on progress in human transport comes from German-bad Volocopter. It began testing its electric VTOL aircraft prototype in Singapore this year. Currently, the max-imum payload is 160 kg, with maximum range of 17 miles at an optimal crui speed of 43 mph. Most other companies remain in stealth mode and keep their testing specifications clo to the vest. Joby Aviation estimates that its Joby S4 prototype for human travel will be able to travel 150 miles on a single charge at ~200 mph with an estimated capacity of 5 people. Many private companies say they can achieve a maximum range of ~250 miles per charge at speeds of 150-200 mph with payload capacities of 4-5 people (including the pilot), which equates to about 600 lbs for mature eVTOL aircraft.
王强歌手Most package drone prototypes can carry a maximum of ~10 lbs. Amazon has stated it plans to fly drones weighing 55 lbs at speeds of 55 mph for packages of 5 lbs or less. Sikorsky has begun testing autonomous flying technologies on its helicopters. A military-grade helicopter such as the Sikorsky CH53K, however, has a maximum pay-load of 15.9 tons and can carry up to 37 soldiers. The chasm between military grade aircraft and urban eVTOL and drone technology exists becau battery technology (the primary noi mitigant) is extremely underdeveloped. A 50-fold increa in the global annual production of electric cars by 2030 and as much as $100bn or more of capital investment directed at the mass production of EV batteries (>100 gigafactories by 2040) could reasonably drive technology and
