United Airlines is letting $15 million into Eve Air Mobility, an electric aviation startup owned by Brazilian aircraft manufacturer Embraer, which manufactures air taxis.
Under the deal, United will have to buy 200 of Eve’s electric air taxis as part of its efforts to support transition to environmentally friendly mobility. The company said on Thursday that it has option to purchase 200 more.
The announcement comes on the heels of United’s agreement to purchase 100 electric aircraft from Archer Aviation along with a $10 million deposit.
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Eve Air Mobility develops small, electric vertical takeoff and land known as eVTOL, which can seat four passengers and take off and land vertically like a helicopter.
eVTOLs are designed in such a way that they can navigate through dense cities as taxi service, flying from one rooftop to the other.
But so far, federal aviation regulators have given approval for none of the air taxis to fly passengers.
Eve, which was listed on the New York Stock Exchange in May, may have to meet certain benchmarks before fulfilling its order with United, as the airline described it as a “conditional purchase agreement.”
United did not give details on the conditions but said it expects the first deliveries of the aircraft as early as 2026.
Eve’s eVTOL has a range of 60 miles.
United has a net zero emissions goal by 2050 that it plans to reach without the use of traditional carbon offsets. The investment will be pulled from the company’s venture subsidiary, United Airline Ventures, which it has been using to chase its net zero emissions goal.
United said it is investing in Eve primarily due to its ties to Embraer, which can provide access to parts and supplies for its air taxi service. But the company has had plans to invest and purchase eVTOLs from startups like Eve. Last year, the airline said it would purchase 15 supersonic aircraft from Boom Supersonic, with an option to increase that order to 50 jets.
However, these investments underscore an interest surge in electric air taxis.
In March, NetJets said that it’s buying 150 Lilium eVTOLs, which it plans to operate as Part 135 charter aircraft. The eVTOLs will be based in Florida where Lilium intends to build an eVTOL network serving central and southern parts of the state.
Other airlines including American have also invested in or committed to purchasing air taxis. They said the new technology could reduce emissions, particularly on short routes such as commutes to the airport.
Michael Leskinen, president of United Airlines Ventures, expected the one-way cost to the airport to be about $100 to $150.
Sebastien Borel, Lilium vice president of business said; “The U.S. market will be a good test for us to see how far we can go. But it’s meant to be global, and we’re confident this will drive us to be global.”