Losses at Eve Holding continued to increase during the second quarter of 2022, as the former Embraer business unit stepped up investment in the development of the four-passenger eVTOL aircraft it aims to start delivering in 2026. Announcing financial results for the first time since its Wall Street initial public offering in May, the company said that its net loss for the first half of this year increased by $16.7 million to $21.3 million and that the deficit for the second quarter alone was $11.8 million compared with $2.4 million in the same period of 2021.
Balancing the unsurprising losses is Eve's total reported liquidity, including cash, equivalents, and financial investments, of $330.8 million. Cash raised from financing was boosted by the net proceeds so far from its New York Stock Exchange listing of $329.1 million.
The investment required to bring its new eVTOL vehicle to market will be substantial. Eve is committed to addressing all aspects of the envisaged urban air mobility operations, with work in progress to develop new air traffic management systems, and also plans to provide maintenance and support services to operators.
While no revenues are flowing yet, the company has started to log commitments from prospective customers. At the end of June, Eve had a backlog of 1,910 conditional sales agreements for the eVTOL vehicle. Since then, it has received another non-binding order from Embraer and BAE Systems for up to 150 eVTOLs that will be used for defense and security applications. This latest order brings the total number of units in Eve’s backlog up to 2,060, with an estimated value of nearly $6 billion, Eve’s co-CEO Jerry DeMuro said during an August 4 call with investors.
Via letters of intent, those orders have come from 22 different customers consisting of “operators from around the globe with different aviation backgrounds, including fixed wing and helicopter operators, rideshare providers, and more recently, a defense player with the potential to expand the applications of our UAM solutions,” DeMuro said. As the company advances its eVTOL development in the coming years, it will begin converting those letters of intent into firm orders and collecting down payments of up to 50 percent of the value of the vehicles ordered, Eve’s chief financial officer Eduardo Couto said during the call.
The IPO in May, which followed Eve's business combination with special purpose acquisition company Zanite, raised a total of $377 million. “We believe this funding provides an excellent foundation for the development and certification of our eVTOL and other elements of the urban air mobility ecosystem that we expect to launch in 2026,” DeMuro said.
“The bulk [of funds raised] was invested in our eVTOL development, and a portion was used for the development of our service and support solutions and the development of our urban air traffic management system,” Couto said. “We are the only eVTOL company with a complete solution, including the vehicle, service and support, and air traffic control,” he added.
Despite the increased spending, Couto said the company ended the second quarter of 2022 with about $330 million in cash and no outstanding debts. “We feel extremely comfortable with our current cash position, as it gives Eve plenty of resources to maintain our eVTOL development for multiple years,” he said.
Eve officials did not specify when the company expects to begin flight testing a prototype, perhaps reluctant to firm up projections made back in February when they said this was expected "in the next few months." The company hasn’t disclosed many details about its design, other than a cabin mockup it revealed at the 2022 Farnborough Airshow last month. However, Eve officials did explain some recent changes to their design during the call with investors.
“We have been evaluating variations of our lift plus cruise configuration. Now, I believe that the current configuration is mature enough to disclose to the market,” Eve’s co-CEO André Stein said during the call. “The aircraft remains simply designed with eight lifters and pushers, allowing for a reliable and safe platform designed for vertical takeoff and landing and avoiding moving parts,” Stein said. “The simple design is a differentiator in our certification efforts.”
Eve’s chief technology officer Luiz Valentini explained that the company recently made two major changes to the eVTOL's configuration. First, they changed the placement of the rotors to allow for smaller motors that use less power, which “is helpful with respect to the sizing and the weight of the vehicle,” Valentini said. “It allows us to reduce the weight, which of course brings benefits in terms of energy efficiency and noise and other aspects.”
The second major design change Valentini discussed was the replacement of a wing-and-canard configuration in favor of a wing and empennage. “We find that this configuration with the conventional placement of wing and tail gives us a little bit more flexibility to adjust the stability and controllability of the vehicle in the future, and to make minor adjustments if we have to,” Valentini said.
Capable of carrying four passengers and one pilot, Eve’s eVTOL will have a range of about 100 kilometers (60 miles) on a single charge, which will allow it to fly for about 30 minutes. Although the aircraft will be piloted initially, Eve plans to eventually switch over to autonomous operations.
Eve will first seek type certification for its eVTOL aircraft with the Brazilian aviation authority ANAC, which has bilateral air safety agreements with the U.S. Federal Aviation Authority (FAA) and the European Union Aviation Safety Agency (EASA). The company expects to achieve type certification by 2025, with the first deliveries expected in 2026.