Futuristic electric vertical-takeoff air taxis have grabbed all the headlines—and billions in venture dollars— but Singapore-based investor RICHARD CHANDLER thinks he has a better idea: conventional battery-powered aircraft that are cheaper to fly and more reliable than turboprops.
The quiet of a frigid November afternoon in eastern Washington state is shattered by an earsplitting roar as an F/A-18 fighter jet screams down the runway at Grant County International Airport, barreling past rows of undelivered Boeing 737 MAX jets. Inside a nearby hangar is a gleaming white airplane that could be a key step on the journey to silencing those jets and erasing their greenhouse gas emissions: the Eviation Alice. The elegant twin-engine, which resembles a Cessna Citation crossed with a balloon animal, is entirely battery-powered and in September became the heaviest electric plane, at more than 16,000 pounds, ever to take flight.
For Richard Chandler, the 63-year-old Singapore-based billionaire investor who controls Eviation and the company that makes Alice’s electric engines, MagniX, it’s personal. An uncle on his father’s side, George Watt, was an RAF test pilot during World War II who worked on the Allies’ first jet engine. An uncle on his mother’s side, Tony Guina, is a car mechanic turned inventor who worked for years developing high-powered electric motors. For years, the New Zealand–born Chandler funded Guina’s work—mostly as a favor to his mother. Chandler kicked around the idea of plugging those engines into Jeepneys in Manila to cut air pollution, but it became apparent that they would always be too expensive for buses. Then, in 2017, he was advised that they might be perfect for airplanes.
All-electric conventional planes would have plenty of upside. Cleaner air, for one, but also massive savings (Eviation claims more than 40%, potentially as high as 80%) on energy and maintenance costs (electric motors have far fewer moving parts). But batteries are decades away from having enough power to propel the big jetliners that carry most travelers. Despite deep skepticism from the mainstream aviation industry, investors have shown interest in electric aircraft—but mostly bleeding-edge vertical-takeoff and -landing ones. Billions have been invested in sci-fi visions of air taxis that could hop from rooftop to rooftop. Joby Aviation, a Northern California company, raised $820 million in venture funding from the likes of Intel and Toyota before going public in a $1.1 billion SPAC deal in 2021.
Chandler had a different take: Why not electrify small conventional planes? It would be much cheaper and easier to change just the propulsion system. Plus, fewer changes would make safety regulators more comfortable. The simplest solution would be to swap in green electric engines for old gas-guzzlers on existing aircraft, which was his initial plan with MagniX. Or you could build an entirely new plane. Like Alice.
In 2019, he bought a 70% stake in Eviation, an Israeli startup, to show how well MagniX’s engines could perform in an airplane designed from day one around electric propulsion. Chandler sees the nine-passenger Alice as the Tesla Model S of electric aircraft. Like Elon Musk’s first $95,000 battery-powered car, Alice will be expensive ($7 million to $8 million, more than double a basic turboprop with similar seat capacity) and range-challenged (250 miles at best). But Chandler believes Alice will catalyze the development of electric aircraft in an industry still skeptical of them. “It’s a forerunner into a seismic shift in aviation,” he says.
He’s accustomed to betting against the conventional wisdom. Starting in the mid-1980s, he built a $2.6 billion fortune making combative, contrarian investments across a wide range of industries (telecom, utilities, finance) in Russia and developing nations in Asia and Latin America. In all, he has spent about $180 million on Eviation and tens of millions more on MagniX. Both companies have been relocated to the Seattle area to take advantage of the Pacific Northwest’s Boeing-anchored aerospace ecosystem.
Eviation doesn’t have meaningful revenue yet. MagniX landed a $74 million NASA contract in 2021 to work on electric propulsion for larger aircraft, and it has the clearer near-term growth path: It has already sold a handful of engines to customers experimenting with putting them in older aircraft to give them a green makeover. Range would be lower, but for some aviation outfits, it promises to be enough now, with future improvements in batteries offering the potential for more. Vancouver-based Harbour Air, for example, has been testing a MagniX-powered Beaver seaplane since 2019. It believes it will be able to carry three or four passengers for a half-hour with reserves, more than enough for its many local 25-minute routes. United Therapeutics is aiming for hourlong flights with MagniX electrified Robinson R44 helicopters to deliver transplant organs. MagniX is expecting the FAA to clear the engines for general use in 2024.
It’s unclear how much they’ll cost. The company had previously said it was aiming for a retrofit of a small conventional plane with its top-of-the-line 650-kilowatt engine to cost roughly the same as a routine overhaul of a comparable turboprop engine, which can run around $300,000. But Chandler now says MagniX’s engines have to be priced higher to make up for the Achilles’ heel of their expected durability: lower revenue from maintenance, which is the lifeblood of conventional engine makers.
Worldwide, McKinsey estimates roughly 12,000 older small aircraft are suitable for conversion to battery electric or hybrid systems (MagniX is also developing these). In addition, the company is working with Southern California startup Universal Hydrogen to power 40-seat seat regional airplanes with fuel cells.
But Chandler loves Alice’s prospects. He and other evangelists hope planes like it will expand regional service to under-used small airports that are too expensive for current planes to fly into, for both package delivery and passenger service.
“Instead of taking trains or cars on 200- to 250-mile journeys, it’s going to be so much more fun taking an Alice that’s on-demand at a regional airport near you,” he says. “This has the potential to reshape how we think about aviation for the man in the street.”
Two hanging questions are whether Alice will actually fly that far, and whether there’s really demand for it. Eviation touts orders topping $2 billion for almost 300 planes, but nearly all of them are nonbinding.
One firm order: launch customer DHL, which is ponying up for 12 cargo-configured planes. Light e-commerce boxes are a good fit for Alice. The plane has an unusually wide 6-foot-4-inch midsection to incorporate 8,200 pounds of batteries, which leaves it with less overall payload capacity than planes of similar size, but lots of interior volume.
Another potential launch customer, New England–based short-hop carrier Cape Air, has signed only a letter of intent. Chairman Dan Wolf likes the promise of saving money on fuel and maintenance, but he’s waiting to see whether Eviation can deliver on key elements of that—a battery pack with long service life and affordable replacement costs–and whether the airline can then find ways to fly Alice more than its current planes so that those operating savings can pay down Alice’s high price.
Then there’s the range question. Eviation insists batteries are available today that would enable it to fly 250 miles. Maybe, says Shashank Sripad, a battery researcher with a Ph.D. from Carnegie Mellon, but they’re in the early stages of being rolled out, and it’s not certain any will prove to be aviation-grade in durability, safety or affordability by 2027, when Eviation plans to bring the plane to market. (Sripad is a member of this year’s Forbes 30 Under 30.)
THE SOUND OF SILENCE — MagniX’s most powerful motor generates the equivalent of 850 horsepower yet is quiet enough that Eviation expects Alice won’t be subject to airport noise curfews.
Courtesy of Eviation
For 250 miles plus a safety reserve, Sripad estimates Alice will need cells with energy density between 340 and 400 watt-hours per kilogram. The highest currently mass-produced for cars: 300.
In part, Chandler expects Alice to sell because he’s making it beautiful. He’s sweating the details, citing his many hours on business jets as a globetrotting investor, and the eye for design he developed in his 20s as a women’s wear stylist who helped his family expand their department store in Hamilton, New Zealand, into a chain of boutiques. Selling them in 1986 gave Chandler and his brother, Christopher, the $10 million in seed capital they parlayed into a combined $5 billion fortune before splitting up in 2006.
A more grounded reason for optimism: government mandates and carbon taxes. France has banned short-haul flights when trains are an option, but low-emission planes are exempt. Other EU countries are likely to follow suit. Longer term, Norway plans to transition entirely to e-planes on domestic routes starting in 2040.
Upsetting the equilibrium: rifts with Eviation’s founders, who are upset by Chandler’s seemingly unyielding commitment to MagniX engines. CEO Omer Bar-Yohay, who first sketched Alice while at a bar in Vienna in 2014, was ousted in February. Aviv Tzidon, a serial tech entrepreneur who holds a board seat, acknowledges there are no alternatives to MagniX right now, but he wants to solicit bids. Perhaps established jet engine makers like Rolls-Royce or French aerospace giant Safran would step up to compete—and deliver lower prices.
Kiruba Haran, a University of Illinois engineering professor, credits MagniX for getting engines in the air. But the Magni650 provides only “modest” power for its weight, he says, while big companies and academics are making progress on megawatt-scale motors.
Chandler believes MagniX has a commanding lead. He claims that both General Electric and Pratt & Whitney are trying to buy the company from him (both companies declined to comment). The engine titans might have bigger budgets, but also the distractions of lucrative legacy products. Like Tesla, Chandler thinks MagniX’s singular focus on electric will keep it ahead.
“We’re climbing Everest here,” he says. “And guess what? It was a New Zealander who got there first.
ILLUSTRATION BY Patrick Welsh for Forbes
HOW TO PLAY IT
By John Buckingham
The secular shift to electric vehicles, including original equipment manufacturer investments and public policy support, bodes well for continued strength in demand for lithium-ion batteries. Not surprisingly, North Carolina’s specialty chemical producer Albemarle has been a major beneficiary, with 70% of current revenue coming via its lithium business. Boasting large, globally diverse and low-cost production, EPS estimates have soared to more than $21 a share this year and $27 for 2023. There is no shortage of EV makers, but choosing a long-term winner isn’t easy and few EV stocks are reasonably priced. I favor a “picks and shovels” approach as Albemarle at 11 times projected earnings appears to be a safer way to play the proverbial EV gold rush.
John Buckingham is chief investment officer of AFAM Capital and editor of The Prudent Speculator.