Archer CEO Adam Goldstein & BETA CEO Kyle Clark: Building the eVTOL Network | Full Panel

Good afternoon. I'm Matt Bird and I am honored and pretty excited to be here today to talk about a very important subject around advanced air mobility. I'm the chairman of the advanced air mobility round table, NBAA, and these are our customers. So, I have the utmost respect for all the players on the panel here, to my left, Adam Goldstein with Archer, and thank you for hosting us here in this beautiful backdrop. And Kyle Clark from Beta Technologies. Nice you guys to logistically be next door to each other. That's pretty cool. And then my first county brother did and I have no idea what he's doing over here as a government guy on a government salary. But boy, his title is assistant secretary for aviation and international affairs. Okay, so maybe that makes sense that he should be part of but he's also dual headed as the FAA office of airports. So what we're talking about is a consortium. I come from the military. We love acronyms. So ACES is the acronym that we're going to talk about today. And ACES stands for America's Consortium for Electric Skyways. And very very important. And so I'd love to let Adam, Kyle, and Dan say a few opening remarks and then we'll get into some questions. Adam.

Thanks Adam and it's a pleasure to be here. Awesome for your host here. Yeah, Archer and Beta have a long history of positive collaboration around many fronts, one of them being charging. And just a step back in history here, when we started making electric aircraft, it immediately became clear to us even with test flights that we need reliable charging. And it wasn't coming from standard car chargers. An aircraft, you can't really back it up that easily. You need longer cords. You need lower profiles because we have wings. You need super high reliability across all aerospace, including the charging. So the chargers that are developed specifically for aerospace have long cords. They have eight times redundancy versus just singular redundancy. They work first and build second because it's really important to fill that aircraft up. Make sure everything is in the aircraft before you worry about the thing that's most unreliable, the charging, which is, as Chad knows, the aircraft maintenance communication back to the credit card company. The all of these things served us the right requirements to develop an aviation specific charger around the standards that we all agreed to and of course the technical fitness of the charging and the associated cooling systems. So the way I see it is we spent a few years really defining what was right for aviation, making initial deployments, exercising those deployments, refining the products, and now we're on this growth curve catalyzed by the work that Dan's done in the DOT to allow us to start operation. And what we need now is scale. And this scale comes through this mutual collaboration around consortium to develop a lot of chargers throughout the country and throughout the United States that we can all use and benefit from the investments we make across the charge network.

Opening comments.

Yes. Thank you. So, if you want to try to figure out which piece doesn't fit here, when you're sitting on the stage, these three gentlemen on my right, you've got an Air Force Thunderbird, you've got two founder entrepreneurs that are doing absolutely amazing things in what is going to be the new newest generation, the newest industry in aviation. Nothing the likes we've seen since the advent of a helicopter. So I mean sincere appreciation and congratulations to both of you and as well as the rest of the industry for pushing ahead. It is absolutely president's priority, Secretary Duffy's priority and my mandate to make sure that these gentlemen to my right have everything they need to be successful as well as others that are in the AM marketplace. So this is an incredibly incredibly important time for aviation in America. We want the innovation done here. We want these bright minds and these founders and their teams to do their version of their business and develop in America. And we want to just make sure that that I see.

Yeah, that's clear. We're seeing from policy that's being driven from the top and with ACES being announced last week. Both in the cloud. Why is now the moment to solve this charging challenge?

Yeah, I think it's clear to anybody that looks at the economics or the market entry strategy of this type of business. There's going to be a point in time where the chargers have to both preempt and accelerate faster than the aircraft because without that network, not one aircraft can do anything useful. You need at least two nodes. But as the industry matures, there'll be more airplanes than chargers. But we're at the point of the curve where we need to have this type of collaboration and deployment to get a network in place. The other fascinating thing to me is you know we see this in the telephone companies way back in the day the value of the network goes by the square of the number of nodes that are reachable from each other. So as you get higher density and these nodes get deployed the value of AM goes up that allows us to deploy an aircraft into more use cases. As you guys probably know, Beta's first application is through cargo medical logistics. And I'm to speak for Adam, but I'm pretty sure it's for passenger here. And those can coexist and mutually accelerate, but they mutually need a network of chargers and high value points to go to and therefore we need that in place now, Matt, to allow us to deploy the aircraft.

Love it. That leads me to Dan. From your perspective, how critical is this partnership that they announced last week for the regulators and for industry to ensure the future infrastructure that's needed to support this electric aviation and for America to be first.

So yeah, I view it as an accelerant. I mean, it's a and I think it's a natural byproduct of an industry that's just coming up out of the primordial stew, if you will, and going through the developing commercialization journey. I think you're going to see as these technologies mature, more and more of them coalescing around, you know, standards, the market will decide how that all comes together. And when you see companies, players collaborating to help provide that accelerant, I mean to piggyback maybe a little more simply, I'll say Kyle said, I mean that like one fax machine is useless. It's not of any utility until there's a network of them that can be distributed around the system. The vision of America's airports was started decades ago, a couple generations ago, and the vision was being able to be interconnected and have a runway within gliding distance of where you are, right? So, I mean, those that had the vision to build out our interstates, build out our airport network, you got to be able to get in a plane in Miami and fly to Seattle and not worry where you're going to drop in and get gas. So, I mean, the charging network's got to develop the same way. Unless that network is in place the industry is not going to take off the use cases that aren't going to be viable. It's not be business minded and I don't think the industry is going to do this in a charitable way. It has to be a use case, a business case that ultimately allows them to deliver product that someone will pay for, right? So, no buffs, no bub rods, right? So, McCory Capital is source funding behind this beta is the hardware, Archer is the anchor operator. What structure is it as a consortium and why is this consortium better than each company building it on their own at.

Kyle I know this personally because as the operator of Brofield and Alliance Fort, Texas. You offered to put in a charging station. You offered to pay for it. You wanted to fly there. You did fly. It was awesome. You have over 100 charging stations out there across the country. You've flown from Arlington, Vermont to Bentonville, Arkansas. You've flown there. Why do you need a consortium and what's the benefit of doing it the right way?

Yeah. So we did take a leadership position. Our very first route was from Vermont to Benville and we just wanted to make one proof point of mind. We went down the East Coast. Last year we had over 30,000 charging sessions on our devices. We learned a ton from that data. What's reliable? What's not? Where we need to bring multiple charging systems. In the sale down to Florida recently where we sold 34 charging systems, they're putting in duplicates with a high power, lower power system right next to each other. Because one thing that is very different from car charging is that you don't get to go to McDonald's trying to charge there. If it doesn't work, you'll have a partner ticket. You're out of the airport until you charge or leave. And there's very little sense of humor for lack of reliability in aviation. It can be anything along the chain that delivers the charge to the aircraft. So we needed to catalyze that get a little bit of a head. Fortunately, we had support from a number of customers who pay for the majority of our charging systems. The medical customers was a real leader in that. Why you can sort it? It's a great question. Well, those customers want to be a part of this as well, right? So if let's say health and human services have paid for a number of charging systems United Therapeutics don't join the consortium then they end up with they paid for some in hospitals and some airports off airports charge. If they don't join the consortium then they will get access but not access with the insight and potentially the priority access to the charger just like a fuel program that they would have had otherwise. So by pledging the access to the charges that they control access and the awareness and the ability to book them then they increase themselves the opportunity to use the balance. So I think this is starting here with the founding members you know all the pieces of the puzzle you mentioned before we need financing we need the airports we need the standards we need building we need all that stuff coming together pieces of the puzzle to build this beautiful picture of a network of charging. So although we started with this charge number, we can't do a clone. We don't want to do it alone, right? It would be not use of our investors capital to try and build that whole thing out in isolation. As Adam said before, working together in this particular front, working together on certification standards. These are all places where the industry's got to come together further to accelerate.

And we're fortunate today with Dan being here who sits at the intersection of policy and airport operations. It's really important with your position as electric aviation moves forward from development into operations. Just those of us who have come to Farm or World of War, this has come from a beautiful picture to a PowerPoint presentation to a mockup to a chalet to flying vehicles. I mean, we've gone from development to operations. How does this affect your perspective and how can you play a role in moving this forward?

So I think the big thing I kind of said earlier is you know obviously the primary role of regulator is a safety component. So we definitely have to collaborate with industry and you know through the certification process for sure but you know certainly as we look at airport infrastructure and airport operations we've not thought of airports operating like this in this way before and there's different models between short takeoff take official. You know so all that has to be incorporated both you know the certification the safety needs and the safety of how we operate at the airports. I think that's a big piece and like again what I said earlier before we don't want to be an inhibitor to the speed at which these guys are able to innovate. Because we want the business to take off and survive. And I think your point of going from, you know, from, you know, back of the envelope or wherever you guys started at, you know, the employee you're bringing to work at, I mentioned it was up here for a long time. But going from that phase to having a shout at you know a large international air show that's a huge leap and I would argue that they've gotten there fairly quickly and I think that innovation curve is a lot quick and you know it for my view anything that we can do as a regulator to support that along the safety journey is what we do. So going back to my dual hats, I'm really concerned about, you know, the economic viability and making sure that the landscape is one where, you know, where it's fertile ground for these businesses to thrive. But also thinking about operational safety and certification.

So I want to stick with you for a moment. As an airport operator, we have priorities. We have to find runways, taxiways, lighting, fuel farms, facilities. What's your message to other airport operators? Should they be preparing for electric aviation and as they reconcile their priorities, where should electrification and charging systems fall?

So, as I make my rounds to America's airports and any of the airport directors and that is a question I ask every time. So, where are you? What is your thinking about the advanced air mobility? And I think that's a big part of what we're doing with the EIP also is to start to exercise these muscles not only for those that are developing the business models but through the infrastructure truly understanding what we need and we're going to learn really a lot through EIP and doing operations like the last week you know we first operation moving moving in a hard right so I mean what are the lessons learned at that day you know a series of days you know so we are learning along with the industry here and having to innovate on our own. So, you know, whether it's, you know, establishing standards that it's not as simple as repainting the H and changing it to a V, right? I mean, there's other things we got to think about. You know, the charging networks require clean power, reliable power. And what standards, if any, should we be thinking about there so that we're not having to have 50 different sets across America or state local permitting issues challenges. So yeah, there's a lot that we are learning along alongside the industry.

I'm glad you brought up the EV tall integration pilot program. Congratulations to the I don't say this often as an aviator, but congratulations to the FAA for saying they were going to announce this program in March and announcing it in March and rolling it out. So what does success look like from the FA's perspective for the EV2 integration program?

So the first success was the extreme level of interest we had when we first put this out on the street. I mean we didn't think that it was going to land like you there was not going to be a dead cat house with this thing. There was definitely going to be excitement. We didn't anticipate not only the amount of input we received but the quality input. We really only set out then to award five of these programs and in reality we had a hard time getting down to eight and I think it's we're in a better place for having done so. It's again it's going to you know speed that innovation curve along it logarithmic path. But yeah, I think that the big message through VIP is, you know, like I said, exercising the right muscles, learning from the activity and creating the environment where we're looking, we FAA, we want to put businesses into this business. So I think that's the big motivator. That's the big thing we wanted to get done. And it was under no circumstances was the more dangerous like again just to give you a perspective and we talk about just a few years ago when we come to these air shows you just talking to suppliers they were like are you tell like what are you guys talking about like when I work with you know what this is real you know the saffrons of the world companies didn't know what the history was to sort of this Jedi mind trick where the puts out this D puts out this concept because of the and now the states and the cities are like begging to be part of and bidding and trying to jockey to be a part of this thing. It's an unbelievable like mindset switch that's happened. Which is really incredible. And I think ultimately for the IDP to be successful, what we need to do is convince the flying public, the consumers, the regulators, everyone that this is an industry. It's safe and it's actually kind of boring that hey, look somewhere else like move on. So I always like to use the Waymo example in San Francisco. So based in the Bay Area, Waymo comes and everybody's going nuts and my kids are so excited to take one and 6 months later they've all taken on and it's like okay cool. So now I see hundreds of them every day and no one even like questions it. It's gone from this incredible technology phenomena to just a part of everyday life. That's where we need to industry to get to is it's a part of everyday life. The EIP kicks that off. where we can start to see multiple companies flying, everybody being safe and get it to the point where it's just a little part of everybody today and ultimately scale.

We are a unique environment, but you guys are sitting up here together. You're both industry competitors, but you're together on a panel. How did you come together around this idea? What who else should be here next year?