Daily Memo: Electric Aircraft Startups Shrug Off Sustainability Headwinds

SAN FRANCISCO–The political pressures driving aviation decarbonization appear to be receding.

The new Trump administration in Washington has drastically deprioritized environmental initiatives while clearing the way for a hoped-for boom in oil and gas production, dealing a blow to proponents of alternative energy. The airline industry seems to understand which way the political winds are blowing, with the International Air Transport Association in March signaling its intent to walk back its commitment to achieve net zero CO2 emissions by 2050.

But if the industry has slammed the breaks on sustainability, the burgeoning advanced air mobility (AAM) sector seems not to have gotten the message. In conversations on the sidelines of the 2025 McKinsey Regional Air Mobility Summit here on March 28, executives from electric aviation startups repeatedly shrugged off the suggestion of an industrywide retrenchment on sustainability.

While sustainability is a welcome byproduct of electric aviation, these executives insist their main pitch to potential customers and investors is improved efficiency, reliability and maintainability, which, when combined with the lower cost of electricity versus fuel, drive operating costs substantially lower than for conventional aircraft.

“Sustainability is really a nice product of what we’re doing, but in aviation the cost structure is the most important,” says Dave Stepanek, vice president and chief transformation officer at Bristow Group, which has placed orders for a range of electric and hybrid aircraft from companies like Beta Technologies and Vertical Aerospace. 

“In this case, going electric allows us to build viable business models with technology that exists today, and it’s going to cost less," Stepanek says. "You throw in geographic barriers, and it’s going to cost less than road transportation, in many cases. So, the message is, ‘Let’s focus on building a sustainable business case that is also sustainable from an environmental standpoint, too.”

The same argument was echoed by Marc Henry de-Jong, founder and CCO of Dutch startup Electron Aircraft, who argues that a substantial portion of short-haul flying can be done more cheaply with existing batteries than jet fuel. His major pitch to customers and investors: the higher acquisition cost of electric aircraft can be quickly amortized given their low operating costs.

“We never led with the environmental credentials–it was just an added benefit,” de Jong says. “By going battery electric, we tackle two of the biggest cost factors–the fuel cost and the maintenance cost ... It’s great to show a picture of a tiny eVTOL [electric vertical-takeoff-and-landing vehicle] that looks really sexy, but the more important question is, can it make money? Because that’s what our investors really care about.”

Riona Armesmith, CTO at electric propulsion startup MagniX, agrees that reducing opearting and maintenance costs will be the largest drivers of industry adoption, while government incentives will ultimately fail to move the needle. MagniX estimates its electric powertrains can achieve cost savings of up to 80% compared to conventional turboprop engines.

“I don’t think legislation that forces higher costs on carbon is going to work if you can’t actually provide a new technology which is lower-cost to operate,” Armesmith says.

Given the limitations of batteries, many startups are looking at the lower segments of the market as a launching ground for electrification. Colorado-based Bye Aerospace is developing the eFlyer 2, a two-seat electric trainer. The company’s CEO Rod Astrow says that reducing operating costs by up to 80% versus conventional trainers can allow flight schools to “double or perhaps triple” their historically slim profit margins.

The economic argument is even greater for the pack of startups that are designing powertrains as retrofits to existing aircraft. For example, David Doral, the co-founder and CEO of Spanish/Australian startup Dovetail Electric Aviation, says that electrification work for a Cessna Caravan can be completed for $1.5 million, compared to roughly $500,000 for a typical engine overhaul. Assuming a 40% improvement in operating costs, he estimates that operators will recoup the $1 million cost delta in three years’ time.

To be sure, attractive operating economics are not the only selling point–excluding emissions reductions–of electric aviation. Mark Moore, an industry pioneer at NASA and Uber Elevate and co-founder of quiet electric propulsion startup Whisper Aero, believes noise reduction will be among the most critical factors to encourage widespread adoption of electric aviation.

“I agree that sustainability, especially with this new administration, is probably not going to get you funding right now,” Moore says. “But the big thing that I learned from Uber [Elevate] was, if you want compelling economics, it’s all about getting to scale, and I can tell you right now, this industry does not get to scale unless it’s quite–either urban or regional air mobility.”

“Look, if all you can offer as a value proposition is sustainability, that’s not enough,” Moore adds. “You’ve got to really have compelling economics for any company to be successful.”

While the recent backpedaling on sustainability has undoubtedly harmed the commercial airline industry’s drive to net zero CO2 emissions, that retrenchment does not appear to have dented morale from the legions of startups pursuing electric, hybrid and even hydrogen-powered aircraft.

It is impossible to predict which way the political pendulum will swing in the coming years. But even absent any meaningful political or consumer pressures, operators may end up going green regardless–but only when they think it makes good business sense to do so.