Geely takes stake in German flying taxi start-up Volocopter
Geely will take a minority stake in German flying taxi start-up Volocopter, the latest investment from the Chinese carmaker in Europe’s largest economy after it controversially bought into Mercedes-Benz owner Daimler last year.
The group’s holding company is the lead investor in a financing round by Volocopter to raise €50m, with the aim of bringing its VoloCity all-electric aircraft to commercial launch within the next three years.
In addition to the funding, Geely aims to work with Volocopter to launch air taxis in Chinese cities, adding to the company’s growing transportation arsenal.
As well as owning a host of carmakers including Volvo Cars, sports car brand Lotus and black-taxi maker LEVC, Geely is developing supersonic trains alongside the state-owned China Aerospace Science and Industry. Two years ago the group bought Terrafugia, a US start-up also developing flying passenger vehicles.
Li Shufu, chairman of Geely Holding, said the joint venture with Volocopter “underlines our confidence in Volocopter air taxis as the next ambitious step in our wider expansion in both electrification and new mobility services”.
Geely, he added, was “transitioning from being an automotive manufacturer to a mobility technology group”.
This latest investment could cause friction in Berlin as politicians have previously expressed concerns about the growing influence of Chinese companies on business in Germany.
Last February, Geely’s holding company disclosed a 10 per cent stake in Daimler, worth about $9bn, that had been built up without the knowledge of the German carmaker.
The move was seen as a swoop for one of Germany’s industrial jewels, and sparked a backlash from across the political spectrum.
Since the stakebuilding, the pair have entered talks about joint projects. Geely has taken a 50 per cent stake in Daimler’s underperforming Smart brand, with the aim of rolling out small electric cars in China.
Geely’s investment in the Series C funding round represents less than half of the €50m and will give it a stake of about 10 per cent in Volocopter. Other backers include a range of US and European technology investors, both strategic and financial, while Volocopter’s founders remain its largest shareholders.
Current investors include Daimler and Intel. Ola Kallenius, chief executive of Daimler, said the company was “delighted” to see its partners at Geely “investing into Volocopter”.
Rene Griemens, chief financial officer of Volocopter, acknowledged possible concerns about the move but stressed that Geely would not be a “dominant investor” with a holding somewhat below those of Daimler and Intel.
“They are not buying the technology and there is no technology transfer involved,” he told the Financial Times.
The partnership with Geely, he said, would open up “good sourcing opportunities” for the company with major battery manufacturers. Volocopter, he added, might also use Geely as a manufacturing partner in China.
The VoloCity will fly using 18 individual rotors powered by nine rechargeable and swappable batteries.
Volocopter is among a host of companies tapping into the rising demand for flying vehicles. The market for transporting humans around cities could be worth $674bn by 2040, according to a study in 2018 by bank Morgan Stanley.
Mr Griemens said that Volocopter was one of only two companies with applications pending with the European air safety regulator to certify its aircraft. The company is also in talks with the Chinese regulator.