The electric motors of flying taxi company Archer Aviation, are seen on one of the wings of their all-electric aircraft from inside a facility in Hawthorne, California, U.S. June 8, 2021.
The electric motors of flying taxi company Archer Aviation, are seen on one of the wings of their all-electric aircraft from inside a facility in Hawthorne, California, U.S. June 8, 2021. Reuters / MIKE BLAKE

The U.S. Transportation Department's Office of Inspector General said on Monday it will review progress by regulators in establishing the basis for certifying lower-altitude aircraft known as "flying taxis."

While interest in Urban Air Mobility, or highly automated aircraft that can be used for passengers and cargo and are designed to operate in populated areas, has grown substantially, it creates "new and complex safety challenges" for the Federal Aviation Administration (FAA), which is currently reviewing applications for certifying eVTOL aircraft, the watchdog said.

The sector includes electric vertical takeoff and landing, or eVTOL, aircraft, which use electrical propulsion to take off, hover and land vertically. The aircraft typically carry only a few passengers per pilot.

The FAA said it "will cooperate fully with the Office of the Inspector General's audit and looks forward to providing information about our extensive safety work in this area."

In highlighting the challenges for the FAA, the inspector general's office noted that the existing regulation for aircraft certification that is being used is "still primarily intended for traditional small aircraft with a pilot onboard, whereas eVTOL aircraft may be entirely autonomous."

Well-established aviation and automotive manufacturers like Boeing, Embraer, Airbus, United Airlines, Toyota Motor Corp and Stellantis are among companies pouring money into the nascent eVTOL sector.

Morgan Stanley analysts last year estimated the potential market for eVTOLs could be worth $1 trillion by 2040, assuming favorable regulatory outcomes. But they said regulatory risks were one of the most underestimated for the sector given strict safety requirements, especially for operating in dense urban environments, as well as noise and pollution concerns.

The FAA said last week the agency and UK civil aviation authorities have a range of discussions "focused on facilitating certification and validating new eVTOL aircraft, production, continued airworthiness, operations, and personnel licensing."