February 19, 2025 • 29 mins
In an effort to decarbonize, airlines are focusing most of their attention on sustainable aviation fuel, but Heart Aerospace believes the key to decarbonizing regional air travel is through electrification. In this episode of Bloomberg Intelligence’s ESG Currents podcast, Heart Aerospace Cofounder and Chief Executive Officer Anders Forslund joins BI director of ESG research Eric Kane to discuss the future of aviation. They discuss Heart’s founding, key partnerships and value proposition, as well as the next steps for the company’s ES-30 aircraft, which can fly 30 passengers and has an electric range of 200 kilometers. CO2 emissions from aviation account for roughly 2.5% of global energy-related emissions. This episode was recorded on Feb. 13.
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Episode Transcript
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Speaker 1 (00:09):
ESG has become established as a key business theme as
companies and investors seek to navigate the climate crisis, energy transition,
social mega trends, mounting regulatory tension, and pressure from other stakeholders.
The rapidly evolving landscape has become inundated with acronyms, buzzwords,
and lingo, and we aim to break these down with
(00:32):
industry experts. Welcome to ESG Currents, your guide to navigating
the evolving ESG space, one topic at a time, Brought
to you by Bloomberg Intelligence, part of Bloomberg's research department
with five hundred analysts and strategists working across all major
world markets. I'm Eric Kaine, director of ESG Research for
(00:53):
Bloomberg Intelligence, and today we're talking about decarbonizing aviation. Aviation
emisis account for roughly two and a half percent of
global energy related emissions, and airlines are typically focusing on
sustainable aviation fuel as a key driver for their decarbonization efforts,
which of course presents numerous challenges, and while fleet renewal
(01:17):
is also part of the equation, we don't typically hear
about the electrification of air travel, but on today's episode,
that's the focus and we're joined by the co founder
and chief executive officer of Heart Aerospace, Anders Forceland. As
we'll hear more about Heart Aerospace aims to decarbonize and
(01:38):
democratize air travel through electrification. Anders, thank you so much
for taking the time to join the program.
Speaker 2 (01:44):
Thank you, Eric, I'm excited to be here, wonderful.
Speaker 1 (01:48):
So maybe to get us started, if you could tell
us a little bit about Heart Aerospace and the problem
that you are ultimately trying to solve for.
Speaker 2 (01:55):
Yeah, so happy to do so. So. At Heart we're
our business is to do carbon nice and demarkeratize air travels.
So what we're doing work concretely is we're building hybrid
electric planes. Our first aircraft is to EUS thirty's it's
a hybrid electric aircraft for thirty passengers and it's propelled
by a combination of electric motors and traditional turboprop jet engines.
(02:20):
The exciting thing about the aircraft is this has an
all electric value proposition. It means that it can fly
all electrically. We actually don't turn the turboprop engines on
and we can fly routes up to twoe hundred and
twenty five miles with this all electric system. We turn
these turboprops on and we can fly up to five
hundred miles, which is really within the range of what
(02:40):
a thirty seaters like. Even traditional thirty seater aircraft don't
really fly longer than five hundred miles, so we're sort
of capturing that entire market. And also this hybrid system
allows us to account for reserves. So one in about
a thousand aircraft gets redirected in the US, and you
(03:01):
need to have if you want to carry batteries for
this one in one thousand occurrence. Then the aircraft becomes
excessively heavy and you cannibalize a lot of the range.
So that's why we think hybrid is the right move
as we go to electric air travel.
Speaker 1 (03:16):
Very interesting, so it's quite clear whether you're talking about
the all electric range, which again you said it was
about one hundred and twenty five miles, or the hybrid
range that we're talking about regional air travel. Is that right?
Speaker 2 (03:30):
That's right, and the big market we're seeing here obviously
we have earned partners and investors, customers like United Airlines,
Air Canada, et cetera. And what we're really trying to
do is to restore a lot of the connectivity that
has been lost in the US in the past decades,
(03:53):
and many people have felt it right. So, since the
nineteen nineties, we've seen hundreds of communities that have lost service.
And we used to be fleets of hundreds of thirty
seeredter aircraft flying around the US, and a lot of
people you talk to say, we remember that time. It
was much more convenient. And the reason that we stopped
(04:14):
flying those aircraft was not because they didn't fly far enough.
It was because the unit economics did not work when
you put jet engines on small planes flying short routes.
When you bring electric motors to the equation, they're actually
much better at scaling to smaller aircraft. They're much more
fuel efficient in all phases of flights, which means that
they are very very competitive for small planes flying short routes.
(04:37):
So you're kind of changing the equation of how aircraft
can be operated.
Speaker 1 (04:43):
That's super interesting, and maybe just thinking about kind of
the addressable market, if you will. When we think about,
you know, air travel, most of us often think about,
you know, the big planes, long haul flights, and the
contributions of those two overall co two emissions I view,
were to electrify kind of the regional air travel. Do
you have a sense of, you know, what the overall
(05:06):
reduction in you know, aviation associated emissions might be.
Speaker 2 (05:12):
So yeah, I mean so maybe if we step back
a little bit, right, So, first of all, like as
you mentioned, it's about two and a half percent of
global admission aviation. This year passed, it became a trillion
dollar market commercial air travel, and it's also about one
trillion kilograms one gigaton of CO two being admitted. So
(05:35):
for every dollar spent on an airplane ticket, you're emitting
about one kilogram of ZEO two pretty consistently. Now, whilst
you know it's the long haul flights that are emitting
most per flight, it's actually the short halls that are
emitting more most per mile, right because they're they're the
most inefficient. It's actually and it's in the sort of
(05:55):
mid range that you have the most fuel efficiency. About
one third of emissions and two thirds departures are from
routes that are under eight hundred miles. And as the
technology scales, we're not going to be able to use
electrification to across the Atlantic or fly the very long
(06:15):
haul but hybrid electric will certainly play a role in
the short haul market and the narrow body market.
Speaker 1 (06:22):
Very interesting and in a bit I want to get
back to that point that you just made about, you know,
whether we can electrify the long haul flights, but maybe
before we do, curious just to hear a little bit
kind of about your background and the path that herd
Aerospace has taken, you know, from maybe the idea that
(06:44):
you had to where you are right now.
Speaker 2 (06:46):
Yeah, So my background is I have a PhD in
aerospace product development. Back then, I used to work at
at with jet engines, and I was a researcher at MIT,
and in my spare time I started tickering with toy drones.
I was so fascinating that you could be working with
(07:07):
this new technology of electric motors, which it's so simple,
that's the beauty of it. Whereas jet engines are remarkably
complex have hundreds of moving parts, an electric motor really
has one moving part and they scale so actually what
we built when we built our first first electric motors
for our aircraft, they operate with the same principles and
(07:29):
the same design as a consumer drone, which is completely fascinating.
So we started as actually a research project in Sweden
after Norway had announced that they want all their domestic
flights to be electric by twenty forty. They made that
announcement in twenty eighteen, and we saw that there was
(07:50):
no product to meet that demand, and then this became
a company. We got into y Combinator here in California,
so that's where we really started the company, and in
the past six years we've been growing both our team
our investor base. You know, it's been remarkable. You've seen,
you know, some of the world's leading climate investor invest
(08:10):
in this program. You've seen some of the world's leading
airlines not only investing in the program but also making
large orders of these aircraft. But most excitingly, we've seen
people really from all over the world coming in to
join our team and making this mission of reality. So
what kind of started out a kitchen table six years
ago where we now have a full scale aircraft prototype
(08:34):
in a hangar in upstate New York where we're going
to be flying the world's largest electric aircraft in the
first quarter of this year.
Speaker 1 (08:43):
Super exciting and I do want to hear more about
that first flight later this year, but maybe before we
get to that. I think most of our listeners are
probably you know, at least somewhat familiar with electric vehicles,
probably a lot less familiar with electric airplanes. But when
(09:04):
we think about electric vehicles, I think they're typically you know,
three challenges that come to mind for maybe people who
are you know, considering the technology, and those typically revolve
around ideas of range, charging, and the price. Right. I
think we talked a little bit about the range. Curious
to hear how you're solving for you know, charging, and
(09:27):
the price component whether you know these airplanes will be
you know, cost competitive with with.
Speaker 2 (09:33):
Yeah, And I mean that's that's the real beauty of
electrification is that every time electrification is introduced to a
new mode of transportation, it reduces the operating costs. You know, Actually,
if you go into buy it like a Tesla today,
they have a box that you can take which is
like includes everything that you save on gas in the
first five years, and they see a very low price,
(09:56):
right because they know that this is how people actually
motivate buying these aircraft, right or by buying electric cars.
And it's the same for aircraft, only that the utilization
of an aircraft is so much higher than a utilization
of a car. Right a car mostly stands on its
owner's driveway and maybe it's used once a day. Aircraft
(10:18):
are being flown and really like cycling the batteries fully
ten times a day. So the cost of the batteries,
the cost of all these other you know, the systems
are actually being offset by the fact that that you're
not using a jet engine, you're not using jet fuel,
you're not wearing a jet engine. They require a lot
(10:40):
of maintenance because you have electric motors that essentially, as are,
are so robust that they don't need to be replaced
for the entire life of the aircraft. So what you know,
we try to make this aircraft competitive in acquisition price,
but also you know, the real winnings in this are
in these lower operating costs. And if you speak to
you know, cab drive vers, for instance, they will attest
(11:01):
to the fact that, you know, going electric really makes
a difference to the unit economics of any commercial operations.
Speaker 1 (11:08):
Very interesting and when we think about you know, batteries
and what's needed to ultimately electrify an airplane or a car,
obviously battery technology is evolving, you know, pretty quickly I'm
curious to hear, you know, how your planes may or
may not be able to ultimately accommodate new technology as
(11:30):
new technology is developed.
Speaker 2 (11:33):
Yeah, I mean, we're really This has been one of
the most exciting part of this program is that initially
this aircraft will have a range of one hundred and
twenty five miles, but as battery technologies improved, we project
that that number will increase quite substantially, in fact, nonlinearly,
because the part of the battery that we need for
(11:53):
reserves are going to be less. So we see this,
you know, going up to two hundred miles, et cetera
before the end of this, before the end of this
or the middle of the century. So that's really exciting.
We don't really know how and when and how these
technologies are going to work, so we're really being quite
(12:16):
quite deliberate about building a technology that is sort of
future proof and sort of battery technology agnostic.
Speaker 1 (12:23):
Very interesting, and I guess kind of one other, you know,
general question when we think about the potential carbon savings
associated with electrification, A lot of that ultimately depends on
the grid essentially where you're charging those batteries. Is this
something you're looking to control for in terms of maybe
purchasing renewable energy or how do you how do you
(12:44):
account for that element of it.
Speaker 2 (12:46):
So, yeah, and you're right. And every time we speak
to a new airline or engage with you know, in
different different jurisdiction, you know, there's variables that are changing
for every airline. It can be things like pilot wages
for you know, landing fees and obviously the cost of electricity.
We have the same problem with the price of oil, right,
(13:09):
that's the airlines are extremely sensible sensitive to the volatility
the price of oil. What we're offering with electrification is
that we are you know, we give violins the opportunity
to actually generate the electricity locally. So for instance, at
our airport in Sweden where we're based and we have
our hanker, we have one of the largest solar panel
(13:30):
parks in northern Europe. And so we see this happening
over over that that airports want to be a node
in this new renewable energy infratructure and that controlling their
own destiny, right and especially if you look at you know,
the developing world, right we air travel is still only
globally in its infancy. There's about six billion people that
(13:54):
have never been on an aircraft and are looking to
be connected to this infrastructure. We're seeing massive investments in
countries like India, in a place like you know, a
continent like Africa. We have about a forty percent premium
on jet fuel compared to the US and Europe. Right,
so the delta here could be could be quite substantial.
And I really we think, you know, one of our
(14:17):
lead investors is break Through Energy is Bill Gates's foundation.
They really adamant about this belief in the green negative
green premium that if you launch a product that is
green but it's not cost competitive, you might get the
Norways of the world or the you know, the world's
rich countries to adopt it, but you won't get the
middle income countries to adopt this technology. So we're laser
(14:40):
focused on building a product that is you know, has
not just an electric plane, but an overall superior regal plane.
Speaker 1 (14:48):
That's really interesting. I like the idea of the negative
green premium. It's not what I heard before. Super interesting.
So before you alluded to the idea that electrification will
will likely not be the answer for long haul air travel,
can you tell us a little bit more about you know,
why that's the case, and ultimately, if you have a
view on how ultimately we will decarbonize long haul aviation,
(15:12):
then yeah, I mean.
Speaker 2 (15:14):
Jet fuel is incredibly energy dense, So if you wanted to, like,
you know, the energy density of jet fuel is is
something like thirty to forty times that of batteries, and
then electric motors are about three times as sufficient the
jet engines, so you get to maybe to a factor
twelve or something like that, but it's still if you're
(15:36):
going to add about twelve times the weight for a
long haul aircraft, it's going to be very challenging if
you want to use batteries. Now this sort of so
when we design shrophole aircraft with batteries, we have the
sort of same mass fractions of batteries as a long
haul has aircraft has jet fuel. So it's it's kind
(15:57):
of interesting. But the hybrid part is a little bit
what is the sort of design variable that you can
play with, So even if you go long haul, you know,
we've already seen that other systems on board aircraft are
becoming electrified, and even the propulsion system can be made
to be more efficient even if the primary energy source
(16:19):
is jet fuel if you're running with a hybrid now,
and I think there's a lot of a lot of
I think SAFF is the best bet for energy source
if you want to decarbonize long haul. But it's expensive, right,
and that's why we need to figure out ways to
make use less of it.
Speaker 1 (16:41):
Absolutely, it's expensive and also not really available at the scale.
Speaker 2 (16:45):
That's not available at the scale, right.
Speaker 1 (16:47):
Yeah, absolutely, So your company is private at this point.
You mentioned, you know, partnership with Breakthrough Energy, for example.
I'm curious if you could walk us through, you know,
how you raise money and describe any of the kind
of key investors and relationships that you have in addition
to you know, Breakthrough as we mentioned.
Speaker 2 (17:07):
Yeah, I mean we so, first of all, you know,
building an aerospace company from scratch is a very challenging opportunity,
a very challenging thing to do, right. What we've seen
in the past, in the past, you know, decade, like
the playbook has started, start is starting to be written
(17:30):
on this, right, and we've seen companies some in this
ev tall space. We're building electrical vertical takeoff and landing
essentially like helicopters that can fly longer and and do
on electric and everything from supersonic aircraft, et cetera. So
we're seeing that there's the Silicon Valley ecosystem is willing
(17:52):
to invest. I think, you know what, we've seen the
disruption that we've seen in the car industry as obviously
have people looking at the air space industry and recognizing
that there might be the same potential here. We're also
seeing in industry that is suffering I think a little
bit from the lack of competition. So investors are key
(18:14):
in identifying what to move the needle, like is there
a paradigm ship to be had, So we've been following
that standard. You know, we started y Combinator, which is
where a lot of these companies have gotten their starts,
which is the best accelerator in the world. Then you know,
you go through a stage of speaking to climate funds,
getting strategic investors like United Airlines on board, and you're
(18:37):
building building your tent. Obviously also really dependent on grants
and other kind of governmental support. Historically, there's never been
an airline or an airspace OEM that's been successful without
some form of government support. And we've been fortunate enough
to be getting that kind of support both at our
(18:58):
operations in Sweden and now in North America.
Speaker 1 (19:00):
Very interesting. I want to follow up on the government
support idea in the minute, but maybe taking a step back,
you mentioned, of course partnerships with a couple airlines, Air Canada,
United Airlines cheeros to hear more about those partnerships, and
you started to talk about it a little bit earlier,
but ultimately, you know, what is the value proposition for
(19:20):
them at this point?
Speaker 2 (19:22):
So the value proposition I think is two fold. I mean,
so first of all, it's about restoring connectivity. It's about
you know, replacing some of the routes that they are
operating already now that has connectivity, but it's operating at
a at a better under economics. Obviously, United is also
a big leader on sustainability and want to be first,
(19:45):
and I think are being kind of innovative in ways
of using their thought leadership and their brand to to
sort of create momentum for companies that are developing these
new technologies and and But the real winnings for for
a company like United is not only the routes themselves.
(20:06):
It's that these small routes, short routes, they are the
tributaries that are feeding the rivers. Right, So if somebody
gets gets on a plane, like, for instance, if you're
flying from Palm Springs to Aspen, Colorado, right, you jump
on an E S thirty, you'd fly to lax You
(20:28):
take a larger aircraft and fly to Denver, and then
you get on an E S thirty and fly to Aspa. Right.
So what United is able to do then is obviously
to monetize the large route as well and win in
a competitive business, you know, offer a greater value proposition
to their customer than their competitors are doing. So it's
(20:48):
sort of a win win there.
Speaker 1 (20:50):
Very interesting. Yeah, so you mentioned a few moments ago
government support. Obviously this is a topic that's getting a
lot of attention, and here in the US with kind
of a shift in the administration and the administration's feelings
towards all things climate and climate tech. I'm curious to
(21:11):
hear you know more about the support that that you
mentioned that you've gotten, you know, from government, and whether
you think there are ultimately any particular you know, policies
or incentive structures that need to be put in place
to really you know benefit heard aerospace and ultimately, you know,
what what future policy you think what would help the
(21:33):
business the most.
Speaker 2 (21:35):
Yeah, I mean, I think it's too early to say
how what what changes are happening here. We've been fortunate
enough to have support from the the f A, A,
R by E, et cetera, and and right now we
don't really know what's happening to those programs. I think
as a general rule, I think across the aisle politically,
(21:56):
people want to see American leadership and aviation. UH. We're
seeing massive investments happening in China on on hybrid electric
battery development and also just on aviation in general. We
want to make sure that we maintain that leadership, and
we want to make sure that there's a healthy ecosystem
of incumbents and and startups that are you know, challenging
(22:20):
each other to sort of build it, bring a competitive
market and push each other forward. So I remain hopeful
that that's that's the policy that is going to be
be there in the future as well.
Speaker 1 (22:32):
Very interesting and you know, we know, of course, one
factor that's influencing you know, discussion of decarbonization, uh in
air travel is the development of course, which is essentially
you know, the carbon offset requirement for airlines. Do you
see that market ultimately, you know, pushing companies potentially towards
(22:56):
electrification and kind of how do you see that evolving
over time?
Speaker 2 (23:00):
Yeah, for sure. I mean airlines are feeling the pressure.
I mean it's it can be the mandate, it can
be the social pressure. You know, in Sweden we still
have a very lot large flight shaming movement. You see
domestic air travel gone down since Katumbadi and that sort
of movement. So but but it's difficult or it is
(23:22):
different in every jurisdiction in every place. In general, I
think what what I think is a success factor for
for a startup or anybody that's trying to transform and
you know, bring new technology and is adaptability. It's about
(23:44):
it's I mean Darwin said, you know, it's not the
most strongest species that survive, we're the ones that are
most intelligence, is the ones that are most adaptable to change.
So how I'm really thinking about this as an entrepreneur
is there is always uncertain There is always uncertainty about
what programs are going to be there, how high up
(24:05):
of the agenda, climate is going to be, you know,
where we're going to be seeing these drivers, is it
going to be you know, we've you know, only in
these six years you've seen you know, the pendulum swinging
back or firth between Europe and the US IRA you
know all of these things, right, you see companies come
and go, So all of that you have to kind
(24:26):
of take a step back and be like, how do
I play this kind of almost as a as you know,
some sort of portfolio management. You're like, risk is the
currency of innovation, and you have to like be able
to wake up every morning and say, hey, the chess
piece has moved overnight. Here, what's my you know, what's
(24:47):
my comeback on this?
Speaker 1 (24:48):
That's super interesting And again I like the idea of
risking the currency of innovation. So maybe just as a
final question, of course, you mentioned, you know, the upcoming
flight later this year in upstate New York. I was
wondering if you could tell us a little bit about
more about that, what that means for hard Aerospace, and
ultimately what your goals are for the company, maybe looking
(25:11):
out to twenty thirty fifty.
Speaker 2 (25:14):
Yeah, So the aircraft we're going to be flying out
of Plattsburgh, New York, we've built from the ground up
with the very small team. It's an all carbon fiber
composite aircraft and it's the by far the largest electric
aircraft that has flown. So it's about one hundred and
six foot wingspan, it's it's about ten tons, and the
(25:38):
final aircraft is going to weigh about twice that. And yeah,
it's going to be demonstrating to the world for the
first time that at thirties eater, that's a lot, you know,
that's quite a large number that is possible with electric.
Hopefully the flight itself will be undramatic. Right, we're testing
(25:59):
everything extensively on the ground. We're doing you know, wing
loading testing, we're doing systems testing, e am I testing
all of these things to have a very very smooth,
smooth light where we're just gonna you know, take off
and land. And the way you guarantee safety as well
is that you you do the airfield in Plattsburgh has
(26:19):
a very long runway, so you could actually kind of
first you start with low speed taxing, then you start
with go into high speed taxing, then you do a
little jump on the runway, so yes, take off and
you know, go just a few feet above the ground
and then land again. But and you get a very
good sense of you know, the robustness of your propulsioning system,
(26:40):
the controllability of your aircraft, et cetera. From that, whilst
not being at any you know, was minimizing the danger.
Speaker 1 (26:48):
Super interesting and then maybe looking ahead to twenty thirty
twenty fifty, where do you see hard aerospace but or
some goals.
Speaker 2 (26:56):
Yes, So what we've been working quite hard at is
to marry a sort of that sort of New Silicon
Valley ethos of doing an iterative product development with working
in a very regulated industry. So how we're doing this
is if we're dividing our development in two phases. The
first is when we fly experimentally like we're doing now.
(27:18):
So we call this aircraft X one. It's an excer
first exper mental demonstrator. We go into the X two,
which is our second extremntal demonstrator, but it's also our
pre production prototype. It's flying on an experimental permit, but
it's with the components and the technology that will that
will be very reflective of what's going to be on
our first conforming aircraft, and we're going to be flying
(27:38):
that before the end of next year. We're actually even
like we're starting to build our first part for that
already now, and then on that we go into the
certification program where we're actually flying type conforming aircraft to
cost a period of about three years, and we're looking
to have the type certification by twenty twenty nine and
(28:01):
enter into service shortly thereafter.
Speaker 1 (28:03):
Well, super exciting.
Speaker 2 (28:06):
Yes, it is very exciting, and it's a novel way
of looking at product development, and that's really my passion.
It's about about building, you know, learning, iterating, and making
things better. I think it's the way aerospace has been
done traditionally. It's been very incremental approaches from new designs
(28:28):
and you try to get everything perfect on the first try.
When you're bringing this large degree of innovation a brand
new propulsion system, you have to work in a more
iterative way. And I think we've seen the space industry
has led the way a lot, and how to work
in that in that.
Speaker 1 (28:44):
Framework very very interesting. Well, Andrews, thank you so much
for taking the time to chat. We certainly wish you
in the company the best of luck with that upcoming flight.
Speaker 2 (28:54):
Thank you so much. It's been my pleasure to come
in here and talk about this. It's obviously a very
exciting program, wonderful.
Speaker 1 (29:00):
Thank you so much so As always, you can find
more information on all things ESG, including decarbonization of air
travel by going to our dashboard bispace ESG go on
the Bloomberg terminal and if you have an ESG quandary
or burning question you would like to ask bi's expert analysts,
please send us an email at ESG Currents at Bloomberg
(29:22):
dot net. Thank you very much and we'll see you
next time.
ESG has become established as a key business theme as
companies and investors seek to navigate the climate crisis, energy transition,
social mega trends, mounting regulatory tension, and pressure from other stakeholders.
The rapidly evolving landscape has become inundated with acronyms, buzzwords,
and lingo, and we aim to break these down with
(00:32):
industry experts. Welcome to ESG Currents, your guide to navigating
the evolving ESG space, one topic at a time, Brought
to you by Bloomberg Intelligence, part of Bloomberg's research department
with five hundred analysts and strategists working across all major
world markets. I'm Eric Kaine, director of ESG Research for
(00:53):
Bloomberg Intelligence, and today we're talking about decarbonizing aviation. Aviation
emisis account for roughly two and a half percent of
global energy related emissions, and airlines are typically focusing on
sustainable aviation fuel as a key driver for their decarbonization efforts,
which of course presents numerous challenges, and while fleet renewal
(01:17):
is also part of the equation, we don't typically hear
about the electrification of air travel, but on today's episode,
that's the focus and we're joined by the co founder
and chief executive officer of Heart Aerospace, Anders Forceland. As
we'll hear more about Heart Aerospace aims to decarbonize and
(01:38):
democratize air travel through electrification. Anders, thank you so much
for taking the time to join the program.
Speaker 2 (01:44):
Thank you, Eric, I'm excited to be here, wonderful.
Speaker 1 (01:48):
So maybe to get us started, if you could tell
us a little bit about Heart Aerospace and the problem
that you are ultimately trying to solve for.
Speaker 2 (01:55):
Yeah, so happy to do so. So. At Heart we're
our business is to do carbon nice and demarkeratize air travels.
So what we're doing work concretely is we're building hybrid
electric planes. Our first aircraft is to EUS thirty's it's
a hybrid electric aircraft for thirty passengers and it's propelled
by a combination of electric motors and traditional turboprop jet engines.
(02:20):
The exciting thing about the aircraft is this has an
all electric value proposition. It means that it can fly
all electrically. We actually don't turn the turboprop engines on
and we can fly routes up to twoe hundred and
twenty five miles with this all electric system. We turn
these turboprops on and we can fly up to five
hundred miles, which is really within the range of what
(02:40):
a thirty seaters like. Even traditional thirty seater aircraft don't
really fly longer than five hundred miles, so we're sort
of capturing that entire market. And also this hybrid system
allows us to account for reserves. So one in about
a thousand aircraft gets redirected in the US, and you
(03:01):
need to have if you want to carry batteries for
this one in one thousand occurrence. Then the aircraft becomes
excessively heavy and you cannibalize a lot of the range.
So that's why we think hybrid is the right move
as we go to electric air travel.
Speaker 1 (03:16):
Very interesting, so it's quite clear whether you're talking about
the all electric range, which again you said it was
about one hundred and twenty five miles, or the hybrid
range that we're talking about regional air travel. Is that right?
Speaker 2 (03:30):
That's right, and the big market we're seeing here obviously
we have earned partners and investors, customers like United Airlines,
Air Canada, et cetera. And what we're really trying to
do is to restore a lot of the connectivity that
has been lost in the US in the past decades,
(03:53):
and many people have felt it right. So, since the
nineteen nineties, we've seen hundreds of communities that have lost service.
And we used to be fleets of hundreds of thirty
seeredter aircraft flying around the US, and a lot of
people you talk to say, we remember that time. It
was much more convenient. And the reason that we stopped
(04:14):
flying those aircraft was not because they didn't fly far enough.
It was because the unit economics did not work when
you put jet engines on small planes flying short routes.
When you bring electric motors to the equation, they're actually
much better at scaling to smaller aircraft. They're much more
fuel efficient in all phases of flights, which means that
they are very very competitive for small planes flying short routes.
(04:37):
So you're kind of changing the equation of how aircraft
can be operated.
Speaker 1 (04:43):
That's super interesting, and maybe just thinking about kind of
the addressable market, if you will. When we think about,
you know, air travel, most of us often think about,
you know, the big planes, long haul flights, and the
contributions of those two overall co two emissions I view,
were to electrify kind of the regional air travel. Do
you have a sense of, you know, what the overall
(05:06):
reduction in you know, aviation associated emissions might be.
Speaker 2 (05:12):
So yeah, I mean so maybe if we step back
a little bit, right, So, first of all, like as
you mentioned, it's about two and a half percent of
global admission aviation. This year passed, it became a trillion
dollar market commercial air travel, and it's also about one
trillion kilograms one gigaton of CO two being admitted. So
(05:35):
for every dollar spent on an airplane ticket, you're emitting
about one kilogram of ZEO two pretty consistently. Now, whilst
you know it's the long haul flights that are emitting
most per flight, it's actually the short halls that are
emitting more most per mile, right because they're they're the
most inefficient. It's actually and it's in the sort of
(05:55):
mid range that you have the most fuel efficiency. About
one third of emissions and two thirds departures are from
routes that are under eight hundred miles. And as the
technology scales, we're not going to be able to use
electrification to across the Atlantic or fly the very long
(06:15):
haul but hybrid electric will certainly play a role in
the short haul market and the narrow body market.
Speaker 1 (06:22):
Very interesting and in a bit I want to get
back to that point that you just made about, you know,
whether we can electrify the long haul flights, but maybe
before we do, curious just to hear a little bit
kind of about your background and the path that herd
Aerospace has taken, you know, from maybe the idea that
(06:44):
you had to where you are right now.
Speaker 2 (06:46):
Yeah, So my background is I have a PhD in
aerospace product development. Back then, I used to work at
at with jet engines, and I was a researcher at MIT,
and in my spare time I started tickering with toy drones.
I was so fascinating that you could be working with
(07:07):
this new technology of electric motors, which it's so simple,
that's the beauty of it. Whereas jet engines are remarkably
complex have hundreds of moving parts, an electric motor really
has one moving part and they scale so actually what
we built when we built our first first electric motors
for our aircraft, they operate with the same principles and
(07:29):
the same design as a consumer drone, which is completely fascinating.
So we started as actually a research project in Sweden
after Norway had announced that they want all their domestic
flights to be electric by twenty forty. They made that
announcement in twenty eighteen, and we saw that there was
(07:50):
no product to meet that demand, and then this became
a company. We got into y Combinator here in California,
so that's where we really started the company, and in
the past six years we've been growing both our team
our investor base. You know, it's been remarkable. You've seen,
you know, some of the world's leading climate investor invest
(08:10):
in this program. You've seen some of the world's leading
airlines not only investing in the program but also making
large orders of these aircraft. But most excitingly, we've seen
people really from all over the world coming in to
join our team and making this mission of reality. So
what kind of started out a kitchen table six years
ago where we now have a full scale aircraft prototype
(08:34):
in a hangar in upstate New York where we're going
to be flying the world's largest electric aircraft in the
first quarter of this year.
Speaker 1 (08:43):
Super exciting and I do want to hear more about
that first flight later this year, but maybe before we
get to that. I think most of our listeners are
probably you know, at least somewhat familiar with electric vehicles,
probably a lot less familiar with electric airplanes. But when
(09:04):
we think about electric vehicles, I think they're typically you know,
three challenges that come to mind for maybe people who
are you know, considering the technology, and those typically revolve
around ideas of range, charging, and the price. Right. I
think we talked a little bit about the range. Curious
to hear how you're solving for you know, charging, and
(09:27):
the price component whether you know these airplanes will be
you know, cost competitive with with.
Speaker 2 (09:33):
Yeah, And I mean that's that's the real beauty of
electrification is that every time electrification is introduced to a
new mode of transportation, it reduces the operating costs. You know, Actually,
if you go into buy it like a Tesla today,
they have a box that you can take which is
like includes everything that you save on gas in the
first five years, and they see a very low price,
(09:56):
right because they know that this is how people actually
motivate buying these aircraft, right or by buying electric cars.
And it's the same for aircraft, only that the utilization
of an aircraft is so much higher than a utilization
of a car. Right a car mostly stands on its
owner's driveway and maybe it's used once a day. Aircraft
(10:18):
are being flown and really like cycling the batteries fully
ten times a day. So the cost of the batteries,
the cost of all these other you know, the systems
are actually being offset by the fact that that you're
not using a jet engine, you're not using jet fuel,
you're not wearing a jet engine. They require a lot
(10:40):
of maintenance because you have electric motors that essentially, as are,
are so robust that they don't need to be replaced
for the entire life of the aircraft. So what you know,
we try to make this aircraft competitive in acquisition price,
but also you know, the real winnings in this are
in these lower operating costs. And if you speak to
you know, cab drive vers, for instance, they will attest
(11:01):
to the fact that, you know, going electric really makes
a difference to the unit economics of any commercial operations.
Speaker 1 (11:08):
Very interesting and when we think about you know, batteries
and what's needed to ultimately electrify an airplane or a car,
obviously battery technology is evolving, you know, pretty quickly I'm
curious to hear, you know, how your planes may or
may not be able to ultimately accommodate new technology as
(11:30):
new technology is developed.
Speaker 2 (11:33):
Yeah, I mean, we're really This has been one of
the most exciting part of this program is that initially
this aircraft will have a range of one hundred and
twenty five miles, but as battery technologies improved, we project
that that number will increase quite substantially, in fact, nonlinearly,
because the part of the battery that we need for
(11:53):
reserves are going to be less. So we see this,
you know, going up to two hundred miles, et cetera
before the end of this, before the end of this
or the middle of the century. So that's really exciting.
We don't really know how and when and how these
technologies are going to work, so we're really being quite
(12:16):
quite deliberate about building a technology that is sort of
future proof and sort of battery technology agnostic.
Speaker 1 (12:23):
Very interesting, and I guess kind of one other, you know,
general question when we think about the potential carbon savings
associated with electrification, A lot of that ultimately depends on
the grid essentially where you're charging those batteries. Is this
something you're looking to control for in terms of maybe
purchasing renewable energy or how do you how do you
(12:44):
account for that element of it.
Speaker 2 (12:46):
So, yeah, and you're right. And every time we speak
to a new airline or engage with you know, in
different different jurisdiction, you know, there's variables that are changing
for every airline. It can be things like pilot wages
for you know, landing fees and obviously the cost of electricity.
We have the same problem with the price of oil, right,
(13:09):
that's the airlines are extremely sensible sensitive to the volatility
the price of oil. What we're offering with electrification is
that we are you know, we give violins the opportunity
to actually generate the electricity locally. So for instance, at
our airport in Sweden where we're based and we have
our hanker, we have one of the largest solar panel
(13:30):
parks in northern Europe. And so we see this happening
over over that that airports want to be a node
in this new renewable energy infratructure and that controlling their
own destiny, right and especially if you look at you know,
the developing world, right we air travel is still only
globally in its infancy. There's about six billion people that
(13:54):
have never been on an aircraft and are looking to
be connected to this infrastructure. We're seeing massive investments in
countries like India, in a place like you know, a
continent like Africa. We have about a forty percent premium
on jet fuel compared to the US and Europe. Right,
so the delta here could be could be quite substantial.
And I really we think, you know, one of our
(14:17):
lead investors is break Through Energy is Bill Gates's foundation.
They really adamant about this belief in the green negative
green premium that if you launch a product that is
green but it's not cost competitive, you might get the
Norways of the world or the you know, the world's
rich countries to adopt it, but you won't get the
middle income countries to adopt this technology. So we're laser
(14:40):
focused on building a product that is you know, has
not just an electric plane, but an overall superior regal plane.
Speaker 1 (14:48):
That's really interesting. I like the idea of the negative
green premium. It's not what I heard before. Super interesting.
So before you alluded to the idea that electrification will
will likely not be the answer for long haul air travel,
can you tell us a little bit more about you know,
why that's the case, and ultimately, if you have a
view on how ultimately we will decarbonize long haul aviation,
(15:12):
then yeah, I mean.
Speaker 2 (15:14):
Jet fuel is incredibly energy dense, So if you wanted to, like,
you know, the energy density of jet fuel is is
something like thirty to forty times that of batteries, and
then electric motors are about three times as sufficient the
jet engines, so you get to maybe to a factor
twelve or something like that, but it's still if you're
(15:36):
going to add about twelve times the weight for a
long haul aircraft, it's going to be very challenging if
you want to use batteries. Now this sort of so
when we design shrophole aircraft with batteries, we have the
sort of same mass fractions of batteries as a long
haul has aircraft has jet fuel. So it's it's kind
(15:57):
of interesting. But the hybrid part is a little bit
what is the sort of design variable that you can
play with, So even if you go long haul, you know,
we've already seen that other systems on board aircraft are
becoming electrified, and even the propulsion system can be made
to be more efficient even if the primary energy source
(16:19):
is jet fuel if you're running with a hybrid now,
and I think there's a lot of a lot of
I think SAFF is the best bet for energy source
if you want to decarbonize long haul. But it's expensive, right,
and that's why we need to figure out ways to
make use less of it.
Speaker 1 (16:41):
Absolutely, it's expensive and also not really available at the scale.
Speaker 2 (16:45):
That's not available at the scale, right.
Speaker 1 (16:47):
Yeah, absolutely, So your company is private at this point.
You mentioned, you know, partnership with Breakthrough Energy, for example.
I'm curious if you could walk us through, you know,
how you raise money and describe any of the kind
of key investors and relationships that you have in addition
to you know, Breakthrough as we mentioned.
Speaker 2 (17:07):
Yeah, I mean we so, first of all, you know,
building an aerospace company from scratch is a very challenging opportunity,
a very challenging thing to do, right. What we've seen
in the past, in the past, you know, decade, like
the playbook has started, start is starting to be written
(17:30):
on this, right, and we've seen companies some in this
ev tall space. We're building electrical vertical takeoff and landing
essentially like helicopters that can fly longer and and do
on electric and everything from supersonic aircraft, et cetera. So
we're seeing that there's the Silicon Valley ecosystem is willing
(17:52):
to invest. I think, you know what, we've seen the
disruption that we've seen in the car industry as obviously
have people looking at the air space industry and recognizing
that there might be the same potential here. We're also
seeing in industry that is suffering I think a little
bit from the lack of competition. So investors are key
(18:14):
in identifying what to move the needle, like is there
a paradigm ship to be had, So we've been following
that standard. You know, we started y Combinator, which is
where a lot of these companies have gotten their starts,
which is the best accelerator in the world. Then you know,
you go through a stage of speaking to climate funds,
getting strategic investors like United Airlines on board, and you're
(18:37):
building building your tent. Obviously also really dependent on grants
and other kind of governmental support. Historically, there's never been
an airline or an airspace OEM that's been successful without
some form of government support. And we've been fortunate enough
to be getting that kind of support both at our
(18:58):
operations in Sweden and now in North America.
Speaker 1 (19:00):
Very interesting. I want to follow up on the government
support idea in the minute, but maybe taking a step back,
you mentioned, of course partnerships with a couple airlines, Air Canada,
United Airlines cheeros to hear more about those partnerships, and
you started to talk about it a little bit earlier,
but ultimately, you know, what is the value proposition for
(19:20):
them at this point?
Speaker 2 (19:22):
So the value proposition I think is two fold. I mean,
so first of all, it's about restoring connectivity. It's about
you know, replacing some of the routes that they are
operating already now that has connectivity, but it's operating at
a at a better under economics. Obviously, United is also
a big leader on sustainability and want to be first,
(19:45):
and I think are being kind of innovative in ways
of using their thought leadership and their brand to to
sort of create momentum for companies that are developing these
new technologies and and But the real winnings for for
a company like United is not only the routes themselves.
(20:06):
It's that these small routes, short routes, they are the
tributaries that are feeding the rivers. Right, So if somebody
gets gets on a plane, like, for instance, if you're
flying from Palm Springs to Aspen, Colorado, right, you jump
on an E S thirty, you'd fly to lax You
(20:28):
take a larger aircraft and fly to Denver, and then
you get on an E S thirty and fly to Aspa. Right.
So what United is able to do then is obviously
to monetize the large route as well and win in
a competitive business, you know, offer a greater value proposition
to their customer than their competitors are doing. So it's
(20:48):
sort of a win win there.
Speaker 1 (20:50):
Very interesting. Yeah, so you mentioned a few moments ago
government support. Obviously this is a topic that's getting a
lot of attention, and here in the US with kind
of a shift in the administration and the administration's feelings
towards all things climate and climate tech. I'm curious to
(21:11):
hear you know more about the support that that you
mentioned that you've gotten, you know, from government, and whether
you think there are ultimately any particular you know, policies
or incentive structures that need to be put in place
to really you know benefit heard aerospace and ultimately, you know,
what what future policy you think what would help the
(21:33):
business the most.
Speaker 2 (21:35):
Yeah, I mean, I think it's too early to say
how what what changes are happening here. We've been fortunate
enough to have support from the the f A, A,
R by E, et cetera, and and right now we
don't really know what's happening to those programs. I think
as a general rule, I think across the aisle politically,
(21:56):
people want to see American leadership and aviation. UH. We're
seeing massive investments happening in China on on hybrid electric
battery development and also just on aviation in general. We
want to make sure that we maintain that leadership, and
we want to make sure that there's a healthy ecosystem
of incumbents and and startups that are you know, challenging
(22:20):
each other to sort of build it, bring a competitive
market and push each other forward. So I remain hopeful
that that's that's the policy that is going to be
be there in the future as well.
Speaker 1 (22:32):
Very interesting and you know, we know, of course, one
factor that's influencing you know, discussion of decarbonization, uh in
air travel is the development of course, which is essentially
you know, the carbon offset requirement for airlines. Do you
see that market ultimately, you know, pushing companies potentially towards
(22:56):
electrification and kind of how do you see that evolving
over time?
Speaker 2 (23:00):
Yeah, for sure. I mean airlines are feeling the pressure.
I mean it's it can be the mandate, it can
be the social pressure. You know, in Sweden we still
have a very lot large flight shaming movement. You see
domestic air travel gone down since Katumbadi and that sort
of movement. So but but it's difficult or it is
(23:22):
different in every jurisdiction in every place. In general, I
think what what I think is a success factor for
for a startup or anybody that's trying to transform and
you know, bring new technology and is adaptability. It's about
(23:44):
it's I mean Darwin said, you know, it's not the
most strongest species that survive, we're the ones that are
most intelligence, is the ones that are most adaptable to change.
So how I'm really thinking about this as an entrepreneur
is there is always uncertain There is always uncertainty about
what programs are going to be there, how high up
(24:05):
of the agenda, climate is going to be, you know,
where we're going to be seeing these drivers, is it
going to be you know, we've you know, only in
these six years you've seen you know, the pendulum swinging
back or firth between Europe and the US IRA you
know all of these things, right, you see companies come
and go, So all of that you have to kind
(24:26):
of take a step back and be like, how do
I play this kind of almost as a as you know,
some sort of portfolio management. You're like, risk is the
currency of innovation, and you have to like be able
to wake up every morning and say, hey, the chess
piece has moved overnight. Here, what's my you know, what's
(24:47):
my comeback on this?
Speaker 1 (24:48):
That's super interesting And again I like the idea of
risking the currency of innovation. So maybe just as a
final question, of course, you mentioned, you know, the upcoming
flight later this year in upstate New York. I was
wondering if you could tell us a little bit about
more about that, what that means for hard Aerospace, and
ultimately what your goals are for the company, maybe looking
(25:11):
out to twenty thirty fifty.
Speaker 2 (25:14):
Yeah, So the aircraft we're going to be flying out
of Plattsburgh, New York, we've built from the ground up
with the very small team. It's an all carbon fiber
composite aircraft and it's the by far the largest electric
aircraft that has flown. So it's about one hundred and
six foot wingspan, it's it's about ten tons, and the
(25:38):
final aircraft is going to weigh about twice that. And yeah,
it's going to be demonstrating to the world for the
first time that at thirties eater, that's a lot, you know,
that's quite a large number that is possible with electric.
Hopefully the flight itself will be undramatic. Right, we're testing
(25:59):
everything extensively on the ground. We're doing you know, wing
loading testing, we're doing systems testing, e am I testing
all of these things to have a very very smooth,
smooth light where we're just gonna you know, take off
and land. And the way you guarantee safety as well
is that you you do the airfield in Plattsburgh has
(26:19):
a very long runway, so you could actually kind of
first you start with low speed taxing, then you start
with go into high speed taxing, then you do a
little jump on the runway, so yes, take off and
you know, go just a few feet above the ground
and then land again. But and you get a very
good sense of you know, the robustness of your propulsioning system,
(26:40):
the controllability of your aircraft, et cetera. From that, whilst
not being at any you know, was minimizing the danger.
Speaker 1 (26:48):
Super interesting and then maybe looking ahead to twenty thirty
twenty fifty, where do you see hard aerospace but or
some goals.
Speaker 2 (26:56):
Yes, So what we've been working quite hard at is
to marry a sort of that sort of New Silicon
Valley ethos of doing an iterative product development with working
in a very regulated industry. So how we're doing this
is if we're dividing our development in two phases. The
first is when we fly experimentally like we're doing now.
(27:18):
So we call this aircraft X one. It's an excer
first exper mental demonstrator. We go into the X two,
which is our second extremntal demonstrator, but it's also our
pre production prototype. It's flying on an experimental permit, but
it's with the components and the technology that will that
will be very reflective of what's going to be on
our first conforming aircraft, and we're going to be flying
(27:38):
that before the end of next year. We're actually even
like we're starting to build our first part for that
already now, and then on that we go into the
certification program where we're actually flying type conforming aircraft to
cost a period of about three years, and we're looking
to have the type certification by twenty twenty nine and
(28:01):
enter into service shortly thereafter.
Speaker 1 (28:03):
Well, super exciting.
Speaker 2 (28:06):
Yes, it is very exciting, and it's a novel way
of looking at product development, and that's really my passion.
It's about about building, you know, learning, iterating, and making
things better. I think it's the way aerospace has been
done traditionally. It's been very incremental approaches from new designs
(28:28):
and you try to get everything perfect on the first try.
When you're bringing this large degree of innovation a brand
new propulsion system, you have to work in a more
iterative way. And I think we've seen the space industry
has led the way a lot, and how to work
in that in that.
Speaker 1 (28:44):
Framework very very interesting. Well, Andrews, thank you so much
for taking the time to chat. We certainly wish you
in the company the best of luck with that upcoming flight.
Speaker 2 (28:54):
Thank you so much. It's been my pleasure to come
in here and talk about this. It's obviously a very
exciting program, wonderful.
Speaker 1 (29:00):
Thank you so much so As always, you can find
more information on all things ESG, including decarbonization of air
travel by going to our dashboard bispace ESG go on
the Bloomberg terminal and if you have an ESG quandary
or burning question you would like to ask bi's expert analysts,
please send us an email at ESG Currents at Bloomberg
(29:22):
dot net. Thank you very much and we'll see you
next time.
Host
Eric Kane
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