United Parcel Service plans to buy electric Vertical Takeoff and Landing (eVTOL) aircraft from Beta Technologies (BETA) to supplement its air service in select small and mid-size markets.
eVTOLs are a hybrid of a helicopter and a fixed-wing aircraft, allowing them to fly at higher speeds and ascend and descend vertically. They will take off and land on UPS property in a whisper-quiet manner, minimizing time in transit, vehicle pollution, and operating costs.
The eVTOLs will be controlled by UPS's Flight Forward division, which is also pursuing drone delivery.
The hybrid aircraft "unlocks new business models that don't exist today," Bala Ganesh, vice president of the UPS Advanced Technology Group, told CNBC. "For example, you can see a future where it's carrying, let's say 1,000 pounds, 1,500 pounds to rural hospitals," and landing on a helipad instead of an airport.
The BETA aircraft's 1,400-pound cargo capacity is suitable for transporting time-sensitive deliveries that would otherwise be flown on small fixed-wing aircraft more efficiently and sustainably. UPS's use of the aircraft would benefit healthcare facilities, thousands of small and medium-sized businesses, and other businesses in rural areas.
Since Carol Tome took over as CEO of UPS in June 2020, sustainability has become increasingly important for the company. UPS stated in its 2020 annual report that its aim is to minimize greenhouse gas emissions from its ground business by 12% and to derive 25% of its electric needs from renewable sources by 2025.
UPS announced in 2020 a plan to purchase up to 10,000 electric vehicles from Arrival Group, which is headquartered in London and Charlotte, North Carolina. The eVTOL batteries will also be compatible with those vehicles. And after the batteries' first life cycle in the aircraft, they can still be used in EVs.
UPS expects to receive the planes in 2024. An option to purchase up to 150 aircraft stands.