Lotte joins Korea’s UAM race as Hyundai closes ranks with others

South Korean conglomerate Lotte said on Tuesday it is joining hands with three other partners to enter the country’s urban air mobility (UAM) business to gain a foothold in the fast-growing future mobility market.

On the same day, Hyundai Motor Co. signed a business cooperation agreement with its four partners to make joint efforts to move forward Korea’s vision to commercialize UAM by 2025.

Lotte Corp., the holding company of retail giant Lotte Group, said it will closely work with the Incheon city government, Skyworks Aeronautics Corp., MOBIUS.energy Corp. and Mint Air Inc. to build an advanced air mobility service in Korea.

Under the agreement, Skyworks Aeronautics, a US aeronautics research and development company, will be in charge of aircraft development, while MOBIUS.energy, a US startup, will develop battery modules.

Mint Air, a Korean charter plane operator, will be responsible for the aircraft operation.

Lotte Rental Co., the car leasing unit of the group, will run a mobility platform connecting aviation with ground services as well as establish infrastructure such as vertiports and charging stations.

Lotte Group said the goal is to operate a UAM service between Incheon International Airport and Jamsil, a neighborhood of Seoul's southeastern district of Songpa where Lotte runs a major recreation complex, by 2024.

HYUNDAI-LED UAM AVENGERS

Meanwhile, Hyundai Motor said on Tuesday it has signed a UAM agreement with Incheon International Airport Corp., Hyundai Engineering & Construction Co., KT Corp. and Korean Air Lines Co.

Under the deal, Hyundai Motor will be in charge of a UAM business, including the production, sales, operation and maintenance of UAM aircraft, while Hyundai E&C will build vertical take-off and landing facilities.

While KT will establish a UAM communication infrastructure, Korean Air (KAL) will handle the operation and control of UAM services.

The companies are members of UAM Team Korea, a government-private consultative body launched in June last year to commercialize drone taxis by 2025.

“We call the five companies UAM avengers tasked with a mission to launch a new era in Korea for future mobility,” said Hyundai Motor President Shin Jai-won, who is in charge of its UAM business.

Last week, the automaker said it is accelerating its UAM business in the US, officially naming its US office Supernal LLC.

Supernal, headquartered in Washington D.C., plans not only to develop air vehicles but also to provide a transportation system that combines UAM with existing traffic networks.

Hyundai aims to bring its UAM vehicles to the market by 2028 at the latest, as the group is shifting its business focus toward UAM and other future mobility solutions.

Hyundai Motor Chairman Chung Euisun, who took the group’s leadership in October of last year, has said that the automaker will shift its business portfolio breakdown so that automobiles account for just half of its sales, followed by UAM with 30% and robotics at 20%.

During the 2020 US Consumer Electric Show, Hyundai unveiled its urban air mobility initiative, as well as showcasing its S-A1 air vehicle concept equipped with an electric vertical take-off and landing (eVTOL) system.

Hyundai plans to invest $1.5 billion in UAM over the next five years to cultivate new business opportunities in future mobility.

HANWHA, ANOTHER UAM PLAYER

Hanwha Group is also aggressive with its urban air mobility business.

In an effort to expand its UAM business, Hanwha purchased a 30% stake in US air taxi startup Overair for $25 million in January 2020.

In partnership with Overair, Hanwha Systems Co. is developing Butterfly, a personal air vehicle.

Hanwha Systems said in August it is also acquiring $30 million in convertible bonds issued by Overair to tighten its UAM partnership.

Write to Il-Gue Kim and Dong-Hui Park at Black0419@hankyung.com
In-Soo Nam edited this article.