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Exclusive: GM explores the market for electric ‘flying cars’ sources

DETROIT (Reuters) – General Motors Co. GM.N examines the possibilities in the taxi services market, including whether to build vehicles that are at least called “flying cars”, as part of a push from the US automaker to look for growth in related transportation markets, said two people familiar with the matter .

On Monday, CEO Mary Barra briefly made her first reference to Detroit-based GM’s interest in the air taxi market, saying it fit with the development of electric vehicles (EVs) and its ultium advanced electric battery.

“We strongly believe in our EV future and not just for vehicles,”

; she told an RBC conference. “The power and flexibility of our Ultium battery system opens doors” for many applications, she added, “including air mobility.”

Air taxis are vertical take-off and landing craft (VTOL) that use electric motors instead of jet engines. They are designed to avoid the need for long runways and have rotating blades and in some cases rotors instead of propellers.

Electric air taxis are likely to fly low-level routes and relieve traffic jams on roads. But they could increase air traffic congestion as they became more popular.

GM spokesman Stuart Fowle declined to elaborate. “It’s an area we’re very excited about and looking at.”

GM shares rose as much as 5.4% and still rose 1.4% in afternoon trading.

Corporate and private investors have poured at least $ 2.3 billion into more than 100 startups from aircraft, including drones and electric air taxis, but the technology still faces significant roadblocks to commercialization and profitability, according to investor website PitchBook.

GM weighs every opportunity – whether you build, deliver or collaborate – as it decides whether to join car manufacturers such as Hyundai Motor Co005380.KS, Toyota Motor Corp.7203.T, Daimler AG DAIGn.DE, Volkswagen AGVOWG_p.DE and Geely Automobile 0175.HK in the ever-growing market, said the sources, who asked not to be identified. GM could release a statement early next year.

“I’m not surprised that GM and others are looking at this,” said investor and business adviser Evangelos Simoudis, CEO of Synapse Partners. He noted that companies like Amazon.com and Walmart are pushing to use parcel drones, but said it takes much longer to develop as a business to transport people by flying cars.

GM’s study of the air mobility market is part of GM’s innovation group’s push to explore other transport markets for growth, one source said. The group is led by Alan Wexler, who reports to Barra and was hired in July in the newly created position of senior vice president of innovation and growth.

Other efforts stemming from the innovation group include the formation of a defense unit and a $ 214 million contract to build troop carriers for the U.S. Army based on Chevrolet Colorado pickup, as well as a new mobile app for OnStar members.

Hyundai merged with Uber Technologies Inc. UBER.N in January to develop electric air taxis and has promised to invest $ 1.5 billion in urban mobility by 2025.

Toyota led an investment round of $ 590 million in the launch of air taxi Joby in January, while Daimler and Geely have invested in Stuttgart-based Volocopter. Volkswagen’s Porsche brand works with BoeingPROHIBIT to develop a concept electric flying vehicle.

Last year, TeslaTSLA.O CEO Elon Musk called electrical supersonic VTOL a “hard problem” and said last month that a more powerful battery that could enable electric planes was three to four years away. Musk has said “many exciting things” will be unveiled during Tesla’s battery day on September 22.

Separately Tuesday, the World Economic Forum and the city of Los Angeles released a set of principles in support of the rollout of urban air mobility in U.S. cities, and a spokeswoman for the organization said it is talks with other cities to adopt the same roadmap.

Additional reporting by Paul Lienert in Detroit; Editing by Chizu Nomiyama and David Gregorio

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