A major dispute has opened up between European and US regulators over the standards to be used for certifying the airworthiness of unmanned aerial passenger vehicles – popularly known as “air taxis” or “flying cars.”  The dispute has existed under the radar for years but has only recently come to the fore as a growing number of drone taxis companies on both sides of the Atlantic prepare for advanced testing of their various prototypes.  The dispute could well threaten the  full commercialization of the air taxi sector, which, at its current pace, could reach an estimated value of $1.5 trillion by the year 2035.

On one side of the dispute is the European Aviation Safety Agency (EASA), which observes a traditional safety standard known as “10 to the minus 9,” which is shorthand for a predicted air vehicle crash or collision rate of 1 incident per billion flights.  That standard has been applied to conventional commercial aircraft for decades, and European regulators, though anxious to see flight tested non-passenger drones proliferate for commercial purposes, see no reason to alter their time-honored passenger vehicle standard to accommodate air taxis which are still in early development.

But the Federal Aviation Administration (FAA), which is at the forefront of pushing air taxi development in the United States, disagrees.  The FAA is prepared to support a less strict standard, 10-8 or even 10-7, which allows for slightly greater risk – traditionally applied to small aircraft and helicopters – to accommodate the continued growth of the industry.  The FAA has been working closely with NASA and other federal agencies to closely review the development of a number of the leading air taxi prototypes, including, most recently, ones produced by two Silicon Valley based startups, Joby Aero and Archer Aviation.  The FAA just issued Special Airworthiness Certificates to both companies which will allow them to conduct advanced flight testing in real-world – though still experimental — settings. It’s a major step forward.

Of course, there are  more than merely safety issues at stake here.  Slowing down certification of companies like Joby and Archer to fly in Europe will allow European companies that are slightly behind in their own development to catch-up and to prevent US companies from gaining an early foothold on European soil.  Only one company, Germany-based Lilium, has managed to secure dual certification status, winning approval from both the EASA and the FAA, just weeks before Archer and Joby received FAA approval.  The competition among air taxis startups – about a dozen, including Llilium’s German rival Volocopter and China-based EHang, among others –  is growing fierce.  Major investors are standing by and are anxious to know which companies, if any, will likely win approval to move forward, before committing themselves to new funding rounds.

Lilium, with its recently-acquired FAA support, could now be poised to enter the US market, while Archer and Joby, are unlikely to gain a European foothold, which could give Lilium a leg up moving forward. At some point, the FAA and EASA will need to reach an accommodation of some sort, or the current dispute could develop into a real fissure, with the FAA possibly blocking future certifications by Volocopter and other Joby and Archer rivals.

For now the dispute is still just simmering, in part because no company, even in Europe, is all that close to full commercialization.  No company has the final approval that it will need to begin mass producing air taxis anytime soon – but some are getting close.  Volocopter, with its own recent certification by EASA, is moving to expand its small production plant in Germany in the hopes of  beginning production as early as next year.  Lilium will likely do the same shortly.  It’s not yet an inter-continental trade war, but watch out – one could soon be looming on the horizon.