Are we finally getting flying cars? One Bay Area startup is already selling them. Also, there’s an EV leasing loophole that can solve your car shopping headaches.
Flying to work? The fantasy of a flying car just got real
Few things signify mid-20th-century America’s optimism and early-21st-century disappointment than a flying car.
In 2017, there was even an “I bet there will be flying cars in the future” viral meme that contrasted idealized images with a cartoon of George Jetson commuting to work through the air with the latest technological failure.
But hope springs eternal, and for the first time in history, the Federal Aviation Administration has permitted a flying car. (1) And it’s electric.
Image credit to Alef Aeronautics
From a distance, Alef Aeronautics Model A looks like a futuristic sedan with a sleek chassis and an enclosed plastic cockpit that can seat two people. As you get closer, it becomes apparent that the Model A is not just a sedan. The top surface of the car is nothing more than an elaborate grate that allows air to flow through it, and the area that would normally house the engine, drive train, and trunk are mostly air turbines and empty spaces.
The fact that the Model A looks similar to a normal car is not a coincidence. Part of the design goal was for the vehicle to work within the constraints of our current infrastructure. It will occupy a standard parking space, take a charge using standard car chargers and, most importantly, take off vertically.
A vertical takeoff—think of the kind of flying drones used by photographers—allows the vehicle to operate without a landing strip or airport and would enable the vehicle to fly within a city.
Once the eight rotors lift the Model A into the air, The body of the vehicle pivots around the cockpit. While the driver/pilot and passenger stay upright, the car turns on its side, so that what was the left side of the car is now the upper wing of a twenty-first-century biplane, and the right side is the bottom wing. The rotors, previously pointed toward the ground, now propel the vehicle forward while the shape of the wings provides lift, just like a conventional plane.
On the ground, the vehicle is expected to have a range of 200 miles with the air range coming in at half that.
Image credit to Alef Aeronautics
Another goal of the design team was to make the Model A affordable, and the announced list price is $300,000. Although that’s certainly on the high end for a car, it’s on the lower end of costs for a plane. Alef is currently taking preorders for model A. You can get in line for $150, or bump to priority for $1,500. After scaling up, the company plans to roll out a new design, the Model Z, for $30,000 by 2035.
A prototype of the vehicle was unveiled in October of last year. Although the FAA has approved a special airworthiness permit for testing, the company has yet to attempt a manned flight.
EV tax credit loophole makes leasing a good option for many vehicles
For anyone considering switching to electric vehicles (EVs), the EV tax credit included in 2022’s Inflation Reduction Act is a big deal. And as more car manufacturers introduce affordable models, EVs are quickly becoming practical choices for middle-class families.
But when the Internal Revenue Service (IRS) issued the list of cars eligible for the full $7500 credit, many potential buyers were disappointed to see less than twenty models were qualified.
Even as manufacturers and potential buyers grouse about the restrictions, another clause in the same law offers an opportunity for many. It turns out there’s a way around that list altogether–leasing. Although the IRA was intended to promote U.S. manufacturing, it also aimed to reduce the number of miles driven using internal combustion engines. And because commercial fleets, like delivery and service vehicles, drive a lot more miles than private vehicles, the IRA included a. provision that allows vehicles in that category to get that tax credit regardless of where it is manufactured.
But according to the IRS, the cars that auto companies lease to consumers also qualify as commercial. The manufacturers, or their leasing subsidiaries, are in line for that credit.
Some manufacturers are including that incentive in the price and are advertising up to $7,500 off the leasing price. That could pencil out to about $222 a month for a 36-month lease.
And the EV loophole is getting a lot of traction. In April of 2022, 13% of EVs driven off the lot were leased. In April 2023, that number had nearly tripled to 37%.(1) Hyundai in particular is using the incentive to drive leases. The Hyundai went from leasing 2% of their Ioniq 5 model at the beginning of the year to 30% by April.
Oftentimes, a leasing agreement includes the option to purchase the vehicle at the end of the program for residual value, so some buyers might still find a way to own a disqualified car with the incentive built into the price.
Sen Joe Manchin, who was instrumental in passing the legislation, already introduced legislation to close the loophole in January, and it seems likely that he’ll keep pushing to make that happen.