From the Runway to the Road: Terrafugia Redefines the Flying Car—Make That Drivable Airplane

Don’t call it a flying car. It’s a “roadable aircraft.”

It’s named the Transition, and the first full-scale model is taking shape inside a former machine shop on an industrial back alley in Woburn, MA. Between now and late July, the 10 employees of angel-funded startup Terrafugia will be spending “a lot of long days, nights, and weekends” in that shop, says CEO and founder Carl Dietrich. That’s because they want to show off their concept vehicle at AirVenture—the world’s largest aviation festival, held annually in Oshkosh, WI—and there’s a lot of work to finish first.

When I visited Terrafugia yesterday, technicians were shaping the grooves in the fuselage’s carbon-fiber skin that will hold the straps for the vehicle’s rocket-fired emergency parachute. They hadn’t yet attached the folding wings to the fuselage or the fuselage to the empanage (which will hold up the dual tails), and they had yet to figure out where to put the engine’s exhaust system. “It’s crunch time,” says Dietrich.

And the work won’t end after Oshkosh. Terrafugia wants to deliver the first Transition to a customer by the end of 2009 and go into large-scale production by 2012. If you were just building a new type of plane or a new type of car, that schedule would be ambitious enough. But the Transition is both—and if, as the company intends, pilots are to land the vehicle on an airport runway, fold up the wings, and tool right out onto public highways, then this hybrid-of-a-different-color will have to meet federal standards for both aviation safety and highway safety.

Which means going through the demanding certification processes set up by the Federal Aviation Administration and the National Highway Traffic Safety Administration. Then there are problems like building fail-safe folding wings that can be verifiably locked into flying position; making the vehicle light enough not only to fly, but to qualify as a Special Light-Sport Aircraft (of which more below); working with insurance companies to create a new kind of policy combining the accident insurance required for automobiles with the hull and liability insurance required for airplanes; and finding new investors with the stomach for the kinds of risks Terrafugia is taking.

In other words, there are a thousand practical obstacles to achieving the flying-car dreams Deitrich says he’s had since he decided to become an aerospace engineer at the age of 8—-to say nothing of actually making a bit of money along the way. “The old joke is that the best way to make a small fortune in aviation is to start with a large one,” says Dietrich. But while he admits that building a plane that you can also drive “sounds off the wall,” he says “there is a real business case for investing in its success. I’m personally invested, as are a lot of the people here. I don’t see any way we’re not going to get this done.”

Terrafugia CEO Carl DietrichThere’s plenty of reason to take Dietrich seriously. The 30-year-old earned his bachelor’s, master’s, and doctoral degrees in aeronautics and astronautics from MIT, and was awarded the $30,000 Lemelson-MIT Student Prize in 2006 in recognition of his groundbreaking designs, including a desktop-sized fusion reactor, a pumpless rocket engine, and a blast-safe pick for removing land mines. Dietrich put the prize money into Terrafugia, which he co-founded with fellow MIT aero-astro grads Samuel Schweighart and Anna Mracek (now his wife) and two former MBA students from MIT’s Sloan School. Their plan to manufacture a road-ready airplane was the runner-up in the business venture category of the 2006 MIT $100K Entrepreneurship Competition—winning the company a $10,000 check that still hangs on the wall of Terrafugia’s “prototype development facility,” a modest space formerly used to manufacture garage doors.

But prizes alone don’t guarantee success. Nor do cool prototypes (though Terrafugia started generating orders as soon as it showed its first folding wing model at Oshkosh in 2006). To succeed as a business, you need a real market. And the key to Terrafugia’s entire business plan was a change in FAA rules in 2004 that created a new category of general-aviation planes called special light-sport aircraft (S-LSA) and a new type of pilot’s license called a sport pilot certificate.

In a nutshell, if a company can manufacture a plane that weighs less than 1,320 pounds, carries no more than two people, and flies no faster than 138 miles per hour, it can get the craft qualified as an S-LSA, meaning that owners need only a sport pilot certificate to fly it. Getting a sport pilot certificate involves only about half as much flight training as qualifying for private pilot certificate, the license previously required for most general aviation flyers.

The rule change “created a whole new way of getting a vehicle to market,” Dietrich says. “There’s more innovation and activity now than we’ve seen in aviation since the 1930s.” More than 70 new types of aircraft have hit the market since 2004, mostly two-seaters like the Transition. But none of them, so far, are also designed to be driven on roadways.

Moulton Taylor’s Aerocar IIFlying cars have been the obsession of many a pilot over the decades; indeed, one aeronautical engineer, a World War II Navy missile designer named Moulton Taylor, built a series of certified roadable planes called Aerocars between 1949 and 1968, and came close to winning a mass-manufacturing deal with Ford. But the idea has never really taken off. (No apologies for that pun—every flying-car story needs at least one.)

What convinced the Terrafugia co-founders that it was time to try again, says Dietrich, was a 2002 survey by MIT aero-astro professor John Hansman, who identified four key barriers supposedly keeping people from using small planes as a practical way to get around the country. The first and (so far) least changeable barrier was weather—it’s simply no fun to fly a small plane in choppy conditions.

The second barrier was the high cost of private planes. An entry-level single-engine plane like the Cessna Skyhawk costs upwards of $230,000. Add gas, maintenance, and hangar fees, and it’s easy to see why general aviation is mainly a rich man’s pastime.

The third barrier was the fact that only about one third of the nation’s small, general-aviation airports have rental-car facilities or cab stands—meaning that once you fly in, you’re stuck. Fourth and last was the long door-to-door travel time: If you’re trying to get to a business meeting, you probably don’t want to spend 45 minutes filing a flight plan, rolling your plane out of its hangar, warming up the engine, and doing the mandatory pre-flight inspection—not to mention another 30 to 45 minutes at the destination airport tying down the plane and calling a cab.

The nifty thing about the Transition, of course, is that it’s designed to change from a plane into an automobile in about thirty seconds—meaning pilots will be able to drive right off the tarmac and onto the roadway without even having to get out. (The half-hour process of manually refitting the Aerocar for roadway driving was part of what killed Moulton Taylor’s dream, according to Dietrich.) At the flip of a switch, the Transition’s wings will fold up and the license plates will rotate into view. The vehicle’s engine, manufactured by Rotax, has a continuously variable transmission and a dual shaft that can power either the rear propeller during flight or a pair of front wheels on the road (top speed: 80 miles per hour).

Terrafugia (the name comes from the Latin terra, for Earth, and fugere, for “escape”) isn’t marketing the Transition to drivers as a replacement for their automobiles—which is part of the reason the company doesn’t like to call the product a flying car. Rather, the vehicle is for pilots who want to be more mobile once they land. “If you want to go skiing in Maine, you can just throw your skis in the back, fly up Saturday morning, drive to the resort, and be on the slopes by the afternoon,” says Dietrich. And if there happens to be a blizzard on Sunday, you won’t be stranded at the Bangor airport: you can just drive home under the storm.

But the company still has quite a few checklists to complete in order to get the Transition on the road—or into the air. After the team takes the proof-of-concept vehicle to Oshkosh, they have to make it airworthy.* Dietrich says they’re shooting for a maiden flight by the end of this year. Then the company will have to prove to federal officials that the vehicle’s carbon-composite safety cage, bumpers, crumple zones, and airbags will actually protect passengers if they get into a run-in with an SUV.

And ultimately, the Transition represents a new category of vehicle—so there will be an inevitable negotiation over which safety regulations and standards Terrafugia really has to meet. There’s a question, for example, over whether NHTSA will make Terrafugia add external side mirrors to the vehicle for visibility (Dietrich says they’d be un-aerodynamic) or whether the internal mirrors, video cameras, and LCD screens the company is building into the cockpit will do the trick.

The Terrafugia Transition folds its wings…But despite the uncertainties, some 40 customers have already ponied up the refundable $7,400 deposit for the Transition, taking up all of Terrafugia’s planned manufacturing capacity through 2011. The final price for the vehicle hasn’t been determined, but it probably won’t be below $150,000, Dietrich says. That’s obviously expensive compared to most cars—even the famed electric sports car, the Tesla Roadster, costs only $109,000—but it won’t set you back nearly as much as a basic Piper Arrow (list price: $323,850).

Terrafugia closed its first investment round in December 2006 and has raised about $1.2 million to date, according to Dietrich. “We’re probably going to be looking to raise another $1 million to $2 million in the not-too-distant future,” he says. Fundraising, not surprisingly, has been a challenge. “The first reaction every time is, ‘You want me to invest in what? A flying car?'” says Dietrich. But he hopes that problem will ease as more of the hardware comes together and the company has something more substantial than computer animations to show prospective investors.

“This has become an industry where you can go from a prototype to delivery in nine months,” he says. “That makes it investable, in the same way that you might invest in a group of engineers who want to bring a new software product to market. And when you list all the ways we could make this work—by partnering with or even selling to a larger airframe manufacturer, for example—you start to overcome people’s disbelief.”

The idea of a flying car that could lift drivers out of traffic jams will probably remain a standing joke—a monument to an antique brand of technological enthusiasm. But a drivable airplane is a different proposition. And it’s probably safe to say that Terrafugia has assembled more brainpower, and more MIT degrees, around that proposition than any previous organization. “I think this is a fantastic opportunity—not just from a business perspective and a career perspective, but to work on something where we could make history,” says Dietrich. “I wouldn’t want to be doing anything else.”

*CORRECTION 5/8/08 9:55 a.m.: The first version of this story said that the proof-of-concept model of the Transition that Terrafugia is assembling now won’t be airworthy, and that a second version would complete the maiden flight. That was incorrect—Dietrich says the proof-of-concept version will be flyable.

Wade Roush is a contributing editor at Xconomy. Follow @wroush

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