Flying Car Dream Dashed Again
After more than 15 years in development and less than four weeks after receiving its airworthiness certificate from the FAA, most of the U.S. employees of flying carmaker Terrafugia have been laid off, and the company will end U.S. operations later this year.
Between 80 and 100 employees at the company’s headquarters in Woburn, Mass., have been let go, and Terrafugia’s intellectual property and further development of the Transition, a light sport airplane designed to be drivable on roads, are being moved to China by owner Zhejiang Geely Holding Group, which bought the company in 2017.
Terrafugia General Manager Kevin Colburn declined to confirm or deny that there have been layoffs, saying in an email, “Terrafugia does not comment on business operations.”
The company was founded in 2006 by a group of Massachusetts Institute of Technology graduates whose business plan to develop an airplane with folding wings that could be driven on roads was the runner-up for the 2006 MIT $100K Entrepreneurship Competition. CEO and founder Carl Dietrich, who departed Terrafugia in 2019, provided initial funding from an MIT student prize. Terrafugia raised $1.5 million in private equity financing in 2008 and more than $5.5 million in subsequent rounds through 2012.
The Transition production prototype completed its first flight March 23, 2012, and the company received about 100 reservations for the flying car.
Colburn said last month that Terrafugia planned to attain U.S. Department of Transportation/NHTSA roadworthiness certification for the Transition by 2022 followed by U.S. sales of the flying car, but the Transition would need extensive crash testing, including side, quartering and rear impact tests.
He said the Transition completed one head-on crash test, but its design would likely have to evolve significantly to meet DOT safety and environmental regulations. The time and capital needed to accomplish a redesign and meet regulatory hurdles would surely have challenged the company’s plans to launch sales in 2022.
With a sales price estimated to be between $350,000 and $400,000, the aircraft may have been too expensive with very limited utility to find any significant sales in the United States.