ZeroAvia Stock and IPO: What’s in Store for Hydrogen Airplanes?

Aviation is one of the hardest sectors to decarbonize. ZeroAvia is attempting to bring clean energy to the skies by developing hydrogen-powered airplanes. Read on to learn how the company is doing it and if the stock is investable.

David Dierking   Updated June 5th, 2022

Credit: ZeroAvia

The aviation industry is struggling to reduce greenhouse gas emissions from fossil-fuel-powered airplanes. In fact, CO2 emissions from aviation represent roughly 2-3% of global emissions. Could hydrogen-powered planes be the solution?

What does ZeroAvia do?

Hydrogen is attractive because burning it as fuel generates no emissions; it’s also energy-dense.

ZeroAvia develops hydrogen fuel cells for commercial aircraft. It aims to create a zero-emission alternative to traditional plane engines. If successful, its fuel cell technology could support large commercial aircraft for distances of up to 5,000 miles.

Founded in 2018 by Valery Miftakhov, who serves as the CEO, ZeroAvia successfully completed its first test flight in 2019. The test used a six-seat plane powered by a combination of hydrogen and an electric battery. In 2020, the company completed the first-ever test flight powered by hydrogen alone, flying for eight minutes at a maximum altitude of 1000 feet. Earlier in May, the company announced plans to test its fuel cells on 19-seat planes.

Hydrogen is an often-cited clean energy option for aviation, maybe more so than batteries. While electric batteries can power cars over reasonable distances, they are too large, heavy, and unwieldy to power commercial airliners over long distances. Hydrogen fuel cells are also limited by their weight, but the hope is that they get lighter with time.

However, the timeframe for getting hydrogen to commercial airline viability is long, especially for longer-range and larger aircraft. Sustainable aviation fuels may be an alternative to hydrogen in the short term, though biofuels are not without environmental impact.

ZeroAvia isn’t planning on making its first commercial offering available for two years, and flights with 100+ seat capacity may not arrive for nearly a decade. Since the company doesn’t plan on generating significant revenue until then, it will likely need to raise additional capital soon.

Will hydrogen planes actually take off?

Hydrogen could be the solution for environmentally sustainable long-distance flights. Even companies like Airbus are now getting into the game. However, the technology is years, if not decades, away. The biggest challenge might be the weight of the fuel cells, considered too heavy at present.

One issue is the specialized tanks needed to store the liquid hydrogen at ultra-low temperatures. The size, weight, and material would require storing fuel in the fuselage, not the wings. As a result, hydrogen-fueled planes would be fatter and create more drag. Engine designers, such as ZeroAvia, and airplane manufacturers need to design a whole new airplane to support hydrogen fuel cell technology.

The cost of green hydrogen is another challenge. Most hydrogen produced today uses fossil fuels, while green hydrogen, produced using renewables, remains prohibitively expensive. However, experts believe that costs could drop materially over the coming decade.

Is ZeroAvia publicly traded?  When will ZeroAvia IPO?

ZeroAvia does not have publicly traded shares. Nor has it announced any intentions to IPO, but the company needs to keep raising money to fund its business. So far it has been raising money from private investors.

By the end of 2021, ZeroAvia raised $110 million over seven funding rounds. The latest round was completed in December 2021 and raised $35 million. Some of the largest investors included British Airways, Alaska Air Group and United Airlines. Other notable investors include the Amazon Climate Pledge Fund and Bill Gates’s Breakthrough Energy Ventures.

Given that ZeroAvia needs funding, they may try to IPO eventually, but it is still early and the markets are not currently favoring pre-revenue startups.

Can you buy ZeroAvia stock?

ZeroAvia stock is not traded on the public markets, but it may be available on pre-IPO platforms like EquityZen. Investing through these platforms means that you are buying shares from company insiders or early investors. However, to participate, you must qualify as an accredited investor.

To be an accredited investor, you generally need to:

  • Earn $200,000 a year for two years and expect the same this year ($300,000 if filing jointly)
  • Have a net worth in excess of $1,000,000, excluding your main home

Investing in pre-IPO companies comes with extra risks. Disclosed information is limited compared to what’s available for publicly traded stocks. You may not be able to resell your investment. And you may be buying shares from someone who has more knowledge of the company than you.

Publicly traded alternatives to ZeroAvia

ZeroAvia has a unique business model. Finding comparables, especially among publicly-traded companies, is challenging. One sector to explore is the electric vertical take-off and landing vehicle (EVTOL) industry. Here are some options.

  • Vertical Aerospace (EVTL). Based in the United Kingdom and founded in 2016, Vertical Aerospace builds zero-emission short-distance eVTOL aircraft. Its cornerstone is the VX4 electric quadcopter. The company aims to have its first vehicles sold and delivered by 2024, with a full-scale commercial ramp-up in 2026.
  • Joby Aviation (JOBY). Joby has been around since 2009 and wants to become the premier aerial ride-sharing service. Think Uber but using personal aircraft. Commercial operations are due to launch in 2024.
  • Lilium (LILM). Founded in 2015, Lilium is making eVTOL aircraft that can be configured for personal use, seating up to 6 passengers, or for commercial use, transporting cargo. It doesn’t plan on selling its first jet until 2025, with wider-scale production sometime in 2027.

🔔 Looking for more options? Learn about investing in eVTOL companies.

ZeroAvia has a long road ahead to reach commercial viability, but that’s the case with every “green” aerospace company. Clean energy aviation is a buzzworthy industry, but most companies are years away from generating revenues or profits. This is a high-risk, high-reward opportunity that could take years to pay off.

Author: David Dierking, CFA

David Dierking has been writing about investment strategies using ETFs and mutual funds since 2007. He has extensively contributed to The Street, Investopedia, Seeking Alpha,, ETF Trends, and ETF Daily News. David received his BA in finance from Michigan State University. He has also been a CFA Charterholder since 2004.

NOT INVESTMENT ADVICE. The content is for informational purposes only; you should not construe any such information as investment advice.

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