China’s flying taxi leader aims to launch airport services within 3 years

China’s leading flying taxi company aims to launch airborne services from major airports within three years that will cost as little as $30, as the race to deploy electric vertical take-off and landing vehicles heats up.

The plan highlights the ambition of EHang, which this year became the first company in the world to obtain airspace regulator approval to commercially operate pilotless eVTOLs.

The Civil Aviation Administration of China restricted its initial approval to journeys that start and end at the same point, and EHang plans to run sightseeing flights in the cities of Guangzhou and Hefei.

But Conor Yang, EHang’s chief financial officer, said Beijing’s prioritising of the so-called low-altitude economy — referring to activity in airspace below 1,000 metres — meant the company expected to be allowed to deploy its craft in a wider range of contexts soon.

“It’s not called the ‘low-altitude industry’, it’s called an ‘economy’,” Yang said in an interview at the company’s headquarters in Guangzhou. “So in that vision it’s definitely not just used for tour spots . . . it’s used for transportation and for public services.”

Yang, a former Goldman Sachs and Lehman Brothers banker, said the company expected trips in its air taxis to cost Rmb200-Rmb300 ($28-$42), slightly more than a premium ride on a ride-hailing app such as China’s DiDi, but less than a top-tier luxury transfer.

The company’s “first-mover advantage” and the industry’s strict regulatory requirements guaranteed it a market edge for two years, he said.

Airport transfers should be cheaper than tourist offerings as they would not be restricted by closing hours at scenic spots, he added.

EHang has developed software it says allows it to simultaneously operate large numbers of its EH216-S aircraft, an egg-shaped and somewhat cramped two-person aircraft that launches itself into the air with a noisy electric whirr.

“In this city we can envision hundreds or even more than that — thousands — at the same time,” he said. Where a typical drive from Shanghai’s Hongqiao airport into parts of its Pudong business district could take an hour, the EH216-S could do the 15km journey in 12 minutes, Yang said.

China’s national and local authorities see the low-altitude economy as a potential source of economic growth. Policymakers have supported it with billions of dollars’ worth of infrastructure investment and the creation of a national-level government department dedicated to the drone industry.

Globally, the air taxi industry has suffered false starts and a wave of insolvencies as companies struggle to find business models that allow them to earn money while assuaging the concerns of regulators.

In recent years, Chinese companies have leapfrogged US and European competitors thanks to policy support and the country’s command of battery and drone technologies.

A number of companies, including Shanghai-based AutoFlight and Guangzhou electric-car maker Xpeng, say they have or will soon have the CAAC approvals needed to start mass-producing and selling aircraft.

Emerson Xu, chief executive of Singapore-based NexAvian, said he expected China to be the first country to have significant air taxi services between airports and city centres.

While the small size and agility of EHang’s EH216-S might help it gain acceptance from city authorities, its current range of 35km is not far enough to offer trips from Guangzhou’s main airport to its central business district.

Xu said EHang would also face competition from other companies that were close to obtaining licences, especially those such as Xpeng that are offering piloted eVTOL aircraft for private use and thus do not need operator certificates.

“It’s definitely not a moat in terms of technology or regulation,” he said. “We will see the gap closing.”

All eVTOL hopefuls in China will need to rack up large numbers of flight hours in order to make passengers and regulators comfortable over populated areas.

“There still exists a whole ecosystem problem that not enough flying is done,” Xu said.