Markedly lower costs and a potentially vast domestic market would appear to support the case that China is fertile territory for cultivating the new advanced air mobility (AAM) sector. According to Louis Liu, the founder and CEO of Beijing-based consultancy DAP Technologies, strong political will from the highest levels of China’s government to achieve growth from the so-called “low-altitude economy” is now bolstering prospects for the country’s eVTOL pioneers.
It is now almost a year since EHang achieved a world-first by securing type certification for its EH216-S eVTOL aircraft from the Civil Aviation Administration of China (CAAC). It has since earned a production certificate allowing it to increase manufacturing rates of the two-seat autonomous vehicle.
However, along with its partners and customers, the company still does not hold the air operator certificate (AOC) required to begin regular commercial tourist flights. Instead, it has had to gradually expand operations with temporary permissions to conduct small-scale demonstration flights in specific locations in some Chinese cities.
As exceptional as EHang’s achievement was, other Chinese start-ups are also accelerating plans for AAM products and services. These include eVTOL developers Aerofugia, Xpeng HT Aero, AutoFlight, and Volant.
According to Liu, Chinese AAM players are well placed to bring new aircraft into commercial service at a much lower cost to manufacturers in the U.S. and Europe. He told AIN that while prospects for profitable operations may be fundamentally similar for Chinese companies and their Western rivals, “the unit cost of aircraft will be reduced by 30% to 50% [in China], and that will be a big advantage.”
Air taxi services are a major part of the business model for eVTOL aircraft, but Liu indicated it could take longer than expected to get these up and running in China. He believes that the cost of getting approval for the new aircraft to the higher safety standards required for air taxis could prove to be too costly and difficult for the new Chinese start-ups to achieve in the short term. In his view, it could take another 8 to 10 years at least before this use case is commercially viable.
China's Cost Base is Far Lower
While DAP estimates it will likely cost around $2 billion for Western companies to achieve type certification with either the FAA or EASA, the cost in China will vary between ¥1 billion ($141 million) and ¥ 5 billion ($705 million), depending on the safety requirements for the aircraft’s intended use case. For initial tourist flights, Liu estimated the approval cost to be around ¥1 billion, rising progressively to the higher amount for an aircraft meeting equivalent Western safety benchmarks of between 10-7 and 10-9.
By comparison, in the second quarter of 2024, California-based Archer Aviation reported operating expenses totaling $121 million, and its rival Joby reported $144 million in costs for the same period. Germany’s Lilium has not yet reported its second-quarter financial results, but its first-quarter report to shareholders projected a cash spend rate of up to €195 million ($217 million).
Commenting on progress made by China’s AAM trailblazer, EHang, Liu acknowledged that the lack of an AOC is proving to be a brake on commercialization. “If you want to sell a big number of aircraft to the market, you need to have many AOC operators,” he told AIN. “EHang plans to get their own AOC at first and then train several operators to get an AOC as well. While the AOC is not as difficult as the type certificate, it is not an easy matter.”
New Chinese AOCs for pilotless passenger-carrying eVTOL flights are expected to be issued under new CCAR-92 rules “for the safety administration of civil unmanned aircraft operations.” Liu indicated that these rules, which only cover tourist flights, not air taxi services, would be fairly similar to U.S. Part 91 requirements but only apply to uncrewed aircraft operations.
This year has seen the launch of some helicopter shuttle services, such as the connection between Shanghai’s Pudong International Airport and the Kunshan City Terminal in nearby Jiangsu province that is operated by Shanghai Newsky Helicopter Co. Liu welcomed this trend, which he feels could serve as an incubator for eVTOL air taxi operations.
Volant, AutoFlight, Aerofugia, and Xpeng Challenge
Shanghai-based AAM start-up Volant is raising its profile in the race to bring eVTOL aircraft to market. The company has held no fewer than five funding rounds since February 2024 and has submitted a type certification application to the CAAC for its VE25-100 aircraft. DAP Technologies, which helps companies navigate the emerging AAM sector, indicated that the Volant team is working on the special conditions certification basis for its aircraft before it can advance the certification plan and means of compliance.
“They must go step by step and it will be a long journey,” Liu said. However, he maintained that the lift-and-cruise architecture of the VE25-100 is simpler than those of Joby’s S4 aircraft and the Archer Midnight and that it will have an easier path to type certification.
AutoFlight has also filed a type certificate application for its Prosperity I model. In March, the company earned a type certificate for its autonomous cargo-carrying eVTOL aircraft.
With significant financial backing from Chinese battery-making giant CATL, Liu indicated that AutoFlight is well placed with strategic investment. He suggested that CATL could prove to be the first among other big Chinese corporations seeking a piece of the AAM action as the sector matures. AutoFlight also has an engineering center in Germany and an office in the U.S.
EHang has also been looking beyond its domestic market and has already conducted flight demonstrations with the EH216-S in several European countries, including Spain. This week, the company obtained an experimental flight authorization certificate from Brazil's National Civil Aviation Agency. It is expected to display the aircraft at the Air Taxi World Congress in Dubai during October.
Aerofugia was the first Chinese company to make a type certificate application for a piloted eVTOL vehicle. The company, which now has its design assurance system approved, is aiming to complete the process in 2026. It completed a Series B funding round in June but has yet to report how much fresh capital it raised.
Unlike some rivals, Aerofugia already holds an AOC. According to Liu, it is focusing on using helicopters to develop the longer-term potential for urban eVTOL services and is targeting established business aviation operators such as Citic Offshore Helicopter and Sino Jet.
In August, Xpeng HT Aero launched a second Series B funding round to build on the $150 million it raised in the first round. It has established a manufacturing venture in Guangzhou, where it plans to build the airborne section of its hybrid "land carrier" vehicle.
The Chinese AAM sector as a whole was boosted by a statement issued on July 21 by the Central Committee of the Communist Party of China emphasizing the importance of developing both general aviation and the low-altitude economy. Liu said the endorsement of the low-altitude economy as a strategic emerging industry gives a mandate for all levels of government in China to implement policies facilitating the sector’s development.
Liu told AIN that he is optimistic about how far AAM will advance in China by 2030, based mainly on the country’s solid electric vehicle and drone industries. He said the scale of the domestic market and the availability of vast numbers of engineers are major plus factors for the country.
While acknowledging that the majority of the start-ups will not accomplish their goals, he predicted success for those that do. In his view, tourism and logistics applications will be the most favorable early use cases for eVTOL aircraft by 2030, with higher-volume air taxi services not getting established until between 2040 and 2050.