Chinese autonomous eVTOL aircraft developer EHang this week secured access to new credit facilities of RMB 1 billion ($149 million) to support further research and development, manufacturing, and operations. The funding arrangement was announced on June 28 with the Agricultural Bank of China (ABC), which will provide EHang with “comprehensive banking services.”
EHang, which is based in Guangzhou, China, is developing a family of all-electric autonomous aerial vehicles (AAVs), including the two-seat EH216 and the larger, longer-range VT-30. The EH216 is designed to autonomously fly passengers across distances of up to 22 miles (35 km). In addition to supporting urban air taxi services, other versions of the pilotless EH216 could be used for firefighting, logistics operations, and even sightseeing tours.
The company has said that it expects to receive Chinese type certification and airworthiness approval for the EH216 this year. If that is achieved, EHang would become the world’s first advanced air mobility company to generate revenues from electric vertical takeoff and landing (eVTOL) flights.
In addition to plans to launch commercial services in the domestic Chinese market, EHang has provisional sales agreements with multiple export customers. These include operating partners and service providers in countries such as Indonesia, Malaysia, and Japan.
“The strategic partnership with EHang is ABC Guangzhou Branch’s first with an AAV technology company in the emerging [urban air mobility] sector,” said Dalong Li, vice president of ABC Guangdong Branch and president of ABC Guangzhou Branch. “We strongly support the improvement of urban transportation and are committed to providing high-quality financial services to high-tech enterprises in this field. The partnership also demonstrates our determination to actively implement China’s 14th Five-Year Plan and support the development of strategic emerging industries.”
In 2019, EHang raised about $46 million from its initial public offering (IPO) on the Nasdaq Global Market. This amounted to less than half of the $100 million EHang had projected to raise when it filed its IPO declaration with the U.S. Securities and Exchange Commission.
EHang was the first of the advanced air mobility start-ups to go public, with many of its rivals later taking this step via a business combination with a special purpose acquisition company. Many of these flotations also failed to meet projected fundraising targets.
In May, the U.S. Securities and Exchange Commission (SEC) notified the Chinese eVTOL aircraft developer that it has been flagged for accounting procedures scrutiny under the Holding Foreign Companies Accountable Act (HFCAA). The notice, served by the federal regulator on May 4, effectively put EHang on notice that it needs to adjust its accountancy process to meet U.S. requirements for transparency.
Publicly owned ABC, which is also known as AgBank, is China’s third-largest lender. It is one of the world’s 10 largest commercial banks.
“We are very pleased to enter into a strategic partnership with ABC Guangzhou Branch,” said Huazhi Hu, founder, chairman, and CEO of EHang, in Tuesday’s statement. “The RMB 1 billion indicative facilities for cooperation will further diversify our funding channels and facilitate our financial flexibility and liquidity to support the continuous execution of our strategic plans and drive our growth momentum in the long run.”
