The Latest: Mainland China-based electric vertical takeoff and landing (eVTOL) manufacturer EHang Holdings (EHang) has received official authorisation to commercially fly passengers in its unmanned aerial vehicle (UAV). The announcement reportedly marks the world’s first unmanned two-passenger eVTOL cleared for commercial use, which is set to accelerate growing public and private investor interest toward the passenger UAV market.
Implications: At the end of 2022 EHang reported it had received 1,200 order requests for its EH216 electric aircraft. Our estimates show that the company stands to generate USD432mn in revenue from the latter orders in the near term following the eVTOL’s clearance for commercial passenger transport. EHang received an official authorisation licence from Mainland China’s Civil Aviation Administration (CAAC) after more than 40,000 flight tests demonstrating various approval requirements including structural strength and environmental impact.
Our view is that key to EHang’s successful eVTOL commercialisation was Mainland China’s leading smart cities ecosystem supporting the country’s unmanned air system traffic management (UTM) and urban air mobility (UAM) network. Although some flight tests have taken place in other countries such as Japan, Israel and Spain, we believe that the main assessments have been conducted in Mainland China due to its high density of connected devices – including telematics – supporting national UTM and UAM networks.
According to the World Economic Forum, in August 2022 the number of connected devices surpassed the number of humans living in Mainland China. Data from the country’s national ICT regulator reports 2.1bn machine-to-machine (M2M) connections at the end of Q223, up 30% y-o-y. BMI expects Mainland China to reach 3bn M2M connections by the end of 2023, rising to 7.7bn in 2032.
