EHang Holdings Limited is an urban air mobility (‘UAM’) technology platform company.
The company launches and delivers proprietary passenger-carrying pilotless eVTOL aircraft, related command-and-control systems and commercial solutions, setting new milestones in pilotless eVTOL aircraft innovative technologies and the emerging UAM market.
The company’s eVTOL aircraft require minimal space for vertical take-off and landing, enabling urban travel to expand to the three-dimensional space. The co...
EHang Holdings Limited is an urban air mobility (‘UAM’) technology platform company.
The company launches and delivers proprietary passenger-carrying pilotless eVTOL aircraft, related command-and-control systems and commercial solutions, setting new milestones in pilotless eVTOL aircraft innovative technologies and the emerging UAM market.
The company’s eVTOL aircraft require minimal space for vertical take-off and landing, enabling urban travel to expand to the three-dimensional space. The company’s eVTOL aircraft technologies have the potential to reduce road traffic and associated congestion by taking transportation to the skies while utilizing electric power to reduce pollution.
Unlike other manually controlled UAVs and piloted eVTOL aircraft, the company’s intelligent eVTOL aircraft can fly and operate autonomously from take-off to landing in pre-determined flight routes without any pilot onboard. The company’s in-flight operating systems and on-the-ground infrastructures enable reliable, real-time and cluster management of a fleet of pilotless eVTOL aircraft and efficient operations at scale.
The company strives to design safe, reliable and functional products. The company adopts a full redundancy design approach for its eVTOL products to avoid single points of failure. During the airworthiness certification by the Civil Aviation Administration of China (the ‘CAAC’), the safety, airworthiness, performance, functionality, usability and reliability of the company’s EH216-S have been thoroughly and rigorously validated through over 500 specific test items, more than 40,000 test flights for adjustments, and formal conformity validation tests encompassing 65 major categories and over 450 individual test items. These tests included but were not limited to main material performance, structural strength, flame resistance, crashworthiness, gas toxicity, environmental conditions of equipment and systems, software simulation, data links, ground control stations, overall system functionality, electromagnetic compatibility, flight performance and flight stability characteristics.
In October 2023, the company obtained the type certificate (the ‘TC’) for EH216-S from the CAAC, the world’s first of its kind for passenger-carrying pilotless eVTOL aircraft, demonstrating that the type design of the company’s EH216-S is qualified for conducting passenger-carrying commercial operations. Since December 2023, the company’s certified EH216-S with the standard airworthiness certificate (the ‘AC’) issued by the CAAC began delivery to the company’s customers. In April 2024, the company further obtained the production certificate (the ‘PC’) issued by the CAAC allowing the company’s mass production of the EH216-S. As of March 31, 2024, the flight footprints of the company’s passenger-carrying pilotless eVTOL aircraft have accumulated about 47,000 safe trial or demo flights in 15 countries across Asia, Europe, and Americas, predominantly in China.
With the company’s strategic positioning to be a UAM platform operator, the company adopts an integrated business model by selling products and solutions and providing operational services. The company designs, develops, manufactures, sells and operates eVTOL aircraft and other UAVs and their supporting systems and infrastructure for a broad range of industries and applications, including air mobility (consisting of passenger transportation and logistics), smart city management and aerial media solutions.
The company’s major source of revenue comes from its core business, air mobility solutions, from the company’s continued deliveries of the EH216 series products since 2018. The company delivered 52 units of the EH216 series in 2023.
As of December 31, 2023, the company had delivered 237 units of the EH216 series products, including 220 units of the EH216-S, eight units of the EH216-F and nine units of the EH216-L, mainly operated on a limited trial basis in tourism locations in China, for testing, training, demonstration and trial operation purposes, and the company had also delivered four command-and-control centers or systems for smart city management in China.
Products and Solutions
Adhering to the three fundamental technological principles to ensure safety, which are redundancy, autonomous flying, and cluster management, the company has designed, developed and provided turnkey total solutions to the company’s customers, including its proprietary pilotless eVTOL aircraft and UAVs, related operating systems and infrastructures.
eVTOL Aircraft and UAVs
Based on different designs and uses, the company’s product portfolio mainly consists of the EH216 series, the VT series, the Falcon B, and the GD series.
EH216 Series
The EH216 series consists of the EH216-S (standard model), the EH216-F (firefighting model), and the EH216-L (logistics model). By a multirotor configuration with less complexity and strong reliability, the EH216 series adopt a distributed electric propulsion with 16 propellers driven by 16 independent motors mounted on 8 arms, which not only ensures redundancy and flight safety, but also enables stable and accurate navigating, vertically takeoff and landing in urban airspace. With the eight arms folded, the size of the EH216 series is similar to a private car, taking minor space for storage and vertiports than helicopters and most of other eVTOL aircraft, so as to provide higher flexibility and operation efficiency especially in urban areas.
The company’s flagship product the EH216-S is an electric dual-seat passenger-carrying pilotless eVTOL aircraft launched in 2018, the next generation upgraded from the EH184 and the EH116, the original single-seat prototypes of the company’s passenger-carrying pilotless eVTOL models. Designed for short-to-medium-range low-altitude intra-city air mobility, it has a suitable flight performance for urban environment, the maximum flight range of 30km, the maximum flight time of 25min, and the maximum speed of 130km/h. With maximum takeoff weight of 620kg, the EH216-S can carry two passengers and an 18-inch luggage per flight, with no pilot onboard, and fly autonomously from the origin to the destination along pre-determined flight routes. Through a large panoramic windshield for wide vision and an intuitive tablet interface in front of the seats, passengers can enjoy the bird’s eye view, check the real-time flight status, and communicate with ground crew for support if needed. The modularized structure with an upper cabin for passengers and a lower compartment to house major components and sub-systems ensures structural safety to better protect passengers.
The EH216-F is a firefighting eVTOL aircraft launched in July 2020. It’s developed from the EH216-S and customized for high-rise firefighting. It is equipped with customized firefighting devices, such as fire extinguishing projectiles and launchers, a firefighting foam tank and a high-pressure nozzle. It is capable of flying up to 600m height to distinguish high-rise fires accurately and efficiently, while traditional rescue ladders and fire nozzles cannot reach the height. In July 2021, the EH216-F has passed a comprehensive 10-month technical examination to prove its reliability and performance through 52 different types of tests by the China National Fire-Fighting Equipment Quality Supervision Testing Center, which is under the Ministry of Emergency Management of China.
The EH216-L is an aerial logistics eVTOL aircraft launched in September 2020. It’s developed from the EH216-S and customized for cargo transportation with 250kg payload.
VT Series
The VT series refers to a series of electric lift-and-cruise models the company has designed and developed, consisting of the VT-30, the VT-20, and the VT-10. They combine the advantages of both multirotors and fixed wings, enabling vertically takeoff and landing and longer flight range than multirotor aircraft, while with no requirement for large infrastructures, such as runways.
The VT-30 is a dual-seat passenger-carrying pilotless eVTOL aircraft. Complementary with the short-to-medium-range EH216-S designed for intra-city air mobility, the VT-30 is designed for long-range inter-city air transportation, driven by eight propellers and fixed wings on both sides, as well as a tail wing and a propeller at the rear, to achieve a maximum balance of lift and push. It’s designed for a maximum flight range of 300km and a maximum flight time of 100min.
The VT-20 and the VT-10 are electric medium-sized lift-and-cruise models with four propellers and fixed wings. They are designed for long-range surveillance, power line inspection, air delivery, and others.
The VT series are under internal testing and have not begun their deliveries.
Falcon B
The Falcon B is an electric medium-sized industrial UAV. It is a multirotor with 8 propellers, able to carry 5kg payload to fly 19km in 17min at the maximum speed of 80km/h. As a highly adaptable and extensible flight platform, the Falcon B provides a compatible interface which can be connected and equipped with different custom modules for various industrial uses, such as cargo holds for food or emergency delivery, infrared cameras for forest fire inspection, high-resolution zoom cameras for traffic and facility monitoring, loudspeakers and headlamps for patrolling, etc. They were usually delivered to and adopted by the company’s customers for smart city management.
GD Series
The GD series refers to the company’s electric small-sized quadrotor UAVs, consisting of the GD2.0X used for aerial surveillance, last-mile delivery, aerial media performances and others, and the GD3.0 specially for aerial media performances.
Operating Systems
The company has proprietarily designed and developed an integrated and digitalized operating platform with airborne operating systems installed in its eVTOL aircraft and UAV products, the command-and-control system, the UAM flight operation and management platform, and related infrastructure to allow the company’s products to operate in various scenarios safely and efficiently. The operating systems for different commercial solutions share the same underlying technological architecture.
The company’s airborne operating systems include an autopilot and flight control system, a communication system, a battery management system and a safety management system, among other things. They are installed on each of its products to enable autopilot, navigation, real-time monitoring, control and performance adjustment. Human control can be exercised from the ground using smartphones, tablets or computers, as well as through the company’s command-and-control system, meeting the varied demands of its customers or passengers and contingencies.
Autopilot and Flight Control System
The autopilot and flight control system enables the autonomous operation of the company’s products without any human pilot onboard and helps to ensure that the company’s products fly in pre-determined routes from the origin to the destination with precise vertical take-off and landing.
Communication System
The company has developed proprietary network protocols based on advanced communication technologies to support high-speed wireless networks between its products and ground command-and-control system. The company’s communication system is secured with data-encryption technologies for data security. The company also uses redundant data transmission links, which enable the company to switch to a backup communication system if the primary system is breached.
Battery Management System
The company’s intelligent battery management system, or BMS, is an industrial-grade solution that monitors all parameters of the company’s products’ batteries, including temperature, capacity and voltage. The core of the company’s BMS is the self-adaptive smart battery management algorithm that optimizes the balance between performance and battery life and provides accurate predictions based on data and analysis of flight status. To ensure effective management of battery performance and battery life, an onboard battery management unit transmits real-time BMS data to the flight control system and command-and-control system.
Safety Management System
The company’s products use full-redundancy safety technologies in their flight control system, sensors, propulsion system and battery management system. The company’s proprietary redundancy control algorithms are based on a real-time voting mechanism. The company’s products are designed with distributed electric propulsion, with an aim of achieving the highest level of safety through redundancy and efficiency. In the event of malfunction of certain parts of its products, the operating systems automatically activate the backup components to ensure proper functioning and performance of the company’s products.
Command-and-Control System
The company has extensive expertise in command-and-control system. The company’s proprietary command-and-control system can accurately monitor in-flight status, dispatch aircraft, effect pre-warning and contingency measures, etc. The system ensures that the company’s products fly in pre-determined routes and maintain smooth and efficient operation. It also has the capability to monitor and detect irregularity in the status and operation of the company’s products and to activate contingency measures to restrict and limit actions or movements of its products in emergency situations.
Powered by advanced technologies, the company’s command-and-control system allows for adaptability and scalability. Through continuous uplinks maintained between aircraft and the ground command-and-control system, the company is able to simultaneously manage up to 3,500 units of UAVs with precision and accuracy to complete pre-defined actions and movements in the air for aerial media shows.
Besides the command-and-control system for large-scale operations and management, the company has also developed an app to enable standalone operations through portable smartphones, tablets or computers to individually monitor and control the company’s products.
As of December 31, 2023, the company had delivered four command-and-control centers or systems to the company’s customers for smart city management in Shaoguan, Lianyungang, Hezhou and Shenzhen, in China.
UAM Operational Platform
Digitization is essential for UAM flight operation and safety management. The company has built a digital UAM operational platform architecture and established a visualized flight operation module for managing the EH216-S flight schedule, ground crew, availability of vertiports and landing pads, and other factors across the entire front-line UAM operational process. This platform, which has been put into trial running internally, is designed to connect and interact with the back-end command-and-control system, as well as the future front-end flight booking and payment service windows through either the company’s own app or third-party apps, in order to provide the operation team with a clear and efficient management platform, and offer passengers a smooth flight booking and riding experience.
Infrastructures
Vertiports
Vertiports are also essential for eVTOL aircraft operations and mobility efficiency. The company has developed a set of requirements and different concept of vertiport designs for the company’s eVTOL aircraft, and the company calls it E-Ports.
Taking the EH216-S as an example, each E-Port is identified and registered in the company’s UAM flight operation and management platform, therefore the company’s eVTOL aircraft can serve for on-demand flights only within E-Port network to ensure safety and autonomy.
The company’s E-Ports can locate flexibly at the rooftop, on mountains, near to parking lots, subway or railway stations, airports or harbors, so as to seamlessly connect with other transportation nodes to expand the three-dimensional travel networks.
The scale of each E-Port is determined by the customer demands, density of flight routes and traffic volumes. It could be either a simple landing pad, or a hub station with several landing pads, charging piles, passenger service areas, hangars for storage and maintenance, and more facilities.
Leveraging the advantages of EH216-S’s smaller size, lighter weight, lower noise, higher flexibility compared with helicopters or larger eVTOL aircraft, the E-Port network is easier to be deployed, established and expanded by operators in urban areas with lesser costs and time. Usually, the company’s customers and partners take the role to build E-Ports for their own operations, while the company provides designs and requirements.
Charging Piles
The company has developed and upgraded several generations of efficient and intelligent charging piles for the company’s eVTOL aircraft, and has delivered to its customers along with the company’s products. Powered by fast charging technologies, the company’s charging piles are able to fully charge the EH216 series in approximately 90 minutes. They can also monitor real-time charging status and battery health.
Business Lines
Based on the company’s proprietary innovative products and solutions, the company has established three business lines, which are air mobility, smart city management, and aerial media solutions.
Air Mobility Solutions
Air mobility is the company’s main business line. The company provides customers with safe, autonomous, eco-friendly and efficient eVTOL aircraft products, solutions and operational services for air transportations of passengers, cargos, emergencies, etc.
Passenger Transportation Solutions
The company provides safe and efficient options for low-altitude short-to-medium-range urban air transportation solutions and services to the company’s customers with its certified EH216-S. In addition, the company intends to extent to long-range inter-city air transportation by introducing the VT-30 into the market after its certification in the future.
The company’s main customers are public and private enterprises in the tourism and aviation industries. They can utilize the company’s passenger-carrying pilotless eVTOL aircraft in their UAM operations and businesses for autonomous flight experience, aerial sightseeing, island hopping, medical transport, emergency rescue, airport shuttle, urban commuting services, etc. Compared with the customers’ conventional option of helicopters, the company’s EH216-S has much lower lifetime cost than helicopters by greatly decreasing acquisition price, maintenance costs, and pilot expenses, while providing safer, autonomous, eco-friendly and quieter new way of air mobility.
China is the company’s principal market. Driven by increasingly favorable policies and regulations for civil unmanned aviation and low-altitude economy in recent years, the massive local market demand for various commercial applications, and the company’s EH216-S type certificate from the CAAC, the company has received an increasing number of orders and purchase intentions from the company’s customers in China since 2023.
In March 2023, Xiyu Tourism Development Co., Ltd. (300859.SZ), or Xiyu Tourism, a leading tourism company in Xinjiang, signed a cooperation framework agreement with the company with the purpose to develop low-altitude tourism and sightseeing projects with the company’s products in the Heavenly Lake of Tianshan, a national 5A-class tourist attraction, and other scenic areas in Xinjiang, China. In May 2023, the company established a joint venture with Xiyu Tourism and delivered five units of EH216-S to the joint venture in June 2023. The partnership consists of plans to operate a minimum of 120 units of EH216-S or the company’s comparable passenger-carrying pilotless eVTOL aircraft within the next five years.
In July 2023, the company reached a Memorandum of Understanding (‘MOU’) with the Bao’an District Government of Shenzhen Municipality on a strategic partnership for UAM operations. The company will jointly develop UAM use cases, systems, and routes to build Shenzhen as a national low-altitude economy development demonstration city. A bespoke UAM Operation Demonstration Center for EH216-S has been established by the government and launched debut flights at the OH Bay in Bao’an District with the plan to launch aerial tourism and sightseeing experience services with EH216-S. The company delivered five units of EH216-S to a local customer, Boling, in September 2023 to prepare for flight operations in Bao’an district. Boling has expressed its intent to potentially purchase an additional 95 units of the EH216-S for future use in more Shenzhen areas, as outlined in a signed letter of intent. In January 2024, the company further forged a strategic partnership with the Bureau of Culture, Radio, Television, Tourism, and Sports of Luohu District in Shenzhen for jointly developing aerial tourism and transportation services with the company’s pilotless eVTOL aircraft.
In October 2023, the company entered into a strategic cooperation agreement with the Hefei Municipal Government for joint development of a low-altitude economy ecosystem in Hefei, China. The support will be provided either through the coordination or facilitation of purchase orders for a minimum of 100 units of EH216 series products, and/or by providing financing support. The specific timing, amount and type of support will be subject to definitive agreements. The company has delivered 15 units of EH216-S to the Hefei Municipal Government in December 2023. EH216-S completed passenger-carrying flights in Luogang Central Park, which is positioned to be a leading UAM super aero hub by the Hefei Municipal Government.
In March 2024, the company cooperated with the local government for UAM in Wuxi, China, and received conditional purchase orders for 100 units of EH216-S. The local government will provide comprehensive support for the company’s eVTOL future operations in Wuxi for various use cases including passenger transportation, aerial sightseeing, firefighting and emergency.
Meanwhile, the company explored and expanded broader Asian markets, and received growing product demand from the company’s customers in 2023.
In December 2023, the company extended to the United Arab Emirates (‘UAE’) by joining the Smart and Autonomous Vehicle Industries (‘SAVI’) Cluster, led by the Abu Dhabi Department of Economic Development and the Abu Dhabi Investment Office. Additionally, the company formed a long-term strategic partnership with Wings Logistics Hub, the passenger eVTOLs (smart mobility) and logistics tech subsidiary of Technology Holding Company, being the technology arm of EIH Ethmar International Holding. Wings Logistics Hub intends to purchase up to 100 units of the EH216 series eVTOL aircraft from the company.
In Japan, the company cooperated with AirX Inc., a leading air mobility digital platform company, and MASC, a Japanese aerospace research institution, to have demonstrated EH216-S autonomous flights for multiple applications across 12 cities in Japan. The company was also inducted as a member of Japan’s Public-Private Committee for Advanced Air Mobility in April 2023. In March 2024, Japan’s first UAM Center for the company’s pilotless eVTOL aircraft has been established in Tsukuba, Japan.
In Israel, EH216-S and EH216-L conducted test flights in Caesarea in June 2023 and in Tel Aviv in August 2023 successively, as part of the Israel National Drone Initiative and supported by Dronery and Cando Drones.
In Europe, the company continued active participation and partnership in several UAM projects in 2023.
In July 2023, EH216-S conducted test flights to transport blood bags in Belgium with the supports of Helicus, Drone Port and Blood Services of the Belgian Red Cross. This marked the Europe’s first unmanned flight for medical transportation by a large-payload pilotless eVTOL aircraft.
In November 2023, the company announced the opening of its first European UAM Center in Spain. Located inside the Lleida–Alguaire International Airport, the center is the first-of-its-kind in Europe for unmanned eVTOL aircraft, setting a benchmark globally for the effective integration of eVTOL operations with airport infrastructure, air traffic management systems, operational procedures, and other information technologies.
In February 2024, the company entered into a strategic alliance with Telefónica Tech, a subsidiary of world-leading telecommunications service provider Telefonica, to partner up on network connectivity solutions for deploying UAM intelligent solutions in Europe and Latin America.
Logistics Solutions
The company’s products are capable of providing autonomous aerial logistics solutions, designed to carry and transport goods, cargo, emergency and medical supplies. In addition to offering logistics eVTOL aircraft, the company also design and develop customized aerial logistics solutions and relevant command-and-control systems on the back-end. The target customers of the company’s logistics solutions are logistics or delivery service providers.
Smart City Management Solutions
The company is the first company having developed and delivered the smart city management solutions with integrated and intelligent command-and-control systems or centers that can centralize and coordinate a wide range of UAV applications simultaneously. The company customizes and adapts its UAVs to capture live videos, images and data generated by attached modules such as cameras, electro-optical, infrared or other sensors, and loudspeakers as the company’s customers’ requirements. The signals and instructions are wirelessly transmitted through high-speed telecommunication network between UAVs and the command-and-control systems the company develops for its customers, enabling the company’s customers to receive and send crucial information in real time remotely and safely.
The main customers of the company’s smart city management solutions are public sectors. The company provides an integrated and efficient digital platform with customized UAV models as turn-key solutions for monitoring and management across many ordinary municipal functions and public utilities, such as traffic management, powerline inspection, environmental monitoring, firefighting, emergency rescue, aerial mapping, etc. Compared with the traditional manpower-and-time-consuming working mode, the cost-effectiveness and efficiency are greatly improved.
As of December 31, 2023, except for the first UAV command-and-control center established in Guangzhou for the company’s own use, the company had delivered four command-and-control centers or systems along with suitable models as integrated packages for smart city management solutions to the company’s customers in Shaoguan, Lianyungang, Hezhou and Shenzhen, China. These delivered command-and-control centers or systems are operated by the company’s customers, while the company provides related required trainings and technical supports. Besides, the company sells UAVs to some smart city management customers on a standalone basis, which can be controlled by the company’s app.
Aerial Media Solutions
The company was the first company to launch the aerial media solutions in 2016 and is a player in China and Europe in providing aerial media performances, also known as drone light shows. The company’s services involve managing and choreographing a fleet of UAVs that are equipped with LED lights into a series of moving images. The company utilizes a range of proprietary navigation technologies, operating systems, and infrastructure to deliver smooth and mesmerizing UAV formations, synchronized movement and accurate display of two-dimensional and three-dimensional patterns, brand logos, or messages. The company’s remote command-and-control capacity and auto formation flight system enable the company to support diverse flight missions and light effects with varying degrees of difficulties. The company also uses real-time kinematic satellite-based navigation technology (RTK-GPS) to achieve centimeter-level positioning precision for the company’s UAVs.
The company not only provides large-scale aerial media performance services for outdoor events such as celebrations, festivals, and brand campaigns, but also offer aerial media packages that includes the company’s proprietary GD series UAVs and relevant software to the company’s customers who are able to design and carry out performances themselves with the company’s products.
As of December 31, 2023, the company, together with its customers and partners, had completed over 200 aerial media performances by the company’s UAVs in China and Europe.
Business Strategies
The company’s business strategies are to extend its technological leadership; expand the company’s product portfolio and strengthen the company’s platform; take advantage of the first eVTOL aircraft certifications for entry into market; capitalize the company’s first mover advantages to continue commercialization and promote adoption; keep enhancing commercial operation capabilities; explore new monetization opportunities and develop diversified revenue streams; and expand strategic partnerships across the value chain to develop a sustainable UAM ecosystem.
Manufacturing, Quality Control and Supply Chain
As an original equipment manufacturer of eVTOL aircraft and UAVs, the company adopts a safe, compliant, lean and efficient production strategy across the company’s business, focusing on effective prototyping, manufacturing, supply chain management, final assembly, integration, quality control and final acceptance testing.
Manufacturing
In February 2024, the company reached a strategic cooperation agreement with Guangzhou Automobile Group Co., Ltd. (GAC Group). GAC Group is set to fully capitalize on its extensive expertise in smart manufacturing and its well-structured industrial chain to accelerate the future production, adoption and market expansion for the company’s passenger-carrying pilotless eVTOL aircraft.
Supply Chain
Parts and components sourced from the company’s suppliers must be certified by the China Compulsory Certification or the Underwriters Laboratory, and/or certified with the ISO 9001. The company’s suppliers of key parts and components are additionally required to be certified with AS9100 or alternative equivalent certificates.
Marketing, Sales and After-Sales Services
Marketing
As the first mover in the emerging UAM industry, the company has spent years dedicated to educating the stakeholders of regulators, partners, customers and end users with the company’s innovative and cutting-edge pilotless eVTOL aircraft technologies and knowledges, to increase social acceptance of this new way of air mobility, and to promote the visibility of the company’s EHang brand and products globally. These are necessary and significant efforts to accumulate the company’s customer base and partner network, to cultivate the new market from the infancy stage evolving to the mature period, and to catalyze the establishment of UAM ecosystem for the commercial operations.
The company kept communicating with its customers, investors and followers through multiple domestic and international online and offline channels and activities, including but not limited to the company’s website, various social media and video platforms, e-commerce platforms, hotlines and emails, mainstream media coverages, brand and product launch events, high-profile exhibitions and industry conferences, worldwide trial and demonstration autonomous flights, etc. The consistent exposures and marketing efforts contributed to the company’s brand awareness, reputation and sales leads.
The company issued a white paper entitled The Future of Transportation: White Paper on UAM System in January 2020, which explored in depth UAM’s potential to transform transportation globally with insights into vehicle design, an overview of potential applications and regulatory landscape, and the company’s recommendations as to the optimization of UAM’s path towards commercialization. This white paper has facilitated the education of the emerging market at the early stage and consolidated the company’s thought leadership as the first mover in the innovative industry.
Sales
The company adopted the direct sales model to sell its products and solutions to the company’s customers, which are mainly public and private enterprises. The company has established an in-house direct sales team based in the PRC and Europe to serve the company’s customers from around the world. The company is also in discussion with existing and potential business partners in the PRC and abroad to complement the company’s direct sales efforts with sales to distributors and franchise arrangements.
On top of the company’s sales in the PRC, the company has exported its products to Asia, Europe, North America and Latin America. The company strives to ensure that its exported products comply with the regulatory and safety standards of the local markets.
The company’s customers place purchase orders taking into account the terms of the relevant framework agreement, if applicable, and the customer’s procurement requirements. The company starts production after the purchase order from customers is made, and production generally takes three to six months to deliver. Customers are contractually required to make upfront payment to the company.
Except for purchase orders, the company has also entered into a number of long-term framework and conditional agreements time to time with the company’s customers and business partners relating to preorder or distribution of the company’s products and solutions. These non-binding agreements do not obligate the customers to purchase the products unless certain conditions are satisfied. Fulfillment is expected to take several years and is conditional upon, among other things, achievement of performance milestones and receipt of regulatory approvals.
After-Sales Services and Warranty
The company provides after-sales services for customers of its products. The company offers free installation and training programs thereafter to prepare the company’s customers for its safe operation. The term of the company’s warranty for the EH216 series products is six months to three years depending on the specific parts and components, and the term of the company’s warranty for its small-and-medium-sized UAVs is from six to twelve months depending on the product line and the specific parts and components. Within the warranty period, customers are entitled to free repair and maintenance services, while costs for accessories and maintenance fees beyond the warranty will be charged separately. The warranty on certain components of the company’s products, such as batteries, is covered by the company’s suppliers’ back-to-back warranty and the company is entitled to have the suppliers replace or repair these defective components at their costs. The company also provides its customers with lifetime consulting services on maintenance and operation through the company’s website, over the telephone and via email.
For the company’s commercial solutions, the company provides a full spectrum of services. To facilitate the efficient operation of its command-and-control systems, the company provides, among others, system operation and maintenance training, service support, engineering support, inspection and repair, and technical consulting support. The company’s customers enjoy services throughout the operational life of the company’s command-and-control systems. Most of these services are performed on-site.
The company continues to maintain and upgrade its airborne software infrastructure to enhance the functionality, reliability and safety of the company’s products. The company regularly inspects, maintains and upgrades the fundamental communication network and transmission system to ensure the smooth communication between the company’s aircraft and the command-and-control systems.
In addition, the company will leverage its partners’ strength and network to enhance the company’s service and maintenance capabilities. For example, the company has established a partnership with Hong Kong Aircraft Engineering Company Limited (‘HAECO’), a subsidiary of Swire Group and a world leading aircraft engineering and maintenance company, to cooperate in multiple areas such as continued airworthiness, digital platforms, after-sales maintenance service system, aircraft maintenance, and talent training for the commercial operation of the company’s eVTOL aircraft.
Operational Services
With the company’s strategic positioning to be a UAM platform operator, the company adopts an integrated business model by selling products and solutions and providing operational services. The company plans to initiate commercial operational services to the company’s customers and end users after obtaining required certificates and approvals.
In preparation for commercial operations, the company has established a well-trained in-house air mobility operation team specifically for flight operations of the company’s pilotless eVTOL aircraft, including the staff for route planning, flight operations, safety management, regulatory compliance, digital operational platform, sales and marketing. The company’s key team members have previous operational experience at leading aviation, airline and mobility companies, such as Airbus, Hainan Airlines, Hong Kong Airlines, Hong Kong Express, BMW, CITIC COHC, etc.
As of March 31, 2024, the company and its customers have completed about 47,000 safe trial or demo flights in 15 countries across Asia, Europe, and Americas, predominantly with the EH216-S pilotless eVTOL aircraft in China, mainly for aerial sightseeing and tourism applications. In this process, the company has been exploring and improving operational procedures and safety rules, running its digital UAM operational platform on a trial basis, and developing feasible, replicable operational expertise and mode. The company and its customers plan to switch trial operations into commercial operations after required certifications are completed.
Intellectual Property
As of March 31, 2024, the company had 396 issued patents, 313 pending patent applications, 370 registered trademarks, and 24 registered copyrights in China.
Regulation
The company’s passenger-carrying pilotless eVTOL aircraft, as a special category aircraft under Section 21.17 of Certification Procedures for Civil Aviation Products and Parts, or CCAR-21, is required to meet the criteria set forth in the Special Conditions for Type Certification of EH216-S Unmanned Aircraft System, or the Special Conditions, promulgated by the CAAC on February 9, 2022.
Production Certification issued by the CAAC shows the company is able to manufacture its aircraft or components with approved quality system under an CAAC-approved type design. In April 2024, the company obtained the production certification issued by the CAAC allowing its mass production of the certified EH216-S passenger-carrying pilotless eVTOL aircraft.
In August 2023, the CAAC approved the company’s unmanned aircraft cloud system (‘UACS’) for trial operations based on the China Civil Aviation Regulation Part 91 AC-91-FS-2015-31.
As a manufacturer and seller of UAVs, the company is required to collect certain information relating to its products and the company’s customers and to submit such information to the relevant regional authorities pursuant to the Circular of the General Office of the Ministry of Industry and Information Technology on Information Filing for Civil Unmanned Aerial Vehicle Production Enterprise and Products, which took effect on May 22, 2017.
The company’s PRC related PRC operating entities are required to obtain clearance from the local counterpart of the People’s Liberation Army Air Force for the flight routes for the company’s UAVs.
Both the company’s EH216-S and Falcon B have passed the tests of geo-fencing by the Civil UAS Inspection Center of China Academy of Civil Aviation Science and Technology (CAST), and obtained the certificate from the China National Accreditation Service for Conformity Assessment (CNAS) and ILAC-MRA in July 2019, which is internationally recognized.
The company’s undertaking of the development of command-and-control centers is subject to bidding laws and constructions laws.
The company’s business is subject to a variety of consumer protection laws, including the PRC Consumer Rights and Interests Protection Law, as amended on October 25, 2013, which imposes stringent obligations on business operators.
Research and Development
The company’s research and development expenses were RMB167.3 million (U.S.$23.6 million) in 2023.
History
EHang Holdings Limited was founded in 2014. The company was incorporated in the Cayman Islands in 2014.
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