HONG KONG– An oval-shaped unmanned craft from flying taxi maker EHang hovers, whirring noisily like a mini-helicopter above a riverside innovation zone on the outskirts of southern China’s Guangzhou business hub, as part of a test of a mini-flying taxi that once could only be found in science fiction films.
In neighboring Shenzhen, food delivery drones are already a part of daily life and a novelty for tourists, even if these services cost more. In the waterfront park surrounded by skyscrapers, Polish tourist Karolina Trzciańska and her friends ordered bubble tea and lemon tea over the phone, just to try them. Their drinks arrived via drone buzzing in the drizzle about 30 minutes later.
“This is the first time I’ve seen something like this, so it was super fun to see the food delivered by the drone,” she said.
These companies are growing rapidly with government support, although the takeoff of the so-called “low-flying economy” faces obstacles such as strict airspace controls and battery limitations.
Activities in airspace below 1,000 meters (about 3,280 feet) accounted for revenue worth 506 billion yuan ($70 billion) in 2023, or about 0.4 percent of China’s economy. By 2035, it is expected to reach 3.5 trillion yuan (about $490 billion), said Zhang Xiaolan, a researcher at the State Information Center, a think tank affiliated with China’s top planning agency.
Guangdong province, home to drone giant DJI with about 70% of the global commercial drone market, is leading the development of the low-altitude economy, followed by the wealthy eastern coastal provinces of Jiangsu and Zhejiang near Shanghai, according to a report by a research unit of the Chinese Academy of Sciences, Peking University and other institutions.
Other big players in Guangdong include EHang, logistics company SF Express’s drone arm Phoenix Wings, and automaker XPENG’s flying car unit ARIDGE.
In October, Guangdong announced plans to accelerate the construction of flight information stations and platforms to facilitate airspace operations and that it would support locally issued discount vouchers for low-altitude tourism.
Its Shenzhen Technology and Finance Center launched a 15 million yuan ($2.1 million) prize for companies that obtain required certifications for passenger eVTOLs, short for “electric vertical takeoff and landing vehicles” that take off from the ground like helicopters, among other incentives.
The Civil Aviation Administration of China has granted certificates allowing EHang to offer commercial passenger services with its unmanned eVTOL, a low-altitude aircraft that can reach speeds of 130 km/h (81 mph) with a maximum range of 30 kilometers (19 miles).
EHang has not launched commercial routes, but its vice president, He Tianxing, said it plans to start with air tourism services. The company has built takeoff and landing sites in 20 Chinese cities over the past two years. He expects planes from various companies to operate flights on several routes, perhaps after five years.
He envisions possible citywide networks using the roofs of shopping malls, schools and parks as terminals.
“It cannot be just a research product, nor an engineer’s toy,” he said.
The biggest challenge for developing eVTOL planes is maintaining longer flights and overcoming battery capacity limitations, said Guo Liming, co-founder of Shenzhen-based Skyevtol, whose manned single-seat eVTOL plane, priced at about $100,000, can only fly for 20 to 30 minutes before needing to be recharged.
It hasn’t all been cloudless either.
In September, two XPENG eVTOL planes collided after an exhibition rehearsal and one caught fire during landing. The company said no one was injured, but another exhibition canceled aerial demonstrations a week later.
Undeterred, XPENG continued to introduce its flying cars, including a six-wheeled ground vehicle equipped with a detachable eVTOL aircraft. After investing more than $600 million, the company said it has more than 7,000 global orders for its “land-based aircraft carrier” and has begun preparing for mass production.
A trial of sightseeing flights to Dunhuang, a key destination on the ancient Silk Road famous for its Buddhist caves and dunes, is planned for next July.
It’s unclear how quickly these planes could begin carrying paying passengers on a regular basis. Some companies elsewhere have exhausted their funding before reaching the commercial launch phase. In Germany, air taxi manufacturers Lilium and Volocopter filed for bankruptcy, but the latter was later bought by Diamond Aircraft Group, a subsidiary of a Chinese company.
After years of commercialization, drone applications are not very widespread in China.
Although the country is a leader in drone technology and manufacturing, political constraints, including limited access to airspace, could mean overseas markets are more promising, said Frank Zhou, chief executive of GBA Low Altitude Technology Co., which provides technology software to its clients.
“Maybe for some Southeast Asian countries, if I introduce these apps to them, their demand might explode,” he said.
Less than a third of China’s low-altitude airspace was accessible to general aviation in 2023 and there were problems with uneven distribution and lack of internet connectivity, Zhang, a researcher at the State Information Center, said in a report. The number of registered general aviation aerodromes in China, excluding private airports, is barely a tenth of that in the United States, she said.
Chinese policymakers are gradually working to close the gap. The military generally controls the use of most of China’s airspace, but has pledged to simplify approval procedures and shorten review times in Shenzhen and five other provinces.
The proposed revisions to the Civil Aviation Law include a chapter on the development and promotion of civil activities, dealing with the allocation and supervision of low-altitude airspace.
It’s still early, said Gary Ng, senior economist at Natixis Corporate and Investment Banking.
He expects progress toward commercialization to materialize around 2030, with eVTOLs carrying passengers for tourism or industrial purposes starting before air taxi services. Some airline products could become key exports, he said.
China is a latecomer to the industry, but is now leading in the development of small drones and investment in low-altitude airspace, said Chen Wen-hua, director of the Low-Altitude Economy Research Center at the Hong Kong Polytechnic University.
One advantage is the ruling Communist Party’s ability to mobilize regulators, industry players and academia to work toward the same goal, he said. But the development of the technologies involved, safety concerns and public acceptance will determine how quickly the various applications of drones and low-flying vehicles are adopted.
The future of the low-lying economy is bright, Chen said, “however, the path to this bright future may be fraught with pitfalls.”
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Associated Press video producer Olivia Zhang and researcher Yu Bing in Beijing contributed to this report.
