This sector's emphasis on fostering urban industrial innovation, catalyzing new economic growth drivers, and alleviating urban traffic congestion was pointed out by experts, noting its vast market potential and bright developmental prospects.
"China's focus on developing its low-altitude economy is key to boosting urban industrial upgrades and fostering new economic growth drivers while alleviating urban traffic congestion," one expert commented. "This sector has tremendous market potential and very promising development prospects."
However, experts have called for increased efforts to enhance the regulatory framework surrounding the safe operation of unmanned aerial vehicles (UAVs) and other low-altitude activities, as well as to expedite the development of necessary infrastructure such as ground takeoff and landing facilities and airspace management systems.
Although the term "low-altitude economy" lacks an official definition, it broadly encompasses the utilization of airspace below 3,000 meters to conduct various aerial activities. These include a comprehensive suite of operations involving both manned and unmanned aerial vehicles, from aircraft manufacturing to flight operations and integrated services.
The market size of China's low-altitude economy surged to 505.95 billion yuan ($69.9 billion) in 2023, marking a robust 33.8 percent increase from the previous year. It is projected to surpass 1 trillion yuan by 2026, according to insights from a market research report by CCID Consulting.
Particularly, the electric vertical takeoff and landing (eVTOL) sector, which saw revenues increase by 77.3 percent year-over-year to 980 million yuan last year, is anticipated to expand its commercial applications in aerial sightseeing and tourism significantly in 2024. CCID Consulting forecasts that the eVTOL market will continue its rapid growth trajectory in the upcoming years, with the market size expected to reach 9.5 billion yuan by 2026, driven by the accelerated issuance of airworthiness certifications.
These eVTOLs, often termed air taxis, do not require traditional airports or runways for operation. Like helicopters, they execute vertical takeoffs and then transition to fixed-wing flight in the air. This capability presents a viable air traffic solution and an appealing sightseeing option across China's congested urban landscapes.
This year, for the first time, the low-altitude economy has been formally included in the Government Work Report, underscoring its role as a vital component in nurturing new, high-quality productive forces and serving as a new engine for economic growth.
Across the nation, various provincial-level regions have disclosed strategies within their 2024 government work reports to cultivate the low-altitude economy and build related industrial clusters.
Leading this industrial charge, EHang Holdings Ltd, a pioneering Chinese firm in autonomous aerial vehicle technology, is intensifying its initiatives to bolster the commercial use of eVTOL aircraft in sectors such as aerial sightseeing and tourism.
Earlier this month, EHang announced it had secured a production certificate for its EH216-S passenger-carrying pilotless eVTOL aircraft from the Civil Aviation Administration of China (CAAC). This certification marks a global first in the eVTOL industry and represents a significant step towards mass production and subsequent commercial operations of eVTOL aircraft.
"Obtaining the production certificate for our EH216-S model from the CAAC, the first of its kind globally, marks another significant milestone toward mass production of eVTOL aircraft and their commercial use," stated Hu Huazhi, founder, chairman, and CEO of EHang.
The EH216-S, which has previously received both a type certificate and an airworthiness certificate from the CAAC, measures 6.05 meters in length, 5.73 meters in width, and 1.93 meters in height. It boasts a maximum flight range of 30 kilometers and a top speed of 130 kilometers per hour.
Hu emphasized the company's ambitions to introduce safe and reliable pilotless eVTOL aircraft to the global market, aiming to provide safe, autonomous, and eco-friendly air mobility services to a worldwide clientele.
In a recent innovative marketing move, EHang successfully sold several units of its EH216-S models through a livestreaming session on Taobao, an online marketplace operated by Alibaba Group. Additionally, the Guangzhou-based company has established strategic partnerships with several local governments to collaboratively develop a low-altitude economy industry ecosystem.
The certified two-seater EH216-S has also completed its first commercial flight demonstrations in Guangzhou and Hefei, Anhui province, marking another significant stride toward normalizing EH216-S flights for airborne sightseeing at local scenic spots.
Looking ahead, China aims to develop a new model for its general aviation industry characterized by high-end, intelligent, and environmentally friendly features by 2030, targeting the creation of a trillion-yuan market in general aviation equipment.
By 2027, the next generation of general aviation equipment featuring unmanned, electric, and intelligent characteristics is expected to achieve commercial application in urban air transport, logistics distribution, and emergency rescue sectors, as per a recent action plan issued by the Ministry of Industry and Information Technology and three other government departments.
In parallel, Xpeng AeroHT, a flying car unit of Chinese electric vehicle maker Xpeng Motors, has announced that its hybrid terrestrial-aerial vehicle will be available for preorders in the fourth quarter of 2024, with deliveries to individual users commencing in the following year. This innovative vehicle features a dual-mode design, seamlessly transitioning between driving on roads and flying in the air.
Furthermore, AutoFlight, another Chinese eVTOL developer, achieved a milestone by completing the world's first intercity demonstration flight in Guangdong province this February. Its five-seater eVTOL aircraft offers a significantly faster travel option between Shenzhen and Zhuhai, taking just 20 minutes compared to the current three-hour drive.
AutoFlight recently delivered its first Prosperity eVTOL aircraft to a customer in Japan, marking the first global delivery of a civilian eVTOL aircraft weighing over a ton.
The global market consultancy Roland Berger estimates that by 2025, up to 3,000 air taxis will be operational worldwide, with this number expected to skyrocket to 100,000 by 2050. However, the eVTOL sector still faces several challenges, including technological, infrastructural, and regulatory hurdles.
Yu Zhanfu, a partner at Roland Berger, noted that eVTOL aircraft must undergo thorough safety and technological verifications in less populated areas or at natural landscape tourist destinations during the early stages before they can be fully integrated into the urban air mobility market.
In comparison to traditional helicopters, eVTOL aircraft are smaller, lighter, and require less space for takeoffs and landings, which contributes to their growing popularity due to lower operating costs. Yet, they continue to face technical challenges and uncertainties in various weather and geological conditions.
The CAAC reported that the number of registered unmanned aerial vehicles in China climbed to 1.27 million by the end of 2023, marking a 32 percent increase year-over-year.
With 19,000 enterprises engaged in operating these UAVs, the civilian drones flew a total of 23.11 million hours in the country last year, an 11.8 percent increase from the previous year, according to the CAAC.
DJI, the world's largest commercial drone manufacturer by market share, has heavily invested in industry-level drones, which have found extensive applications in agriculture, energy, aerial transport, and public security, significantly contributing to economic and social development.
"The emergence of industry-level drones has reshaped people's lives and production modes, as well as promoted the development of various industries," remarked Zhang Xiaonan, strategic director of DJI. He expressed optimism about the future expansion of drone applications as related technologies continue to advance.
The Shenzhen-based company is particularly focused on agricultural sector drones, aiming to enhance the efficiency of tasks such as sowing seeds and spraying fertilizers and pesticides, thereby increasing the utilization rate of intelligent agricultural equipment.
Zhang highlighted DJI's commitment to advancing the large-scale application of drones in aerial photography, agriculture, inspection, mapping, transportation, and continuously expanding new application scenarios to support the growth of the low-altitude economy.
Han Jun, deputy head of the CAAC, described the low-altitude economy as a strategic emerging industry with a lengthy industrial chain, encompassing sectors such as aircraft R and D and manufacturing, low-altitude flight infrastructure construction and operation, and flight services.
Han emphasized the CAAC's ongoing efforts to enhance the low-altitude flight service system and simplify application and approval procedures for low-altitude flight plans.
Yang Jincai, director of the Shenzhen Unmanned Aerial Vehicle Industry Association in Guangdong province, noted that while traditional application scenarios for UAVs include agriculture, forestry, crop surveys, security monitoring, and geographic mapping, the scope of applications within the low-altitude economy is set to broaden significantly.
However, the sector's development is still at an early stage in China, hindered by security concerns and the lack of effective supervision and emergency response mechanisms for low-altitude flight activities, which poses challenges for urban low-altitude airspace management, Yang added.
He urged for further efforts to enhance the design and planning of low-altitude airspace to optimize the use of airspace resources and meet the diverse needs of various aviation activities, as well as to strengthen the supervision and management of flight activities to maintain airspace order.
Yang Sumei, an associate professor at Guangzhou Maritime University, also emphasized the need for accelerated development of low-altitude infrastructure alongside intelligent management and operating platforms. She called for the establishment of applicable rules and standards to better regulate the rapidly evolving sector.
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