How high can the low-altitude economy soar as US, China battle for supremacy?

It is no coincidence that Nansha, a district in Guangdong province’s capital city of Guangzhou, chose to showcase China’s advances in drones, electric vertical take-off and landing (eVTOL) aircraft and unmanned boat technology during the week-long National Day holiday. In particular, a demonstration by an EH216-S – a passenger-carrying pilotless eVTOL aircraft manufactured by the Guangzhou-based Ehang – was a “charming experience of future unmanned aerial transportation”, the Yangcheng Evening News reported last week during the seven-day “golden week” holiday, which finished on Monday. Dozens of companies around the world are betting on eVTOL aircraft amid increasing competition between China and the United States to make air travel in urban areas more accessible, although neither have begun commercial operations. China, which is the global leader in battery technology, is seeking to emulate its success in electric vehicles with air taxis by making eVTOL aircraft more affordable, with business travel and tourism seen as potential growth areas. “Right now, the battery amortisation cost is the largest contributor to the hourly operating cost of eVTOL aircraft,” said James Wang, a professor at the School of Mechanical and Aerospace Engineering within Singapore’s Nanyang Technological University. “[This is] because the battery must be replaced after hundreds of full charge cycles, and an eVTOL requires a lot of rechargeable batteries.” California-based Joby Aviation, which counts Japan’s Toyota Motor as a major investor, said it was aiming to start commercial services of its battery-powered air taxis in Dubai in the United Arab Emirates from late next year. Ehang, meanwhile, said it could start commercial operations after it receives operator certification from the Civil Aviation Administration of China, which it expects to be towards the end of 2024. According to a report on eVTOL aircraft in April by the Tencent Research Institute, it costs US and European companies at least US$2 billion to obtain certification and mass produce eVTOL aircraft, while it would cost US$1 billion in China. The so-called low-altitude economy was promoted as a new growth engine in this year’s government work report as part of the “new quality productive forces” – a term President Xi Jinping coined last year that envisions scientific research and technological upgrades of China’s sprawling industrial complex. Local governments like Nansha hope to drum up interest from visitors to boost its low altitude economy, which generally encompasses manned and unmanned activities within airspace below 1,000 metres (3,280 feet). Those costs are simply too high for mass adaptation, to say nothing of all the other barriers and challenges Richard Aboulafia, AeroDynamic Advisory The short distances covered by eVTOL aircraft are seen to make them ideal for intracity transport, including getting from a city centre to the airport or between busy locations that could be affected by road traffic. A 30km (16.6 miles) trip could be completed in just 10 minutes via eVTOL aircraft, according to Wang at Nanyang Technological University. But despite the investment, Richard Aboulafia, a managing director at aerospace consulting firm AeroDynamic Advisory, remains sceptical over the market share eVTOL aircraft could capture in the US, where the flying on-demand market is already mature. “The best case scenario is a niche industry, one that takes some of the light helicopter market, and grows it somewhat, depending on costs,” Aboulafia said. “But unless they’re much lower than where we think they’ll be, those costs are simply too high for mass adaptation, to say nothing of all the other barriers and challenges.” Huang Xiaofei, senior vice-president of Shanghai-based eVTOL developer Volant, said eVTOL aircraft are mainly marketed for urban air travel in the US because the use of general aviation in short-distance transport, tourism, emergency and medical services is relatively high. Compared to the US, flying on demand in China remains underdeveloped largely due to airspace restrictions. But the Chinese government’s support for green travel would help to push forward the commercial use of eVTOL aircraft, Huang added. “In the early stage, eVTOLs can be positioned as a supplement to the existing public transportation system, especially in providing high-end business travel, emergency services and tourism experience,” Huang said. US investment bank Morgan Stanley estimated in 2021 that the global urban air mobility market would reach US$1 trillion by 2040, growing to US$9 trillion by 2050. But analysts do not expect a quick return on eVTOL aircraft because it could take another decade for the production of air taxis to become commercially viable. Initially the price of taking these air taxis will be double of the cost of ground taxis per person per mile James Wang, Nanyang Technological University Challenges also include regulations and public acceptance, including a lack of a comprehensive set of rules specifically on the commercial use of eVTOL aircraft, according to the Tencent Research Institute. The US has largely formulated its guidelines based on rules on general aviation, while China is still exploring and developing regulations, the report added. Wang at Nanyang Technological University said eVTOL aircraft must be designed and certified by airworthiness authorities to the same stringent standard as commercial aircraft. “Initially the price of taking these air taxis will be double of the cost of ground taxis per person per mile. But eVTOL ride cost will be half of the price per passenger per mile as compared to taking a helicopter,” Wang added. “It is possible [the development of eVTOLs could drive down costs of flying on demand], but that will not happen until 2035 because we will need the battery price to drop down and the eVTOL aircraft price to drop down due to mass production and economy of scale.”

How high can the low-altitude economy soar as US, China battle for supremacy?

.css-1c6uqr6{color:inherit;font-weight:inherit;font-size:inherit;font-family:inherit;line-height:inherit;overflow-wrap:break-word;}Low-altitude economy is seen a new growth engine for China, highlighted by demonstrations during the recent week-long National Day holiday

Low-altitude economy is seen a new growth engine for China, highlighted by demonstrations during the recent week-long National Day holiday