On the evening of March 15th, EHang Holdings Limited (EH.US) released its financial report for the fourth quarter and full year of 2023.
Throughout the year, the company’s total revenue was RMB 1.174 billion (approximately USD 16.5 million), representing a yearly increase of 165%; net loss was RMB 302.3 million (approximately USD 42.6 million), narrowing by 8.2% annually. A total of 52 EH216 series autonomous aerial vehicles were delivered throughout the year, with an additional 21 planned for delivery in 2022.
After the financial report was released, EHang soared. As of the closing on March 15th Eastern Time, it rose by 12.93% to $15.37.
With EHang obtaining the TC certification in October 2023, its performance saw a small outbreak in the fourth quarter. ‘After obtaining TC and AC, market demand for EH216 significantly increased, with single-quarter deliveries reaching the highest level in three years,’ said Hu Huazhi, founder, chairman and CEO of EHang during the Q4 2023 earnings call.
In the fourth quarter of 2023, EHang delivered 23 EH216 series eVTOL aircraft. In the fourth quarter of 2022 and the third quarter of 2023, they delivered 6 and 13 aircraft respectively, driving revenue to reach RMB 56.6 million (approximately USD 8 million), a year-on-year increase of 260.9%. It is estimated that total revenue in the first quarter of this year will be around RMB58 million, a year-on-year increase of 160%.
In cities such as Shenzhen, Guangzhou, and Hefei, EHanghas successively completed commercial first flight demonstrations. Hu Huazhi mentioned that hundreds of pre-orders for EH216-S have been received in Shenzhen, Guangzhou, Hefei, Wuxi, and the United Arab Emirates.
With the growth in sales volume, EHang achieved positive operating cash flow in the fourth quarter. As of the end of December 2023, the total amount of cash and cash equivalents, short-term deposits, short-term investments, and restricted short-term deposits held by the company was RMB 334.1 million (approximately USD 47.1 million).
“In order to prepare for the next stage of large-scale production, the production license PC audit work is also coming to an end. Currently, the inspection team from the Civil Aviation Administration of China has completed all on-site inspections and is expected to obtain PC in the near future.” Hu Huazhi revealed that another model VT-30 will also undergo airworthiness certification within this year. At present, VT-30 has completed all overall configuration verification and test flights. “For urban air transportation, air taxis should have the largest volume, so EH216 is the first to be certified. With VT-30, these two models basically cover all application scenarios of low-altitude economic travel in China.”
In 2024 is seen as the ‘first year of low-altitude economic commerce’. In December 2023, low-altitude economy was listed as a strategic emerging industry. Since this year, about 20 provinces in China have included relevant content on low-altitude economy in the government work report for 2024.
In addition to EHang Intelligent, top manufacturers at home and abroad are pushing for airworthiness certification. AutoFlight’s V1500M aims to obtain airworthiness certification this year, while TCab Tech’s E20 and Volante VE25 X1 have submitted TC applications. In addition, AEROFUGIA AE200, Vertaxi Matrix1, Joby S4, Lilium Jet, Vertical VX4 and other models are all in the airworthiness certification stage. Lilium Jet and Vertical VX4 plan to be certified in the second half of 2025 and 2026 respectively.
Although various positive signals have been released from the policy side, the low-altitude economy is still in its early stages, and neither the production nor operation side has yet benefited from economies of scale. Previously, He Tianxing, Vice President of EHang, stated that due to the current insufficient production volume and high prices of components in the industrial chain, cost pressures on the production side still exist before achieving economies of scale.
EHang has been operating at a loss since its establishment. As of the end of 2023, the accumulated losses amounted to RMB 1.7545 billion (USD 247.1 million). The replication and promotion of the EH216-S commercial model are also seen as key to improving cash flow and achieving profitability.
SEE ALSO: Ehang’s Autonomous Aerial Vehicle Receives Type Certificate
“At present, we are carrying out a series of commercial operation preparations, including operator training and the development of operating systems. This year will see the commercial operation of air taxis, transforming one-dimensional traffic into three-dimensional traffic on a large scale,” said Hu Huazhi.
In February this year, the company started cooperation with GAC Group. Hu Huazhi revealed that the consensus reached by both parties is ‘to work together on production’: ‘GAC is also working on flying cars, which will be developed and produced by EHang. Recently, we have selected Guangzhou as the production location with GAC, where we will establish an automated production line.’
“The development of low-altitude economy is closely related to the integration level of air traffic control. It is very important to integrate air traffic control technology in managing military aircraft, civil aircraft, drones and other aircraft within a transportation network. The commercialization of low-altitude economy is divided into freight and passenger transport. Because it involves life safety, freight transport usually comes first, followed by passenger transport. However, the flight control system, power system, and unmanned platform behind them are consistent. The difference in cycles between the two will not be too far apart; I predict it will be within five years,” said Zhang Zhiyong.
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