EHang Secures Landmark Order for 300 eVTOL Aircraft, Propelling China's Low-Altitude Economy

EHang Holdings Limited (Nasdaq: EH), a global pioneer in autonomous aerial vehicle (AAV) technology, has announced a groundbreaking partnership with Wencheng County in Zhejiang Province, China. This collaboration marks a significant milestone in developing China's low-altitude economy and urban air mobility (UAM) sector. With this agreement, Wencheng County joins other pioneering regions in China, such as Guangdong province and Beijing, in embracing eVTOL technology. Together, these forward-thinking initiatives are positioning China at the forefront of eVTOL technology adoption and implementation.

Key Highlights of the Agreement:

• Major Aircraft Order:  Wencheng County has placed an initial order for 30 EH216-S pilotless eVTOL aircraft, with plans to acquire an additional 270 units by 2026, totaling a fleet of 300 aircraft.
• Strategic Partnership:  The agreement aims to transform Wencheng into a major low-altitude economy zone, targeting a market size of over RMB 1 billion (approximately US$140 million) for operational services by 2026.
• Infrastructure Development:  Multiple aerial sightseeing routes will be established at scenic locations, including Tianding Lake and Baizhangji Falls, supported by a network of vertiports and charging stations.
• Tourism Enhancement: As one of the top ten ecological tourism cities in Zhejiang Province, Wencheng aims to leverage EHang's technology to provide unique aerial sightseeing experiences. This innovative approach to tourism has the potential to significantly boost visitor numbers and tourism revenue, setting Wencheng apart as a cutting-edge destination.
• Economic Impact:  The initiative, by developing a comprehensive UAM ecosystem, is expected to create numerous job opportunities, boost tourism, and stimulate local economic growth.
• Innovation Hub: Wencheng County plans to create over 10 showcase applications for low-altitude technologies, positioning itself as a UAM innovation and development center.

EH216-S Large-Scale Order

The 300 EH216-S eVTOL aircraft order represents one of the largest global commitments for passenger-carrying eVTOL aircraft. This substantial order demonstrates growing confidence in EHang's technology and the viability of urban air mobility solutions. The initial purchase of 30 units, with plans for an additional 270 by 2026, provides a clear roadmap for the gradual integration of eVTOL aircraft into Wencheng County's transportation and tourism infrastructure.

The scale of this order is particularly significant for several reasons:

• It provides EHang with a stable, long-term customer and revenue stream, potentially accelerating its profitability.
• The large fleet size will allow for comprehensive real-world testing and data collection, which can inform future aircraft design and operations improvements.
• It sets a precedent for other regions in China and globally, potentially catalyzing similar large-scale adoptions of eVTOL technology.

Financial Implications

Let's break down the financial aspects of the deal:

1. Initial Order: The 30 units in the initial order are valued at approximately $12 million. The customer has already paid 50% of this amount as a pre-delivery down payment, which would be around $6 million.
2. Future Order: The planned purchase of 270 additional units by the end of 2026 represents a potential future investment of $108 million. A non-refundable deposit has been paid for this portion, although the exact amount has not been disclosed.
3. Total Commitment:  The total financial commitment, including both the initial order and the planned future purchase, amounts to $120 million throughout the agreement

This financial structure provides EHang with immediate capital to support production and demonstrates the customer's long-term commitment to the project. The substantial down payments and deposits indicate a high confidence level in EHang's ability to deliver on its promises and the potential of eVTOL technology to transform local transportation and tourism.

Local Economic Impact

The partnership between EHang and Wencheng County is expected to have a positive effect on the local economy:

• Job Creation: Developing a comprehensive low-altitude industry chain will create numerous job opportunities across various sectors. This includes roles in aircraft operations, maintenance, tourism, and support services. The emphasis on recruiting and training specialized talent suggests focusing on high-skilled, well-paying jobs that can contribute to long-term economic growth.
• Tourism Boost:  Introducing aerial sightseeing routes at popular attractions will significantly enhance Wencheng's tourism offerings. This unique experience could attract domestic and international visitors, increase tourism revenue, and support local businesses in the hospitality and service sectors.
• Infrastructure Investment: Establishing vertiports, charging stations, and other supporting facilities will require substantial infrastructure investment. This construction activity will provide immediate economic benefits and lay the groundwork for future growth in the UAM sector.
• Innovation Ecosystem:  By positioning itself as a hub for UAM technology development, Wencheng County may attract innovative companies and startups to the region. This could create a vibrant tech ecosystem, further diversifying the local economy and attracting skilled professionals.
• Supply Chain Development: The large-scale deployment of EH216-S aircraft will necessitate the development of a robust local supply chain for components, maintenance, and related services. This could lead to the growth of local businesses supporting the low-altitude economy and potentially attract suppliers from other regions to establish a presence in Wencheng.
• Spillover Effects: The development of the low-altitude economy will likely have positive spillover effects on other sectors of the local economy. For example, the increased visibility and visitor numbers could benefit retail, real estate, and other service industries.

EH216-S Maintenance and Support

To ensure the long-term success of this initiative, EHang plans to establish a comprehensive local maintenance and service ecosystem. This includes:

• Developing an integrated industry chain with specialized maintenance operations.
• Cultivating local service enterprises to support the growing fleet.
• Training a skilled workforce capable of maintaining and operating the EH216-S aircraft.

While specific details about maintenance facilities have not been provided, the order scale suggests that EHang may establish a dedicated service center in the area. This would ensure the fleet's continuous operation and create additional job opportunities and regional technical expertise.

EHang's partnership with Wencheng County marks a pivotal moment for urban air mobility and China's low-altitude economy. This collaboration aims to transform Wencheng into a model for innovative urban transportation and tourism, while providing valuable insights into large-scale eVTOL integration. The project will likely attract global attention from industry stakeholders and policymakers. Its success could catalyze wider adoption of eVTOL technology and low-altitude economy strategies, potentially reshaping urban transportation and regional development worldwide.

For EHang, this partnership offers a unique opportunity to showcase the EH216-S aircraft's capabilities in real-world conditions, potentially solidifying its position in the competitive eVTOL market. As the project unfolds, its impact on local economic growth, tourism, and the broader UAM ecosystem will be crucial to monitor.