The Global Low-Altitude Economy, Q2 2025: Strategic Advances and Market Acceleration

The low-altitude economy, encompassing economic activities within airspace below 1,000 meters and extending to 3,000 meters when operationally necessary, achieved significant milestones during Q2 2025 (April-June). This rapidly maturing industry, driven by cargo delivery, urban air taxi services, and medical transport applications, witnessed substantial progress in regulatory certification, manufacturing acceleration, and commercial partnerships across global markets.

China maintained its leadership position through continued government investment and operational deployments, while North America advanced toward commercial readiness through regulatory breakthroughs and strategic partnerships. Europe faced consolidation challenges but sustained regulatory development, and emerging markets demonstrated growing engagement with international partnerships and infrastructure development.

China’s Continued Market Leadership and Operational Scale

China’s low-altitude economy demonstrated sustained growth throughout Q2 2025, with market projections indicating the sector could reach 1.5 trillion yuan ($210 billion) by the end of 2025. The National Development and Reform Commission’s dedicated Low-Altitude Economy Development Division, established in late 2024, guided coordinated development across nearly 30 provincial governments that incorporated low-altitude initiatives into their annual work reports.

Shenzhen reinforced its position as China’s low-altitude economy capital during Q2, generating 21.38 billion yuan in value-added output across over 1,900 enterprises, representing a 26.4% year-over-year increase. The city has completed over 780,000 commercial drone sorties since 2023 across 203 active routes and 121 takeoff and landing points, demonstrating operational maturity well beyond demonstration phases.

Guangdong Province continued to lead in manufacturing capabilities, with 2,143 certified eVTOL test flights completed early in the year. Meanwhile, partnerships such as Changan Automobile’s joint venture with EHang aimed to achieve an annual production of 500 passenger-grade eVTOLs by 2026. Sichuan Province established a 3 billion yuan special fund in February, allocating 300 million yuan annually with funding up to 50% for eligible projects, and designated over 400,000 square kilometers of reserved airspace for low-altitude use.

The rapid expansion of operational capabilities became evident through real-world applications. From January to April 2025, Chengdu recorded over 45,000 low-altitude flight sorties, while UAVs in Shiqu County bridged the “last mile” for package delivery to remote villages, and blood transport operations in Zigong demonstrated life-saving medical applications.

North America’s Regulatory Breakthroughs and Manufacturing Scale

The Federal Aviation Administration achieved critical regulatory progress during Q2 2025, with several companies advancing significantly through the certification process. Joby Aviation reached 70% completion on its Stage 4 FAA type certification program and over 50% completion on the FAA side, representing a 10-point increase from Q1 2025. The company commenced final assembly of its first Type Inspection Authorization (TIA) aircraft, with pilot testing expected to begin in 2025 and FAA pilots following shortly thereafter.

Joby’s operational progress accelerated during the quarter through the successful completion of 21 full-transition flights in Dubai, validating commercial readiness across maintenance, logistics, aircraft capabilities, and infrastructure requirements. Critical April milestones included pilots completing vertical-to-wingborne transition flights, while structural tests exceeding real-world stresses passed FAA scrutiny.

Manufacturing capabilities expanded substantially across the industry. Joby’s Marina, California, facility doubled in size during the quarter, reducing final assembly time by 30% Toyota’s manufacturing expertise. The company closed on the first $250 million tranche of Toyota’s $500 million strategic investment, supporting production scaling. Joby ended Q2 2025 with $991 million in cash and short-term investments, maintaining the strongest liquidity position in the industry.

Archer Aviation demonstrated significant manufacturing progress with six Midnight aircraft in production, including three in final assembly. The company achieved record financial liquidity of $1.7 billion in cash and cash equivalents, marking the fourth consecutive quarter of record cash reserves. Despite reporting a net loss of $206 million, Archer completed an $850 million financing round in June and maintained an adjusted EBITDA loss of $119 million, within guided ranges.

Strategic acquisitions accelerated during Q2. Archer acquired OverAir’s patent portfolio and critical employees, alongside Mission Critical Composites’ manufacturing assets and a 60,000 square foot defense-specialized composite manufacturing facility. These acquisitions support both defense program development and future commercial aircraft variants.

The FAA provided regulatory guidance that could accelerate Advanced Air Mobility deployment. President Trump issued executive orders on June 6, 2025, prioritizing safety and security while accelerating American innovation in drones, eVTOLs, and supersonic technology. The FAA committed to reviewing these executive orders and determining implementation approaches.

Europe’s Regulatory Development Amid Market Consolidation

European air transport demonstrated resilience during Q2 2025, with overall air capacity from and within Europe reaching 458 million departure seats, reflecting a 4% year-on-year increase and 5% rise compared to pre-pandemic levels. Spain became the largest market with 49.5 million departure seats, surpassing the UK’s 48.4 million, while Italy ranked third with 37.6 million seats.

However, the Advanced Air Mobility industry faced significant consolidation challenges. The number of city/region-based AAM programs declined from 95 in October 2024 to 74 by summer 2025, primarily due to Lilium’s operational challenges and strategic shifts at major manufacturers. Despite these setbacks, regulatory development continued progressing through EASA’s ongoing certification framework development.

European airline groups achieved record performance during Q2 2025. Air France-KLM reported quarterly revenue of €8.4 billion, a 6% increase compared to Q2 2024, with record-high operating revenues and net profits for Europe’s three largest airline groups by revenue. This strong performance in traditional aviation provided a stable foundation for Advanced Air Mobility integration.

Latin America’s Certification Leadership and Commercial Partnerships

Brazil maintained its leadership position in Latin American low-altitude economy development through significant regulatory and commercial milestones. The National Civil Aviation Agency of Brazil (ANAC) had previously published final eVTOL airworthiness criteria for Eve Air Mobility in November 2024, establishing the foundation for type certification. During Q2 2025, ANAC opened a sectoral consultation on safety objectives for eVTOL aircraft on June 24, with the consultation period extending through July 8, 2025. This regulatory progression represents a critical advancement in the certification process, enabling Eve to focus on defining means of compliance applicable to its eVTOL aircraft with both ANAC and the FAA for simultaneous validation.

Eve Air Mobility demonstrated substantial commercial progress during Q2 2025. The company secured its first binding framework agreement with Revo, a São Paulo-based urban air mobility operator, for up to 50 eVTOL aircraft valued at $250 million. This milestone represents Eve’s transition from development to execution, with first deliveries planned for Q4 2027.

The company’s development program accelerated through strategic partnerships. Eve added BETA TECHNOLOGIES as an additional partner, leveraging their 70,000+ hours of flight expertise and electric motor technology to prepare the eVTOL for first flight in late 2025 or early 2026. Full-scale prototype development advanced with successful ground tests and a new 4-blade rotor configuration designed for quieter, more comfortable passenger experiences.

Commercial momentum continued to build through multiple international partnerships. Future Flight Global signed agreements for over 100 eVTOLs across Brazil, Costa Rica, and the United States. At the same time, partnerships with AEROSOLUTIONS GROUP and Bluenest by Globalvia brought Eve’s pre-order book to approximately 2,800 aircraft valued at $14 billion. Eve’s ecosystem solutions, including TechCare and Vector, achieved operational readiness, supporting 28 customers across nine countries.

Drone Delivery Services and Market Expansion

The drone delivery industry achieved significant operational expansion during Q2 2025. Walmart and Wing Google’s subsidiary) completed over 150,000 drone deliveries since 2021, with operations from 18 Supercenters in the Dallas-Fort Worth region achieving thousands of weekly deliveries and average fulfillment times under 19 minutes. Wing announced plans to expand drone deliveries from Walmart centers to major U.S. metropolitan areas, including Atlanta, Charlotte, Orlando, and Tampa, by June 2026.

The Federal Aviation Administration proposed new regulations during Q2 that could accelerate drone delivery adoption. The proposed rule streamlines the process for companies to fly drones beyond visual line of sight over longer distances, potentially enabling millions more U.S. households to access drone delivery services. Previously, companies required waivers and air carrier certification for such operations, creating regulatory bottlenecks that limited expansion.

Amazon expanded its Prime Air operations during the quarter, receiving FAA permission to operate autonomous drones beyond pilot line of sight and expanding from College Station, Texas, to suburban Phoenix with plans for Dallas, San Antonio, and Kansas City deployment. The global drone logistics and transportation market demonstrated substantial growth potential, with a market size estimated at $1.61 billion in 2024 and projected to reach $16.15 billion by 2030 at a CAGR of 48.1%.

Financial Performance and Investment Trends

Q2 2025 financial results revealed mixed performance across the low-altitude economy industry. While Chinese companies maintained strong government backing and achieved revenue-generating operations, North American companies continued facing pre-revenue challenges despite substantial financial resources.

Joby Aviation maintained the industry’s strongest financial position with $991 million in cash and short-term investments, while Archer Aviation achieved record liquidity of $1.7 billion. Eve Air Mobility continued building toward commercial operations with comprehensive ecosystem development and strong partnership momentum.

Blade Air Mobility, a helicopter and short-distance aviation services company, reported Q2 2025 improvements with medical revenue increasing 17.6% year-over-year and net loss improving by $7.6 million to $3.7 million. The company ended Q2 2025 with $113.4 million in cash and short-term investments.

Emerging companies also demonstrated progress. Ondas Holdings reported record quarterly revenue of $6.3 million in Q2 2025, a 555% increase from $1.0 million in Q2 2024 and 48% growth quarter-over-quarter, driven by execution at Ondas Autonomous Systems and global demand for autonomous drone systems. Arrive AI achieved its first-ever revenue of $90,725 while building strategic partnerships for autonomous delivery network development.

Market Dynamics and Technology Integration

The low-altitude economy’s financial landscape during Q2 2025 reflected the industry’s transition from development to pre-commercial phases. Bank of America Institute’s June 2025 analysis projected global civil adoption of eVTOLs could grow by 62% from 2025 to 2030, driven by enhanced safety, environmental benefits, reduced noise, and lower selling prices compared to helicopters.

Six primary end-applications for eVTOLs gained clarity during Q2: public security, logistics distribution, medical and firefighting, tourism, urban commuting, and intercity/intracity transportation. These applications demonstrated varying levels of market readiness, with medical transport and logistics showing the fastest adoption rates.

Artificial intelligence integration accelerated across drone delivery operations. Companies developed AI algorithms capable of interpreting weather data for real-time route adjustments, with predictive analytics optimizing delivery routes based on historical traffic patterns, weather trends, and delivery history. These technological advances supported operational scaling while maintaining safety standards.

Regulatory Framework Evolution

The regulatory environment evolved significantly during Q2 2025 across multiple jurisdictions. The FAA’s approach reflected a balance between safety requirements and innovation acceleration, while ANAC demonstrated leadership in establishing comprehensive eVTOL certification frameworks that other regions could adopt or validate.

International collaboration strengthened through bilateral agreements and harmonization efforts. Brazil’s ANAC maintained its history of cooperation with other certification authorities through bilateral contracts, enabling global validation of certification work with reduced additional testing requirements. This approach provided Eve Air Mobility and other Brazilian companies with clear pathways to international certification.

The European approach emphasized comprehensive safety frameworks while managing industry consolidation challenges. Despite program reductions, regulatory development continued through EASA’s systematic approach to Advanced Air Mobility integration.

Strategic Outlook and Industry Maturation

Q2 2025 marked a critical transition period for the global low-altitude economy, with clear differentiation emerging between regions and companies based on regulatory progress, financial resources, and operational capabilities. China’s comprehensive government support enabled continued operational scaling, while North America’s market-driven approach achieved significant regulatory milestones despite extended development timelines.

The industry’s maturation became evident through actual commercial agreements rather than letters of intent, regulatory publication of final certification criteria rather than preliminary frameworks, and manufacturing scale-up rather than prototype development. Brazil’s publication of final eVTOL airworthiness criteria, combined with multiple companies achieving Stage 4 FAA certification progress, demonstrated regulatory frameworks reaching operational readiness.

Looking toward the second half of 2025, three critical factors will determine continued industry development: successful completion of Type Inspection Authorization testing by leading North American companies, scaling of commercial operations beyond early adopter markets in China and select international regions, and resolution of infrastructure development funding across diverse regulatory environments. The industry’s ability to maintain momentum while addressing public acceptance, noise concerns, and operational safety will determine success in achieving projected market potential through the remainder of the decade.

The convergence of regulatory maturity, manufacturing capability, and commercial partnerships achieved during Q2 2025 positioned the global low-altitude economy for operational deployment rather than continued development phases, marking a fundamental shift toward commercial reality in the rapidly evolving industry.