EHang, a Chinese start-up developing flying taxis, wants to enter the Nasdaq, the second-largest stock market in the United States. The young company wants to raise $100 million on this occasion. EHang has already performed more than 2000 test flights around the world to ensure that its autonomous flying vehicle technology is safe. In February 2018, the Chinese unveiled its new EHang 216 vehicle: this flying taxi has two seats, is equipped with 16 rotors, and has already performed flight demonstrations.
EHang wants to achieve the first commercial deployment
The start-up, which was founded in 2014, hopes to deploy the first commercial service of a low-level air transport network for people and goods in Canton (or Guangzhou) in China. EHang received regulatory approval last August and will help local authorities build a command and control center to safeguard and secure the flying vehicles. First, EHang will deploy a pilot to test different routes and “vertiports” from which its aircraft can take off and land. Beyond people, EHang wants to transport goods such as blood or organs for medical emergencies.
EHang had already raised $42 million in Series B in 2015. However, even if it markets professional drones in parallel with the development of its transport service, it is not profitable. It posted net losses of $5.5 million for the first half of 2019. Above all, EHang would be dependent on only a few customers and would derive 45% of its revenues from a single customer. In June 2019, the company would have received a down payment from two customers for 66% of its total balance, details The Verge. The company would, therefore, be severely impacted if these customers canceled orders or stopped buying Ehang’s products.
EHang stated in its IPO file that it had decided to withdraw from the American and German drone markets due to “intense competition.” The company also refers to the trade dispute between China and the United States to explain its decision. Its subsidiaries in these two countries have been declared bankrupt. The urban air mobility sector, for its part, has been booming in recent years. Many start-ups are trying to enter this market, which is also coveted by players in the VTC, automotive industry, aeronautics industry, and delivery companies.
However, nothing has yet been done. This sector could be strongly impacted in the event of an accident involving a flying taxi. It would inevitably lead to tighter regulation and a slowdown in the approval of these technologies by the population. EHang is aware of this and is striving, like other manufacturers, to test its technologies with as many people as possible.…Read more