Memo: China Wants To Own Its AAM Market

LE BOURGET—China has become the single largest market for commercial aircraft, taking almost 25% of deliveries in 2018. Could it do the same for advanced air mobility? 

The country also is moving to reduce its reliance on imported commercial aircraft, the single-aisle Comac C919 finally entering airline service in May after 15 years of development.

Now China’s electric vertical-takeoff-and-landing (eVTOL) startups are picking up the baton of domestic independence. And, with eyes on the market outside as well as inside China, they are claiming low costs that could spell a challenge for their Western competitors. 

Could—if they succeed in certifying their vehicles with China’s regulator and if that certification is then recognized by other aviation authorities around the world. 

As the air show organizers, in partnership with Aviation Week Network, prepare to launch the Paris Air Mobility showcase in Hall 5, China’s ambitions cannot be ignored.

China’s eVTOL industry is like a sprinter that was quick off the line but then decided to walk—until many others joined the race and began elbowing their way to the finish line. 

Guangzhou-based EHang was an early mover and is still likely to be the first to cross the certification finish line this year. But it will have taken the company almost eight years, and in that time the world of eVTOL has changed beyond recognition.

The industry leaders are now in the U.S. and Europe. Technically and financially they are well ahead. The Chinese market is not their initial target, but it is on the list. 

On Monday, Germany’s Lilium announced partnerships to establish eVTOL service in China. It was expected. China’s Tencent was an early investor in Lilium and in May agreed to pump another, much-needed $175 million into the company. Chinese carmaker Geely is in an investor in Volocopter and has a joint venture with the German startup to manufacture and operate eVTOL air taxis in China.

“China represents an enormous opportunity for the eVTOL industry, we believe, projecting it to amount to as much as 25% of the market,” Lilium CEO Klaus Roewe says. But China’s own eVTOL developers have no intention of ceding that market to outsiders without a fight.

There are now at least 10 domestic Chinese eVTOL developers, several of which have flown—or are getting ready to fly—full-scale demonstrators. Among them are Geely subsidiary Aerofugia, AutoFlight, EHang, TCab Technology, Vertaxi and carmaker XPeng’s AeroHT subsidiary. Chinese aerospace giant AVIC looks set to join the fray and even Volkswagen China has flown an aircraft.

What surprises industry watchers like Sergio Cecutta, founder and CEO of SMG Consulting, is how Chinese startups are able to build a full-scale aircraft having raised as little at $20 million and how they can claim production costs as low as $1 million per aircraft. These represent challenging numbers for Western players are are built in part on China’s dominance of the battery market and rapidly growing electric vehicle supply chain.

At least three of the Chinese startups already have secured $150 million or more from investors or banks and launched eVTOL certification programs with the Civil Aviation Administration of China (CAAC). The regulator is new to this, and will be kept busy, so timelines are far from certain, but the race for the Chinese market is on.

Graham Warwick

Graham leads Aviation Week's coverage of technology, focusing on engineering and technology across the aerospace industry, with a special focus on identifying technologies of strategic importance to aviation, aerospace and defense.