Early eVTOL Deliveries Boost EHang's Revenues in 2019

 - March 25, 2020, 7:08 AM
This demonstration flight conducted in a soccer stadium in Austria in April 2019, is one of several early trials that EHang has conducted with its 216 AAV eVTOL aircraft. [Photo: EHang]

Most eVTOL aircraft developers are several years away from even generating revenues and any sort of meaningful account of cash flow and profitability. But on March 24 China’s EHang published fourth-quarter and full-year 2019 unaudited financial results showing growth, albeit from a low starting point for the Nasdaq-listed company.

As of the end of December, EHang had delivered 60 examples of its two-seat 216 Autonomous Aerial Vehicle and 1 of the single-seat 116 model even though the aircraft have yet to achieve type certification. Deliveries have been made to a number of “partners” worldwide who appear to be acting as dealers for the all-electric aircraft. The company also earns some money from conducting light displays using drones and other services.

Total revenues for 2019 reached RMB121.8 ($17.5 million), which was an increase of 83.2 percent on 2018. Revenues from sales of the 216 model accounted for RMB85.9 million ($12.3 million). In the process, EHang reduced its operating loss by 37.7 percent to RMB46.3 ($6.7 million) and its adjusted operating loss by 39.3 percent to RMB31.6 million ($4.5 million).

EHang appears to be focusing on achieving type certification through the Civil Aviation Administration of China. However, it is unclear when this process will be completed—especially in view of the disruption caused by the Covid-19 pandemic.

Nonetheless, it has secured approval from China to conduct a fairly extensive pilot operating program, including carrying passengers. Also, it received permits for limited demonstration flights in the U.S., Norway, and Austria, and these provisional approvals have made possible initial deliveries of the 216. It has established a trial command and control center for urban air mobility operations in Guangzhou, China, and last year signed an agreement to establish another such facility at Heydar Aliyev International Airport in Baku, Azerbaijan.

On Dec. 12, 2019, EHang completed an initial public offering on the Nasdaq Global Market, becoming the world’s first publicly traded UAM company. On March 24, its stock closed at $10.42.

Acknowledging the impact of the current global public health emergency, EHang’s founder, chairman and CEO Huazhi Hu commented: “Our business is experiencing some short-term turbulence from the Covid-19 outbreak. These include absence and late return of frontline workers, delayed fulfillment across our supply chain, and the short-term disruption of some of our customers’ industries, such as tourism. However, this has created new opportunities for us to explore, such as emergency delivery and rescue.”

Earlier this month, EHang expanded its eVTOL development plans in Europe, reaching an agreement with authorities in Spain and Norway for trial operations. However, the pace at which the activities will progress immediately was thrown into question by restrictions on travel and work in both countries, imposed to deal with the Covid-19 pandemic.

On March 18, the Chinese company announced a strategic partnership with the Spanish city of Lliria to develop pilot operations for UAM services. Two days earlier, EHang announced a similar agreement with the city of Seville in southern Spain.

City officials have committed to working with EHang to develop plans for passenger transportation, air logistics operations (including cargo delivery) and command and control platforms. They will also jointly apply for permission to conduct test flights with EHang’s 216 Autonomous Aerial Vehicle.

Back on March 5, the Civil Aviation Authority of Norway issued an operational flight permit for the two-seater 216 aircraft. This will allow the company to start flight trials with an undisclosed local customer, but it has yet to confirm when they will start. The trials are due to be conducted at Elvenes Airport in the far north of Norway.

EHang sees potential for its eVTOL aircraft to be used to support Norway’s extensive offshore oil and gas industry. It also sees multiple other applications across the country’s long strip of sparsely populated territory, much of it offering free airspace.

It appears that EHang’s plans in Seville could follow a similar approach to that taken in Guangzhou, where it has been conducting extensive operational trials. During the Covid-19 outbreak, the company has also used its aircraft to deliver supplies to Chinese hospitals.

EHang already has a partnership with the Austrian city of Linz, where its sister company FACC is headquartered.