Guangzhou to invest $1.4 billion to build infrastructure for flying car by 2027

• 26 June 2024
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Guangzhou is set to invest over 10 billion yuan (US$1.4 billion) by 2027 in the burgeoning “low-altitude economy,” targeting the development of services operating below regular commercial aviation altitudes. This substantial investment is part of China’s strategic push to invigorate its slowing economy, according to Asia.nikkei.com dated 4 June 2024.

The ambitious plan involves building critical infrastructure to support flying vehicles, such as airborne taxis. This includes establishing over 100 take-off and landing points and constructing a general aviation aerodrome with a shorter runway than typical civil airports. The initiative reflects China’s high aspirations for the low-altitude industry and Guangzhou’s goal to become a leading hub in this sector.

Guangzhou is home to two innovative companies, Xpeng AeroHT and EHang, both of which have generated significant interest with their electrically powered vertical take-off and landing (eVTOL) aircraft. These battery-powered aircraft, capable of taking off, hovering, and landing without runways, are seen as practical solutions for urban transport. Priced from around 1 million yuan (US$138,000), these eVTOLs are more affordable than conventional private jets, making them accessible to wealthy individuals and businesses.

Nasdaq-listed EHang has made notable strides, receiving a production certificate to mass-produce its vehicles in April. The company aims to commercialise tourism services in partnership with hotels and other businesses, with inquiries already coming from the Middle East and Southeast Asia. Despite receiving the type certificate and standard airworthiness certificate, EHang still needs an air operator certificate from Chinese regulators to commence commercial operations. The regulatory framework for this is still under development.

In comparison, Xpeng AeroHT is behind EHang in obtaining the necessary certifications. The company’s application for the type certificate was accepted in March, and it anticipates needing up to a year and a half for approval, according to a senior executive.

Traditionally, airspace in China is controlled by the air force, with a prevailing notion that anything “above three meters belongs to the military.” However, with the economy under pressure from a prolonged property crisis, Beijing is easing restrictions on eVTOLs to tap into new growth avenues.

The announcement of Guangzhou’s infrastructure plan follows the provincial government of Guangdong’s guidance to establish the province as a “world-leading industrial hub for the low-altitude economy.” Guangdong, home to China’s tech centre Shenzhen, is poised to benefit significantly from this initiative.

According to an April report by CCID Consulting, a think tank under China’s Ministry of Industry and Information Technology, the market scale of China’s low-altitude economy exceeded 500 billion yuan (approximately US$72.4 billion USD) in 2023, marking a 33.8% year-on-year growth. The market is expected to surpass 1 trillion yuan (US$144.9 billion USD) by 2026.

• Road and Infrastructure