Executive Summary / Key Takeaways

• Pioneering Commercialization: EHang Holdings Limited has achieved a critical first-mover advantage by securing the initial Air Operator Certificates (OCs) for human-carrying pilotless eVTOLs in China, officially ushering in the era of commercial air mobility and establishing a significant regulatory moat.
• Strategic Pivot for Sustainable Growth: Following OC issuance, EHang has strategically shifted its focus from rapid deliveries to building a robust operational foundation and providing comprehensive customer support, aiming for long-term, sustainable growth through a "dual-engine" model of manufacturing and operational services.
• Technological Leadership & Innovation: The company's core autonomous flight technology, coupled with aggressive R&D in solid-state batteries (achieving 66-minute flight endurance) and advanced propulsion systems, underpins its competitive edge and enables cost-effective, scalable urban air mobility solutions.
• Strong Financial Rebound & Liquidity: After a temporary Q1 dip, EHang demonstrated a significant rebound in Q2 2025, delivering 68 units and generating RMB147.2 million in revenue, alongside a positive adjusted net income. The company maintains a strong liquidity position with RMB1.2 billion in cash and equivalents as of June 30, 2025.
• Global Expansion & Diversified Applications: EHang is actively expanding its global footprint with demo flights in 20 countries and pursuing certifications internationally, while also diversifying its product portfolio into long-range passenger (VT35), logistics (VT20), and emergency rescue eVTOLs to tap into a broader low-altitude economy market.

The Dawn of Urban Air Mobility: EHang's Foundational Role

EHang Holdings Limited, established in 2014, stands at the forefront of the burgeoning Urban Air Mobility (UAM) industry, pioneering the development and commercialization of pilotless electric vertical takeoff and landing (eVTOL) aircraft. The company's foundational strength lies in its fully autonomous flight systems, a critical differentiator in a nascent market. EHang's overarching strategy is to evolve from a pure eVTOL manufacturer into a comprehensive UAM platform operator, offering a one-stop solution encompassing hardware, software, operational services, and standardized systems. This integrated approach is designed to capture value across the entire lifecycle of air mobility.

The global low-altitude economy is rapidly gaining momentum, particularly in China, where it has been recognized as a strategic emerging industry and a key driver of new quality productivity. Government initiatives, including the establishment of a dedicated low-altitude economy development department by China's National Development and Reform Commission (NDRC) and localized development plans in over 50 cities, underscore the significant market opportunity. This supportive regulatory and policy environment provides a fertile ground for EHang's growth, with projections for hundreds of thousands of vertiports and routes to be built across China in the coming years. The company's strategic partnerships with major infrastructure players like China Construction Group and China Communications Construction Company aim to jointly develop over 100 urban air mobility terminals and more than 100 low-altitude cultural tourism terminals in national 5A-level scenic areas over the next three years.

Technological Prowess: The Engine of EHang's Advantage

EHang's competitive moat is deeply rooted in its differentiated autonomous aerial vehicle (AAV) technology. The company's core EH216 series, particularly the EH216-S, is a multi-copter configuration that boasts a compact six-meter by six-meter footprint. This design makes it lightweight and minimizes infrastructure requirements for takeoff and landing sites, enabling large-scale deployment in tourist areas and urban environments. This contrasts sharply with competitors' larger, often 10-plus meter wingspan aircraft, such such as tilt rotors and lift-and-cruise models, which typically demand expensive, large-scale airport infrastructure, rendering them impractical for dense urban deployment.

The tangible benefits of EHang's technology are quantifiable and significant. The autonomous flight approach eliminates pilot training and employment costs, contributing to superior economics. The EH216-S sells for RMB2.39 million domestically, a price point significantly below many competitors' large aircraft, which can exceed RMB10 million. As EHang accumulates more operational data, its continuous airworthiness programs are expected to drive further cost reductions, strengthening its competitive position.

EHang is aggressively pursuing R&D in critical areas to enhance its technological lead. The company has established partnerships with Goshen, Hitec, and Jueen to develop customized cylindrical battery solutions leveraging advanced 46 series cells. These batteries are designed to improve the EH216 series with longer range, better power output, and greater safety. A significant breakthrough has been achieved in solid-state battery technology, where EHang is the world's first to install and conduct actual flights with solid-state batteries on an eVTOL aircraft. This innovation has successfully increased the EH216-S's flight duration from 48 minutes to an impressive 66 minutes. The energy density of this solid-state battery has nearly doubled from 250 Wh/kg to 480 Wh/kg, while the temperature rise during flight has been reduced from 60-80°C. EHang is actively seeking airworthiness certification for this solid-state battery technology, with an estimated grant by the end of 2025. Furthermore, the company is collaborating with Greater Bay Technology on fast-charging batteries to significantly reduce charging time and with Enpower for electric motors and controllers that offer lighter weight and higher power density.

These technological advancements are not merely incremental; they are foundational to EHang's long-term growth strategy. The enhanced flight endurance, reduced operational costs, and compact design directly contribute to a stronger competitive moat, allowing for broader application scenarios and improved financial performance through higher margins and increased market penetration. The company's "AI Plus" strategy, integrating AI across the entire eVTOL lifecycle for intelligent flight control, autonomous detection, and fleet management, further solidifies its position as a leader in smart, low-altitude ecosystems.

Competitive Landscape: A First-Mover's Advantage

EHang operates in a highly competitive, yet nascent, industry. Its primary direct competitors include Joby Aviation (JOBY), Lilium (LILM), Volocopter, and Archer Aviation (ACHR). While these rivals are also developing eVTOL aircraft for urban air mobility, EHang has carved out a distinct first-mover advantage, particularly in regulatory certifications. A Benzinga article highlighted EHang's pole position, noting it is the "first and only" company cleared to operate autonomous, human-carrying air taxis commercially, while American rivals like Joby and Archer are still navigating certification hurdles. This regulatory edge, particularly the Air Operator Certificates (OCs) granted by the CAAC, provides EHang with a significant 2-3 year commercialization lead in the critical Chinese market.

EHang's EH216-S multi-copter design offers a compact footprint and minimal infrastructure requirements, making it highly suitable for dense urban and tourist deployments. This contrasts with the larger, often 10-plus meter wingspan aircraft favored by some competitors, which necessitate extensive and costly airport-like infrastructure. EHang's autonomous flight approach also eliminates pilot training and employment costs, contributing to superior economics. The domestic selling price of the EH216-S at RMB2.39 million is notably lower than competitors' larger aircraft, which can exceed RMB10 million. This cost advantage, combined with its regulatory head start, positions EHang favorably for mass adoption in diverse applications.

While competitors like Joby Aviation and Archer Aviation have demonstrated strong revenue growth from partnerships and prototype testing, EHang's focus on fully autonomous operations and integrated smart city infrastructure offers greater efficiency in urban environments. Lilium and Volocopter, with their emphasis on high-speed regional transport and piloted urban taxis respectively, cater to different market segments, but EHang's diversified product portfolio, including the upcoming VT35 for intercity travel and VT20 for logistics, aims to cover a broader spectrum of air mobility needs. EHang's strategic partnerships, such as with China Road and Bridge Corporation (CRBC) for global market expansion and with the Hefei municipal government for the VT35 product hub, further bolster its competitive standing.

EHang's competitive disadvantages include a historical dependency on the Chinese market and potential supply chain dependencies. However, the company is actively mitigating these by expanding its global presence, pursuing international certifications, and deepening collaborations with upstream partners to enhance supply chain resilience. The high R&D costs, stringent regulations, and specialized technological expertise required in the AAV industry act as significant barriers to entry, helping EHang defend its pioneering position and sustain its margins.

Financial Performance and Operational Momentum

EHang's financial trajectory reflects its journey from a pioneering R&D-focused entity to a commercially viable enterprise. The year 2024 marked a pivotal moment, with the company achieving its first-ever annual adjusted net income of RMB43.1 million and positive operating cash flow of approximately RMB160 million, becoming the first eVTOL company globally to achieve non-GAAP profitability. Total revenues for 2024 reached RMB456.2 million, a substantial 288.5% year-over-year increase, driven by 216 EH216 series unit deliveries.

The first quarter of 2025 presented temporary headwinds, with deliveries of 11 EH216-S units and revenues of RMB26.1 million. This dip was attributed to seasonal slowdowns, client budgeting cycles, and deferred orders awaiting the crucial Air Operator Certificate (OC) issuance. However, the subsequent second quarter of 2025 demonstrated a robust rebound, with 68 EH216 series units delivered, generating RMB147.2 million in revenue. This represented a 44.2% year-over-year growth and a 4.6 times sequential rebound, underscoring continuous market demand.

EHang's gross margin has remained consistently strong, standing at 62.6% in Q2 2025, stable compared to 62.4% in Q2 2024 and Q1 2025. This indicates sustained market competitiveness and stable pricing power for its products. The company reported an adjusted net income of RMB9.4 million in Q2 2025, a 19.9% increase from Q2 2024, and a significant turnaround from the adjusted net loss of RMB31.1 million in Q1 2025. This return to profitability highlights the operational leverage gained as deliveries scale.

Operating expenses in Q2 2025 were RMB173 million, with adjusted operating expenses (excluding share-based compensation) at RMB158.2 million, reflecting increased R&D investment and workforce growth to support commercial expansion. EHang maintains a strong liquidity position, with cash and cash equivalents, restricted cash, short-term deposits, and short-term investments totaling RMB1.2 billion as of June 30, 2025. The company also raised over US$23.8 million through an at-the-market offering in Q2 2025, further bolstering its capital reserves for future R&D, production expansion, and commercial operations.

Strategic Outlook and Guidance

EHang has strategically adjusted its full-year 2025 revenue guidance to approximately RMB500 million, a moderation from its initial RMB900 million projection. This adjustment is not due to weak demand or production capability, but rather a deliberate pivot to prioritize safety and the establishment of a robust commercial operations foundation following the issuance of the Air Operator Certificates (OCs). The company is now placing top priority on providing comprehensive support services to existing customers, ensuring their eVTOL aircraft can enter safe, orderly, and regular commercial operations. This "phased guidance adjustment" is designed to enable more efficient and sustainable commercial expansion in the long term, positioning the company for "significantly faster growth" in 2026.

The company's strategic focus for the second half of 2025 is on operational execution and supporting customers in achieving safe, regular operations. This includes optimizing commercial operation processes, managing risks effectively, and ensuring high-quality and scalable demonstration flights. EHang is transitioning its revenue model to a "dual-engine approach," combining eVTOL manufacturing with operational services, expecting a more balanced revenue mix and long-term sustainable growth.

On the product front, the VT35, a long-range lift and cruise pilotless passenger eVTOL designed for intercity travel, is a key focus. Flight tests are progressing well, and the company plans to debut the VT35 in September 2025. The Hefei municipal government is supporting the establishment of a VT35 series product hub with approximately RMB500 million through aircraft orders, investments, and industry ecosystem development. EHang's 2025 CapEx guidance remains at $14 million, allocated for production capacity expansion, new model development, and new headquarters construction. OpEx is expected to grow at 40% year-over-year in 2025, with revenue growth projected to outpace expense growth, leading to a continued decline in the ratio of SG&A to revenue. The company anticipates achieving GAAP profitability quarterly in the second half of 2025, with full-year GAAP profitability targeted for 2026.

Risks and Challenges

Despite its pioneering position, EHang faces several risks inherent in a nascent industry. Regulatory compliance remains paramount, and while EHang has achieved significant breakthroughs in China, international airworthiness certification processes are complex and vary by country, potentially slowing global expansion. The company's strategic shift to prioritize operational safety and customer support, while prudent, could temporarily impact delivery volumes and revenue growth in the short term.

Competition is intensifying, with numerous players vying for market share. While EHang holds a regulatory advantage in China and a cost advantage with its EH216-S, larger competitors with substantial financial backing could accelerate their own certification and commercialization efforts. Supply chain dependencies, particularly for advanced components like batteries and motors, could also pose challenges to production scale-up and cost management. Furthermore, the successful adoption of UAM services by the public hinges on building trust in the safety and reliability of pilotless aircraft, requiring continuous investment in safety frameworks and operational excellence.

Conclusion

EHang Holdings Limited stands at a pivotal juncture, having successfully transitioned from a visionary R&D company to a commercial operator in the nascent Urban Air Mobility sector. Its achievement of the first Air Operator Certificates for human-carrying pilotless eVTOLs in China represents a monumental regulatory and commercial breakthrough, establishing a significant first-mover advantage. This regulatory leadership, coupled with EHang's proprietary autonomous flight technology and aggressive innovation in areas like solid-state batteries, forms the bedrock of its competitive strength and long-term investment thesis.

While the company's strategic pivot to prioritize operational safety and customer support has led to a moderated revenue guidance for 2025, this prudent approach is designed to build a sustainable foundation for scalable commercial operations and significantly faster growth in 2026. EHang's robust financial position, demonstrated by its Q2 2025 rebound and strong liquidity, provides the necessary capital to execute its ambitious technological roadmap and global expansion plans. As the low-altitude economy gains traction worldwide, EHang's integrated platform, diversified product portfolio, and unwavering commitment to safety position it as a compelling investment opportunity poised to redefine urban transportation and logistics.