During the two sessions, Ding Lei proposed a case study and suggested focusing on the development of the low-altitude economic field.
What is a low-altitude economy? At present, there is no unified concept, but we can simply understand it as a concept dominated by the general aviation industry, involving low-altitude flight, air tourism, regional passenger transport, general aviation services, scientific research and education and many other industries.
In the proposal, Ding Lei suggested that the scope and restriction of low-altitude opening should be gradually expanded, an industrial chain cluster should be formed, key talents in the general aviation industry should be cultivated, and special subsidies should be set up.
Not long before this proposal, the US group also made moves. On March 2, Beijing Sankuai Technology Co., Ltd. added a new foreign investment, the investment company is Shenzhen Meituan Low-altitude Logistics Technology Company, with an investment ratio of 100%.
In fact, in the past year, electric vertical take-off and landing vehicle (eVTOL) companies have already experienced a period of high light. For example, China's Xiaopeng Huitian raised $500 million, Joby Aviation was listed on the New York Stock Exchange, and Hyundai announced that it had spun off its urban air traffic division into a separate business unit, Supernal.
At present, Ding Lei, Meituan, etc. have set their sights on the low-altitude economy, will there be new development variables in the industry? In the future, what direction will the entire industry develop?
The track has gathered more than 250 companies
The low-altitude economy encompasses many industries, such as air transportation, air tourism, air rescue, etc., and these related industries need an aircraft as a carrier, whether it is traditional helicopters, small fixed-wing aircraft, or emerging eVTOL.
Fixed-wing aircraft require longer runways to assist take-off and cannot serve point-to-point traffic within or near the city. Helicopters are heavy and maneuverable, but they are noisy when flying, have high operating costs, and are expensive to maintain. Compared with the first two, eVTOL, which is quieter, less costly and can take off and land anytime, anywhere, is the first choice for urban air transport companies.
At present, at least 250 companies from all over the world have entered the urban air traffic track. There are three main forces in this: airlines, car companies and start-ups.
Due to the connectivity of the business and the challenges it can bring to airlines, many traditional aviation companies such as Boeing, Airbus, Embraer and AVIC have already deployed in the eVTOL space.
On the other hand, car companies are also eager to try. Hyundai announced at the end of 2021 that it had spun off its urban air traffic division into a separate business unit, Supernal, with the goal of bringing aircraft to market by 2028. Toyota invested about $394 million in Joby.
Domestic car companies are not idle. Back in 2017, Geely acquired the entire business and assets of American flying car startup Terrafugia. At the beginning of this year, Geely Technology's Wofei Changkong and Volocopter announced that they will jointly build a joint venture company - Longkongtai, and the newly established joint venture company will be responsible for the production and market operation of Volocopter products in China, and plans to land urban air travel in China in the next 3 to 5 years.
Xiaopeng Automobile, a new car-making force, has also established Xiaopeng Huitian, and has now developed five generations of intelligent electric manned aerial vehicle products, and the sixth generation of flying cars is scheduled to be mass-produced in 2024.
In the start-up part, domestic companies were established relatively late, most of them are in the A round and earlier stage. Foreign Jobs, Archer, etc. have rushed to the listing stage.
2022 is a key year for airworthiness certification
Some of these companies have already committed to starting commercial operations around 2024, such as Joby plans to start commercial operations in 2024 and AirCar plans to transport its first passengers in early 2025. But aircraft involve public safety, so an airworthiness certificate is a prerequisite for conducting commercial operations.
Sergio Cecutta, founder and partner at SMG Consulting, believes that the industry's main event in 2022 will certainly be airworthiness certification, especially for companies looking to commercialize in 2024.
Some of the operational objectives of eVTOL enterprises
However, due to the fact that eVTOL belongs to an emerging field, the civil aviation regulatory authorities have no mature experience in applying airworthiness certification of flying vehicles, and civil aviation regulatory authorities around the world are currently exploring.
On February 9 this year, the Civil Aviation Administration of China officially released the "Special Conditions for the EH216-S Unmanned Aerial Vehicle System of EHang". Although this is still some distance from the real airworthiness certification, it is not difficult to see from this "special conditions" that the Civil Aviation Administration of China has a relatively high acceptance of unmanned aerial vehicles.
Xu Huaxiang, chief strategy officer of EHang Intelligence, said in an interview with the media that the release of the "Special Conditions" is a major milestone in the history of global aviation development.
eVTOL is divided into two modes: driverless and manned. Although the Federal Aviation Administration (FAA) and the European Aviation Safety Agency (EASA) have made earlier progress in eVTOL certification than China, they are mainly aimed at manned mode, and Joy and Archer in the United States and Lilium in Germany are all certified by airworthiness authorities in manned mode.
In January of this year, AirCar underwent a rigorous 70-hour flight test according to EASA standards, and after completing more than 200 take-offs and landings, it officially received an airworthiness certificate from the Slovak Transport Authority.
Domestic Fengfei Aviation Technology also announced at the beginning of the year that it has established a European R&D and airworthiness center in Augsburg, Germany. The first mission of the Fengfei European team is to start the European airworthiness certification work of the Fengfei autonomous driving eVTOL manned vehicle V1500M Shengshilong in 2022, and it is planned to finally achieve EASA airworthiness certification in 2025.
On March 3 this year, the FAA and the UK Civil Aviation Authority (CAA) also issued a statement on eVTOL, saying that discussions were underway between the two sides to focus on facilitating the certification process for new eVTOL.
In the U.S., eVTOL can be approved by three core aviation regulatory authorities before large-scale commercial operations: type certification, production certification, and operational certification.
Model certification is the regulatory approval of the design's airworthiness and is the first step toward commercialization. A study done by Root Baker McKenzie, many companies are currently at this stage.
Production certification is specific eVTOL that will allow for mass production. The certificate is granted only after the manufacturer has been able to prove that it can produce a model certificate that complies with the model certificate standard.
Finally, commercially operated eVTOL requires additional operational requirements and authorizations to be used to transport passengers or cargo.
Morgan Stanley analysts estimated last year that the potential market value of eVTOL could reach $1 trillion by 2040, assuming favorable regulatory outcomes. But given the stringent safety requirements, especially when operating in dense urban environments, there are noise and pollution issues, regulatory risk is one of the most underrated risks in the industry.
Beyond airworthiness certification, there are more challenges
EHang started the preparation work for airworthiness certification in 2017 and now the introduction of the EH216 airworthiness certification standard, which has lasted for five years.
From the perspective of this cycle, whether these companies can apply for airworthiness certificates is put aside first, and whether they can have sufficient funds to ensure their survival before this is also a key issue. The aviation industry has always been a capital-intensive industry, and many believe that eVTOL could cost $1 billion from design to manufacturing to certification.
The high cost of technology commercialization is driving the trend of SPAC in the industry. Last year, Lilium, Archer, and Joby went public through SPACE.
Domestic enterprises have also continuously refreshed the industry financing ceiling. In September last year, just when Fengfei Airlines completed a round of financing of $100 million, the outside world was still lamenting the largest single financing, and a month later, Xiaopeng Huitian completed more than $500 million in financing.
The large amount of cash inflow means that these companies do burn money, but whether they are enough depends on the progress and cost-effectiveness of each company.
Partial eVTOL corporate financing
In addition to these, the systematic development of the low-altitude economy is still facing some challenges, including insufficient top-level design, unsatisfactory institutional mechanisms, lack of market development, obvious shortcomings in technical support, and so on.
These challenges, like newly developed aircraft, are brand new.
In the case of the vertical airports that eVTOL requires, for example, most scenarios require the construction of vertical airports in and around the city, where eVTOL will take off and land, charge, carry and drop off passengers. But who pays for airport construction? In addition, in urban facilities, which may normally be limited to a maximum of a few aircraft, but during peak hours space will be needed to accommodate dozens of aircraft that need to land, charge, carry passengers and take off, so the scalability of these airport operations and the land space required will be another challenge.
Of course, we also see that some countries are already paying attention to the airport issue. For example, in March this year, the FAA issued an interim draft guidance, an engineering bulletin on airport design standards for eVTOL, to support the design and operation of eVTOL initial operating facilities.
There is also the issue of social regulation. If it is really operating, how will the "route" be developed at that time? What are the driving rules? How is the liability for accidents divided? How can air law enforcement be achieved? How can drivers be trained to meet driving needs?
There are many more problems. Obviously, it takes time to clarify these issues, and time is a huge cost for these companies.
If it flies, what can the low-altitude field do?
The low-altitude economy is not a new concept, and there are already forms of commercial operation, such as licensed training flights, leisure and recreational flights, etc., which have become a huge industrial cluster in developed countries. The development of general aviation in China is relatively slow.
After the emergence of new aircraft, there have been some new commercial application scenario selection and design, including air taxis and short-distance logistics transportation in the city.
Joby CEO and founder Joe Ben Bevelt has said that the initial price of Joby air taxis will be comparable to the cost of a taxi or Uber, with the goal of quickly reducing the cost of driving a private car.
He also gave a post-commercialized tariff in 2024, which would be to launch the service at an average price of around $3 per mile and drop it to less than $1 per mile over time. It's understood that Uber's costs vary by city and time, but are typically between $1 and $2 per mile.
Jiang Jun, co-founder and CMO of Shi Technology, also revealed in an interview with the media that the charging standard after mass production is about 2 yuan per seat per kilometer, and the point-to-point fixed shift.
In the low-altitude logistics part, last year's World Artificial Intelligence Conference Meituan publicly expressed the logic of laying out low-altitude logistics. "What we are exploring is not just the distribution aircraft itself, but also the hope to build an urban low-altitude logistics network that integrates autonomous flight drones, automated airports and drone dispatching systems. Through the five self-developed technical capabilities of aircraft, navigation control, AI algorithm, route management, and communication system, it adapts to various scenarios such as communities, shopping malls, and office buildings, so that drones and riders can form a coordinated distribution of man and machine, and truly realize 'everything to home'. ”
Of course, there are also some companies that choose other areas. For example, EHang has chosen to go hand in hand on the two tracks of air transportation and smart city.
In January this year, EHang and Qintang District of Guigang City, Guangxi Province, held a signing ceremony for cooperation in urban intelligent air traffic and tourism projects. According to reports, the total investment of the project is 300 million yuan, and it is planned to build a smart city air traffic system and smart air tourism products in Qintang District, provide air patrol services for smart city management, and improve emergency response capabilities.
French Flying Whales offers another design idea in the freight section – mobile hospitals. Flying Whales' large aircraft can carry 60 tons of payloads over long distances, allowing them to "deliver" medical care using high-capacity aircraft in islands or remote areas. For example, stop in an area for two weeks, the staff takes care of all the people who need help, and then the mobile hospital is taken to another place, and it will stay for two weeks again, going back and forth, and it can provide people in remote areas with the same medical care as in big cities.
Flying Whales aircraft
Scenario application parties, aircraft research and development companies, and governments are all promoting the development of low-altitude economy from different aspects, but whether it is airworthiness certification or commercial operation, it is actually a long process.
Airbus CEO Fu Li also said at the 2022 annual press conference that he has worked in the helicopter department for a long time and looks forward to more vertical take-off and landing flights. But eVTOL still has a lot of work to do before it can generate revenue and profits, such as in terms of technology, airworthiness certification, and regulatory restrictions on operations, and its commercial operations are likely to need to be in the second half of 2020s. He also judged that there are many eVTOL companies at present, but it will eventually enter the market for a small number.
Such a long research and development cycle, in order to be able to quickly advance the commercialization progress, the Dutch PAL-V chose to design the product to be multi-functional, both running on the ground and flying in the sky. Last year, PAL-V Liberty passed a strict European road access test and can now be hung up on the road with an official license plate. According to the official website, the executive version costs $750,000 and the sports version costs $499,000.
PAL-V official website price
epilogue
Overall, the industry as a whole is still in the process of waiting for airworthiness certification, but we can also see that when policy regulation really begins to consider the revolutionary progress of technology, perhaps the development of the low-altitude economy will be faster. For example, Sichuan first carried out the reform of low-altitude airspace collaborative management in 2017, and the three provinces of Hunan, Jiangxi and Anhui were also approved for the pilot of all-domain low-altitude flight.
But from research and development to real commercialization of a new technology, it is necessary to consider the performance, economy and reliability of the product. Economist Fan Hengshan believes that the rapid development of the low-altitude economy mainly lies in the five core elements of "market, airspace, policy, technology and security".
The low-altitude economy has a long way to go. (This article was first published on Titanium Media App, author/Han Jingxian, editor/Zhang Min)