After the successful investment in EHang, the interest of the veteran low-altitude economic investor shifted to a new direction
Interview | Wang Jingyi
Text | Wang Yating
Edit | Wang Jingyi
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The low-altitude economy is giving birth to a trillion-dollar industry.
According to statistics from Oriental Wealth Choice, since February 2024, at least 38 low-altitude economic concept stocks in A-shares have risen by more than 30%. Drones are one of the most popular ones.
Every breakthrough new thing will face a lot of controversy and doubts at the beginning. Conservative people think it's a no-brainer, but the turning point often comes in these seemingly impossible moments.
As an angel investor of EHang, Li Jianwei was not understood by the industry when he recommended EHang in 2014, and many of his peers at that time thought that flying cars were a fantasy.
Looking back ten years later, EHang has completed a beautiful turnaround. Only 5 years of listing on the NASDAQ in the United States, repeatedly experienced ups and downs but persevered in the face of difficulties, until the Civil Aviation Administration of China's open attitude and policy regulation played a key role in the development of the UAV industry, and is now the world's first collection of unmanned eVTOL airworthiness certification three certificates of enterprise, with a first-mover advantage in the industry.
Whether it's sightseeing in the city or intercity public transportation, EHang's "flying car" has achieved a breakthrough in the field of passenger transportation. The concept of low-altitude economy is extensive, new subdivision tracks are being opened, and there are more opportunities to be explored.
Li Jianwei stepped out of the EVTOL sector after EHang's IPO and has now shifted his investment interest to new directions: large cargo drones and consumer-grade FPV (first-person view) racing drones.
First of all, freight. According to the forecast of the Shenzhen UAV Industry Association, the UAV market will reach 160 billion yuan by 2024, of which the UAV market size in express logistics is about 30 billion yuan. At a time when the field of cargo drones in Europe and the United States is still blank, China is likely to become the "only" at the forefront of this field.
Then there are consumer-grade products. Li Jianwei believes that the logic of a good product is simple: Volkswagen is easy to use, and can provide flexible configuration capabilities to achieve higher performance, and the price is right.
Who will be the next EHang to rise? Caijing further spoke with Li Jianwei, managing partner of Zhencheng Investment.
Li Jianwei founded Zhencheng Investment in 2016, mainly investing in two areas: information technology and advanced manufacturing. He has led investments in EHang (NASDAQ: EH), Nine (SH: 689009), Huami Technology (NYSE: Zepp), Yuntian Lifei (SH: 688434), Tiger Brokers (NASDAQ: TIGR), and others.
The following is a conversation between Caijing and Li Jianwei.
01
Flying car driver battles
Caijing: In 2014, you recommended investing in EHang, how did you first focus on flying cars?
Li Jianwei: Initially, I focused on DJI, and then gradually turned my attention to other categories of drones.
I met the core team of the American Taili Speed Car (which was later acquired by Geely) and had a preliminary impression of the flying car, but the Taili Speed model needed a runway, a folding fixed wing, and someone needed to drive it. However, in the environment of urban air mobility, without runway resources, drivers will also bring huge safety risks, and this product feels difficult to popularize.
Source/Zhencheng Investment
After many exchanges, my reasonable product definition of a flying car slowly settled: a flying car should be vertical take-off and landing, autonomous driving, and the whole process should be controlled by the central government, and there should be no driver involved. After meeting EHang's R&D team in Guangzhou, I was pleasantly surprised to find that everyone had the same ideas.
Caijing: Why do you firmly believe that flying cars should not have a driver?
Li Jianwei: The key to unmanned systems or flying cars lies in unified scheduling and autonomous driving.
Whether or not a flying car has a driver has been controversial in the industry. One view is that from the psychological point of view of passengers, they need to have a driver with whom they share the risk. However, if someone manipulates it in a high-density urban air traffic environment, it will bring a huge hidden danger to public safety, which is unacceptable for urban governance.
On the other hand, there is the problem of economy, the number of people carried by flying cars is 2-6 people, and one more pilot, the cost increases, and the number of passengers is reduced, and the economy will be far behind.
In this way, the American Taili Flying Car and the German Volocopter are more like transitional products, and the economic model will be much better than the fully unmanned EHang.
In terms of manned flight, I currently think there are two main application scenarios.
The first one is a sightseeing tour within the city. A tourist attraction can purchase several aircraft to provide sightseeing services, in fact, this operation model is similar to the amusement program of the scenic spot, but with one more flight experience program.
The second is rapid transit within and between cities. For example, the flight from the city center to the airport can turn the original 1 hour journey into more than 10 minutes; From Zhuhai to Shenzhen through drones to achieve direct access, can turn the original two or three hours of driving into 20 minutes.
Caijing: Is manned travel a replacement for helicopters in the stock market, or an expansion of the incremental market?
Li Jianwei: In the past, most of the attractions could not use helicopters due to conditions. The helicopter itself and its operation and maintenance are very expensive.
In contrast, EHang's aircraft have a lower cost and low operating expenses, and only need to operate on the ground, connect to air traffic control and apply for routes, which can provide operators with a new source of revenue without too much investment.
Source/Zhencheng Investment
Such a change is not simply to replace helicopter tourism, but to expand the market at least several times. While the use of helicopters was limited by noise and cost, EHang's aircraft can operate in more places where it would have been difficult for helicopters to take off and land. According to reports, EHang's orders are now scheduled until 2025.
As for the future development, I think the city will be relatively cautious. Manned vehicles need to first conduct full test flights in places with low population density such as scenic spots to ensure safety, and then gradually expand to normal operation in the city center after the flight records are verified and the public is accustomed to it, and large-scale operation may take until about 2028. But in the next two or three years, we might see some small pilot projects.
02
Large cargo drones
Could be the next star product
Caijing: There is a lot of interest in flying cars right now, but your interest has shifted to cargo drones and invested in the Beluga route, why?
Li Jianwei: Compared to flying cars, which focus on air mobility within cities, the market for unmanned cargo aircraft is larger. After all, there are limited flight lines in the city, and it's hard to imagine that the air can become as busy as ground traffic. But freighters are different, they are an indispensable part of daily transportation, replacing manned vehicles with unmanned ones, and the cost per ton-kilometer will be reduced by 60%, which will achieve a better economic model and have great potential for development.
We see the opportunity for cargo drones to be the next hot spot in the low-altitude economy, and in this area, we have invested in Beluga routes, and they are doing the world's largest cargo drones. The main model of the Beluga whale, the W5000, has a take-off weight of 10.8 tons, a load of 5 tons, and a maximum range of 2,600 kilometers.
Source/Zhencheng Investment
The aircraft will roll off the assembly line at the end of the year and make its first flight in the first half of next year. On the financing side, the company has also made rapid progress, and has received more than 100 million rounds of financing in the past year. If all goes well, the Beluga has a chance to become the main aircraft of air cargo in the future.
Caijing: What do you think the size of the drone cargo aircraft market can reach in the future?
Li Jianwei: In my opinion, it is possible to have thousands of aircraft in the world. As an important part of the logistics system, cargo aircraft are in great demand, whether they are civilian or military.
In some special areas, such as Xinjiang and the islands and reefs of the South China Sea, unmanned cargo aircraft can play a huge role. It turns out that Xinjiang's supply may have to rely on trains, which are relatively slow, and with unmanned cargo planes that can carry 5 tons of cargo, the front-line layout becomes very fast.
Let's talk about the comparison between unmanned cargo planes and manned cargo planes. The cost of a manned cargo plane is quite high, including fuel consumption, maintenance, etc., and there are more than 20 sets of subsystems in order to maintain the survival of personnel. The unmanned cargo plane, because there is no need to consider the survival of personnel, so the subsystem is reduced to 13 sets, as long as the air link and communication are no problem, it can continue to fly, and the attendance rate and use efficiency are greatly improved.
Source/Zhencheng Investment
This kind of drone large-scale cargo market, which may not seem so "sexy", actually has extremely high certainty and potential.
Currently, the cargo aviation market relies heavily on converted freighters from passenger aircraft, but this model has limitations in terms of efficiency and cost. At the technical level, the application of multi-rotor aircraft in the cargo field may be limited to a certain extent, because its technical threshold is relatively low and the market competition is fierce.
In the future, unmanned, automated and intelligent large fixed-wing cargo aircraft will be the development trend. Through close integration with general aviation airports, these freighters will enable efficient and safe point-to-point flights, bringing revolutionary changes to the logistics industry. At the same time, this will also effectively avoid the shortage of take-off and landing resources at large city airports.
03
Really good products, the logic is very simple
Caijing: The emergence of flying cars has subverted the imagination of ordinary people, will there be more such products or companies in the future?
Jianwei Lee: As technology continues to improve, we will see more products that have never been seen before. For example, flying cars have already begun to land, and although they are still in their infancy, they may evolve into more beautiful and efficient forms in the future. In addition, I am very much looking forward to seeing more companies like DJI continue to push the innovation and application of drone technology.
Source/Star World
In the field of FPV toy drones, I feel that there is an opportunity to redefine the basic product, and there will be a product similar to the level of 4WD at that time. We have invested in Xingqi World, which focuses on making FPV toy airplanes. They hope to make high-quality toy FPV drones, and they have made rapid progress in products in the past two years.
Caijing: What is the difference between this toy drone and DJI's consumer drone?
Li Jianwei: DJI's drone is mainly used for aerial photography, the price is relatively high, with GPS, mainly used outdoors, you can understand that this is a flying camera. The FPV drone of Xingqi World, without GPS, is mainly used indoors, and mainly allows users to control the drone through a first-person perspective. You can think of this kind of aircraft as a flying 4x4.
Xingqi World's current high-end models are selling well, and this year it is also expected to launch models with a price of less than 900 yuan to enrich the product line. In addition, they helped organize the Ministry of Education's National Youth Drone Competition, as well as a monthly commercial competition, which received a strong response.
Stargazer Toy Crossing Machine
Source/Star World
When we invested in Xingqi World in 21 years, we encountered many difficulties. At that time, the toy drone industry was not originally productized, it was very fragmented and primitive, and it was mainly involved by some geeks.
Xingqi World has spent 2 years redefining toy drone products, using independent and controllable chips, redefining battery standards, and completely rewriting flight control algorithms. New products are very popular after they are introduced, and they are often out of stock.
The logic of a good product is simple: Volkswagen is easy to use, but it can provide flexible configuration capabilities to achieve higher performance at the right price.
04
Stock prices are fluctuating, but the underlying drivers are moving forward
Caijing: Zhencheng Investment has laid out several companies in the field of low-altitude economy, what are the criteria for investing in related enterprises?
Li Jianwei: Enterprises are at different stages, and the judgment criteria are also different. It is easy to make judgments when the enterprise has revenue and profits, but for projects with income but no profits, or even very meager income, it is necessary to add the analysis of the technical route and the prediction of the future market trend.
In emerging frontier fields, the most important criterion is the product, and we pay more attention to the definition of the product and the clarity of the business model. A successful product must not only have a unique selling point, but also have a sustainable business model that can bring stable revenue to the company.
Of course, it is also important to have a good start-up team behind it. Team members should have deep technical accumulation, passion for the industry, and a reasonable mix of members. It is not only sufficient technical strength, but also a requirement for market keen insight and rapid response ability.
Caijing: The concept of "low-altitude economy" has expanded from point to surface, from plane to three-dimensional, what do you think is the connotation of low-altitude economy that has not been mentioned?
Li Jianwei: Different airspace heights correspond to different product forms, high-altitude is mainly fixed-wing cargo aircraft, while low-altitude covers many small aircraft and drones. For example, in airspace below two kilometers, small passenger aircraft (including evtol) and sport aircraft are common. Although fields such as sports aircraft do not seem to have caught up with the current technology boom, there are still companies such as Sunward that have made considerable progress in the field of small sports aircraft.
来源/IC PHOTO
In the low-altitude economy, trunk logistics is undoubtedly an important part of it. It involves the transportation of a large number of goods, and the demand for unmanned cargo aircraft is also the most urgent; Manned evtol is the current outlet, which is expected to develop rapidly in a few years; Intercity logistics and intracity logistics are also important sectors in the low-altitude economy. Further down are consumer-grade aerial photography drones, and finally indoor FPV toy drones. Each of them has unique needs and market prospects, which together constitute a diversified development pattern of the low-altitude economy.
Caijing: Returning to the present, what can we be more clear about, such as whether there will be another wave of financing this year?
Li Jianwei: In my opinion, this year's drone industry is indeed full of opportunities and challenges. Although the fluctuation of secondary stock prices is concerning, as investors in the primary market, we pay more attention to the underlying driving force of the development of the industry. It's a very clear trend that this driving force is driving the industry forward.
In the field of consumer-grade aerial photography drones, DJI continues to dominate the dust, achieving more than 80% of the global market share; The indoor toy FPV drone market has the opportunity to grow rapidly in the coming years. Industrial-grade drones will penetrate deeper into various industries.
来源/IC PHOTO
With the advancement of technology and the maturity of the market, more and more drone routes carrying people and logistics will be opened, thus covering more cities. In addition, drone logistics in cities is also developing rapidly.
At the same time, the number of enterprises applying for type certificate (TC) is increasing this year, and the approval time is gradually shortening. This means that by 25/26, more and more companies are expected to enter this market with TC certification, which is good news for the industry as a whole.
As for the final form of the manned product, I think it needs to be determined according to market demand and technological development. But in any case, safety, safety, comfort and cost-effectiveness are all key factors that we must consider. Only when these three requirements are met can the product be successful in the market.