定焦(dingjiaoone)原创
Author | dawn
Edit | Wei Jia
The low-altitude economy is on fire, and all parts of the country are busy.
Since the end of last year, the Central Economic Work Conference listed the low-altitude economy as a strategic emerging industry, and at least 29 provinces and municipalities have written this word into the government work report.
This is another round of competition between cities after real estate and new energy vehicles.
An industry insider who helped a local government to attract investment told "Dingjiao" that since the beginning of this year, the enthusiasm for the low-altitude economy has been very high, and although the landing is very cautious, the research is very frequent.
Officials in charge of attracting investment in some cities are on the move. A CEO who started a business in Beijing told Dingjiao that the deputy director of the China Merchants Bureau of a foreign city will come to visit him in the near future to consult about the application scenarios of the low-altitude economy.
The so-called "low-altitude economy" refers to the economic form of flight activities below the altitude of 3,000 meters, drones, air cars, various aircraft, plus supporting commercial operations, comprehensive support, infrastructure construction, etc., forming a huge industrial chain. The flying car, which was hotly discussed a while ago, belongs to one of them.
Local governments have ample incentives to participate in this race, not only in response to policies, but also for the sake of stimulating the local economy and promoting employment.
In the past, our development was more dependent on the land, and in the future, the increment may come from the sky.
To the sky to develop
The low-altitude economy is not a new concept, but its rise to strategic heights is new.
Like the land, the sky is a resource. The three-dimensional sky is one dimension more than the two-dimensional ground, and it can be expanded horizontally and vertically. For example, in the longitudinal direction, it can be divided into different airspaces according to the height, among which the low altitude below 3000 meters is the focus of the industry.
Compared with the land, the sky is more controlled, and there is a saying in the industry that "three meters above the ground belongs to the army", and civilian low-altitude flights must be applied for in advance. In the past few years, the policy has been relaxed, and the sky resources have been more developed. One intuitive change is that there are more aerial sightseeing, private flights and even drone delivery.
There is a lot of business that can be done at low altitudes, and flying cars tell the story of "air taxis", and if this story can be established, a "Didi in the air" will inevitably be born. It's a whole new realm of rebuilding order from zero to one.
The R&D and production of eVTOL (electric vertical take-off and landing aircraft, also known as flying cars) is an indispensable part of the development of the low-altitude economy, and it is also a hot spot for capital in the past two years. (Further reading: The Fiction and Reality of "Flying Cars")
In the first half of this year, Shanghai-based eVTOL company Volant received three consecutive rounds of financing, each of which amounted to 100 million yuan. Shanghai company Shi Technology received $20 million in Series A financing, funded by overseas investment institutions. Changsha's Huayu Xianxiang received an angel round of financing with an amount of tens of millions of yuan.
Photo source / Volant official website
Flying cars are just the tip of the iceberg in the trillion-dollar market.
As the saying goes, to get rich, build roads first. Before the car is on the road, it is necessary to build roads, build gas stations, and open 4S stores. eVTOL follows the same rule, with infrastructure in place before mass production, a complete set of roads in the air, take-off and landing points in hardware, and communications, navigation, and data management in software. It's going to be a huge industrial chain.
Liu Yong, founder and CEO of Deop, which provides one-stop supply chain solutions, said to "Fixed Focus" that generally speaking, the value of traditional civil aviation aircraft itself only accounts for about 20% of the comprehensive output value, and the additional industries on the operation side such as fuel consumption, maintenance, ground handling services, and airport construction driven by aircraft can produce great economic benefits in the entire product life cycle (20 years for general civil aircraft).
Throughout the industrial history of the mainland, after real estate, the Internet, and new energy vehicles, it is difficult to find an emerging industry with a long and deep industrial chain and a large enough output value. The low-altitude economy fills this gap.
When it comes to infrastructure, local governments are inseparable. From a ground point of view, infrastructure construction such as take-off and landing fields requires land and financial support, and must be approved by relevant departments; From a sky perspective, airspace applications, route planning, and route management involve different departments and need to be operated under supervision.
For some local governments, this is a new opportunity.
There are a large number of cities in China eager to transform, the traditional old industrial bases, various "mining capitals" for mining and selling, and some large cities that rely on land finance, are in urgent need of new industries to carry the transformation. A central city directly played the slogan: "Not by the sea, not along the border, to the world by the blue sky." ”
Zigong City, Sichuan Province is typical. It is an old industrial city, known as the "thousand-year-old salt capital", and has been fully transformed in recent years, from "making salt" to "making aircraft", and has become one of the civil unmanned aviation test areas. In this round of low-altitude economic boom, it is very active.
When enterprises are introduced, projects are brought down, output value is up, and industries are flying, the local economy will have a new engine.
Liu Yong believes that the local government calculates the overall account, rather than the economic gains and losses of individual projects, and employment, tax payment, industrial upgrading and industrial chain ecological localization are all points that the government considers. "This is something that only the government can do, because the low-altitude economy has a long investment cycle, and the government can evaluate the overall long-term benefits."
Start by grabbing the project
The battle for projects between cities has begun, and many practitioners feel that Shenzhen and Hefei are the most positive.
Liu Yong told "Fixed Focus" that although Shenzhen is the "capital of drones", there is currently a lack of eVTOL head companies, and domestic eVTOL head companies are mainly distributed in Guangzhou, Shanghai, Chengdu and other cities.
In June last year, Shenzhen Bao'an District announced the introduction of German eVTOL company Lilium, and recently the two sides signed a cooperation agreement to set up Lilium's Asia-Pacific headquarters in Bao'an.
The month after the introduction of Lilium, Bao'an District announced that it had reached a cooperation agreement with EHang and Fengfei Airlines. EHang will place the EH216-S assembly and delivery center, R&D and testing center, and maintenance support center in Bao'an. The cooperation between Fengfei Airlines and Bao'an is more operational, and in February this year, the route from Shenzhen to Zhuhai was opened and the first flight was completed.
The above three enterprises are all star enterprises in the field of low-altitude economy, and if they are "wooed", Shenzhen has a typical case that can be used. EHang is headquartered in Guangzhou, Fengfei Aviation is headquartered in Shanghai, and Lilium is a foreign-funded enterprise, so it is a test of the local government's strategy and bargaining chips to "get" them.
Taking Fengfei Airlines' cross-sea flight from Shenzhen to Zhuhai as an example, the difficulty actually lies in the opening of routes and the coordination of various departments. The 20-minute flight involves air traffic operations management, air traffic infrastructure providers and service providers, government administrations, and airspace management departments...... Shenzhen's ability to drive the implementation of the plan and take the risks is a testament to its strong ability to mobilize resources and take action.
Lilium's Asia-Pacific headquarters in Shenzhen is related to another Shenzhen-based company, Tencent. Tencent invested in Lilium, becoming its largest single shareholder along the way. Before and after Bao'an District and Lilium reached a cooperation last year, Tencent invested another $175 million in Lilium.
Image source / Lilium official website
Shenzhen's "grabbing the project" is fast and accurate, and it can match Hefei as well.
Hefei has always been known for attracting investment and is known as "the most risky city in China". The story of Hefei's introduction of BOE factories and NIO headquarters from other places is a good story in the industry. Nowadays, the general trend of the industry extends from new energy vehicles to low-altitude economy, and Hefei is not absent.
The most typical example is EHang's East China regional headquarters in Hefei.
On October 13 last year, EHang's EH216 obtained the TC certificate (Type Certificate) issued by the Civil Aviation Administration. This event is of great significance, flying cars must obtain airworthiness certification before they can be put into commercial operation, especially the TC certificate is the most difficult to obtain, EHang was the first eVTOL company in the world to obtain TC certificate at that time.
Two days after the evidence was collected, the main leaders of the Hefei Municipal Party Committee met with Hu Huazhi, the founder of EHang. On the sixth day of the evidence, EHang announced that it had reached a cooperation with the Hefei Municipal Government, and the East China headquarters would be settled in Hefei, and the production, sales and operation in East China would be centered on Hefei.
EHang is a Guangzhou enterprise and wants to set up its headquarters in East China, Shanghai, Hangzhou, and Nanjing are all alternative cities, especially Shanghai, which has a stronger comprehensive strength than Hefei, but in the end, Hefei has taken the lead. Hefei has offered favorable conditions for this, promising procurement and special subsidies worth a total of 100 million US dollars.
Two months later, the EH216-S conducted its first commercial manned flight demonstration after receiving the TC certificate at Luogang Central Park in Hefei. For Hefei, although the activity does not produce direct economic benefits, the publicity effect is full.
In addition to EHang, Hefei also wants to attract Shanghai's technology. More than a year ago, Hefei began to keep up with the current technology to discuss how to make the E20 eVTOL project, the first tiltrotor electric aircraft independently developed by the mainland, land in Hefei.
However, the cooperation has not progressed much, and the E20 eVTOL was originally planned to make its world premiere flight at Hefei Bailong Airport, settle down and start production in Anhui, and finally the actual test flight will be at Hengdian General Airport in Zhejiang.
At present, the competition for the head eVTOL companies in major cities is still in full swing. Although the company often has only one headquarters, it can also set up regional headquarters, R&D centers, manufacturing centers, assembly centers, operation bases, etc. This provides an opportunity for some cities that do not have local eVTOL companies to "make up their tickets".
Investment, joint venture, investment
In order to develop the low-altitude economy, various promotion policies are being introduced in various places. Common ways to support enterprises include land grants, subsidies, tax exemptions, incentives, and licenses, and give the green light in all aspects.
Industry insiders told "Fixed Focus" that among the major cities, Shenzhen has the greatest support for enterprises, and it is really "making money". For example, the maximum reward for eVTOL enterprises to settle down is 20 million yuan, another 15 million yuan for passing the airworthiness certification of the Civil Aviation Administration, and 1 million yuan for opening and operating the first eVTOL commercial route in Shenzhen.
The policy direction is very clear, that is, to attract enterprises to settle in Shenzhen, and put routes and operations in Shenzhen.
For enterprises, these are after-the-fact subsidies, which are the icing on the cake. In order to form a deeper binding with enterprises, some local governments use investment to give money and resources.
In the first half of this year, two of the three financings completed by Volant were with the participation of local state-owned assets - the industrial fund in Zigong City, Sichuan Province, and the war investment in Nanshan District, Shenzhen. Hefei has also cultivated an eVTOL company in the local area, Zero Gravity, which completed a financing of nearly 100 million yuan last year, and the fund of Hefei State-owned Assets Supervision and Administration Commission participated in the investment.
Image source / Zero Gravity official website
Volant is a Shanghai enterprise, Zigong led the investment in March 100 million yuan A round of financing, after the two sides signed an agreement, Zigong in the form of equity investment, the introduction of Volant's intelligent manufacturing base project, the project is expected to have a total investment of 2 billion yuan, after the completion of the annual output value of about 7.5 billion yuan. Zigong said that in the future, the two sides will also deepen cooperation in capital investment, take-off and landing base construction, aircraft leasing and other aspects.
Shenzhen, Hefei, Zigong and other cities are one step ahead, and most cities are not until this year after the central government set the tone, began to "copy homework" to set up a low-altitude economic industry fund. For example, Chongqing, Anhui, Guangzhou, Wuhan, Guizhou, Shenyang, etc., have established funds ranging from 1 billion yuan to 20 billion yuan.
It is not difficult to set up a fund, but the difficulty is to discover good projects, use the fund to leverage more resources, and promote the upgrading of local industries.
Liu Yong said that the industrial funds set up by various provinces and cities play more of a guiding role, mobilizing the enthusiasm of social capital, and attracting resources to the field of low-altitude economy. At present, there are not many good projects in the market to develop truly competitive eVTOL products, and some projects lack the necessary technical support and commercialization capabilities.
According to Tianyancha data, Zigong and Shenzhen participated in the two financings of Volant, both of which are "1+3" structures - 1 local state-owned assets + 3 social capital.
An investor told Dingjiao that when many local governments attract investment, they will specify the purpose of the money after it is invested, such as building factories in the local area, buying equipment or hiring a large number of employees.
At the same time of investment, the local government will also take the lead in establishing joint ventures with enterprises, adding some local state-owned and social capital, and binding everyone's goals and interests to the joint venture company, so as to facilitate the later operation. For example, EHang has established joint ventures with Guangzhou, Hefei and Shenzhen, and Volant and Zigong.
Among these cities striving to be the "city in the sky", Shenzhen is currently recognized as the "first city of low-altitude economy" in the industry, Guangzhou, Shanghai, Hefei and Chengdu have certain first-mover advantages, and Beijing, Chongqing, Hangzhou and Nanjing are developing rapidly.
To develop a low-altitude economy in a city, one looks at the industrial base, the second looks at the head enterprises, and the third looks at whether there is money. Shenzhen is strong in all three aspects. According to the "Research Report on China's Low-altitude Economic Development (2024)", in 2023, the top three cities in the country in terms of the number of low-altitude economic enterprises are Shenzhen, Guangzhou, and Beijing.
As early as the 2023 government work report, Shenzhen mentioned the development of a low-altitude economy. This year, Shenzhen took advantage of its status as a special zone to introduce the country's first low-altitude economic legislation within the scope of local authority, further removing institutional obstacles.
With policy encouragement and local support, the low-altitude economy seems to be about to take off. But to see results, it won't be so fast.
Slow business that requires patience
The largest product of real estate is commercial housing, new energy vehicles instead of fuel vehicles, they have a clear market and buyers. In order for the low-altitude economy to really land, it is necessary to find specific application scenarios, otherwise it will not be possible to form a market.
The ideal form is that a large number of low-altitude aircraft fly in the air, partially replacing ground transportation, short-distance aviation, island transportation, logistics and distribution, shared travel, scenic sightseeing, and various scenarios can use aircraft as vehicles. Obviously, this is not realistic in the short term.
We can refer to the development of autonomous driving.
A few years ago, when autonomous driving was hot, many cities applied for autonomous driving test areas, and spent real money to attract investment, build roads and factories, and test operations, competing for the "first city of autonomous driving". To this day, unmanned taxis are still not popular, and related companies continue to lose money.
The only ones that make money from it are those companies that do "intelligent transportation", which take projects from local governments to package the overall scheme of urban vehicle-road cooperative road infrastructure construction and autonomous driving public service fleet operation into the new infrastructure of city-level intelligent transportation. Businesses earn budgets for local infrastructure, and governments get the label of "smart cities."
In today's low-altitude economy, it is more difficult to land than autonomous driving, and the support and assistance of the government are also indispensable.
Liu Yong told "Fixed Focus" that at present, almost all eVTOL companies around the world are in a loss-making state, the industry is still in its early stages, the R&D investment is huge, the application for airworthiness certification is expensive, and the vast majority of companies have not yet begun to commercialize, and the concept of "making money" should be at least ten years later.
EHang is the first listed eVTOL company in China, and its EH216-S has obtained a production license, and it is the first to be mass-produced and commercialized, and most of the orders come from government procurement.
Photo source / EHang official website
The Wuxi municipal government in Jiangsu Province placed an intent purchase order for 100 EH216-S with EHang this year, and EHang delivered 10 EHang in the first quarter. Xishan Cultural Tourism in Taiyuan, Shanxi Province, ordered 50 EH216-S in May with a contract price of 113 million yuan, and plans to purchase an additional 450 aircraft in the next two years, which is EHang's largest order in China so far.
These eVTOLs will be mainly used for aerial tourism, which is now the "low-altitude cultural tourism" that the local government is keen on.
Last year, EHang said in its financial report that its customers were mainly scenic spot operators, express logistics companies, commercial real estate companies, and medical emergency companies. Now, there has been a noticeable increase in procurement from the government.
Among the local governments that have reached cooperation with EHang, the Shenzhen Bao'an District Government has said that it will provide all-round support for EHang's local product procurement, financial leasing and infrastructure construction. Shenzhen-based company Boling Group has established a joint venture with EHang to purchase five EH216-S from EHang and plans to purchase another 95 aircraft in the future. The cooperation agreement between Hefei and EHang includes "coordinating or facilitating purchase orders for no less than 100 EH216 series unmanned aerial vehicles".
Air tourism is now the most feasible application scenario of low-altitude economy. It is inseparable from the government's overall planning and solid financial support.
If ordinary tourists want to buy tickets to take a flight and experience aerial sightseeing in the city, they have to wait for various tests to pass and start normal operation. At that time, a new market was really launched.
Until then, applications in non-urban scenarios such as logistics and freight, medical emergencies, and island delivery may be the first to land. It's just that it's to B's business, which is relatively scattered and far away from ordinary people.
Liu Yong believes that this wave of low-altitude economic boom will inevitably go through a process of big waves and sand. While encouraging support, the government should also introduce competition and regulatory mechanisms to give full play to the enthusiasm and creativity of enterprises.
The automotive industry will be able to see results in 3 to 5 years, while the aviation industry will take more than 10 years. The low-altitude economy is just getting started, and it's a long-term thing that requires vision, courage and patience.
*Image from Unsplash.