The accident has put China’s low-altitude aviation dream under new scrutiny just as eVTOL pioneer EHang is struggling to turn flight certificates into passengers and sales

image credit: Bamboo Works

Key Takeaways:

  • A high-profile light-aircraft crash in Beijing exposed safety concerns that could slow development of China’s low-altitude economy, including for eVTOL makers
  • EHang is China’s most advanced eVTOL company in terms of regulatory approvals, but weak deliveries and lack of ticketed flights show commercialization remains distant

China’s low-altitude economy has spent the last few years riding a wave of policy slogans, high-profile local-government plans and investor hopes that electric aircraft could become the next electric vehicle (EV) story. The resulting vision paints a space-age scene of small aircraft lifting off from rooftops, scenic spots and transport hubs, carrying passengers over congested roads below without the need for runways.

But a light aircraft crash into the tallest skyscraper in Beijing’s central business district has taken some of the tailwinds from that vision.

On June 26, the two-seat light sport aircraft hit Citic Tower, the 528-meter Beijing skyscraper also known as China Zun, killing the pilot and injuring 13 people on the ground. The aircraft was not an electric vertical takeoff and landing aircraft (eVTOL), and had no link to any eVTOL makers, including EHang Holdings Ltd. (NASDAQ:EH), the Guangzhou company that has become China’s most visible name in the sector.

But the location mattered for China’s nascent low-altitude economy, which is far less developed than the West’s. The crash occurred near restricted airspace and commercial flight paths. Reuters reported that some general-aviation operators halted scenic flights afterward while waiting for official guidance, and that a Hainan Airlines Airbus A330 had to adjust its descent after its path intersected with the smaller aircraft.

The accident showed how difficult China’s low-altitude push becomes when airspace control, route approval and emergency response are still works in progress for its relatively young aviation sector. Within the futuristic eVTOL space, that matters most for EHang because it is not merely selling a concept. Its EH216-S, a pilotless two-seat eVTOL, has obtained key approvals from China’s aviation regulator, the Civil Aviation Administration of China (CAAC), including a type certificate, production certificate and standard airworthiness certificate. Flight operators linked to the company have also received the country’s first air operator certificates from the CAAC for human-carrying eVTOL services.

Those approvals make EHang the closest thing China has to a public-market proxy for flying taxis. They also create a burden that most of the company’s rivals do not yet face. EHang must prove that a market for eVTOL services exists today, and can no longer simply sell investors on the latest round of low altitude economy policy support and infrastructure spending.

Lots of talk, few passengers

EHang’s latest financial report shows the size of that gap. In the first quarter, the company delivered only four EH216-series aircraft, down from 11 a year earlier and 61 in the previous quarter. Its revenue fell to just 25.7 million yuan ($3.7 million), while its net loss widened to 126.4 million yuan. Aerial media services, mainly drone light shows with no relationship to its core eVTOL business, contributed about 40% of quarterly revenue.

EHang’s passenger eVTOL business remains a work in progress. The company said it was still working with the CAAC and operating partners to meet additional operational and safety requirements before launching public ticketed flights. A Goldman Sachs summary carried by Sina Finance also said remote-pilot training approval remained one of the steps before commercial passenger service could begin.

That is the central tension in China’s low-altitude economy. Beijing has repeatedly promoted the sector as a future growth engine, and the CAAC has said the market could reach 3.5 trillion yuan by 2035. But vertiports, charging stations and flight-control platforms are far from complete. The EH216-S has a listed range of about 30 kilometers, making it more suitable for scenic loops and short hops between controlled sites than for mass urban commuting.

Many of EHang’s post-certification deliveries have gone to local government-backed platforms and state-linked tourism or transport operators. They do not yet prove that ordinary passengers will pay often enough to support large-scale aircraft production.

Thus, the Beijing crash landed on a business model already under pressure. BofA Securities double-downgraded EHang to "underperform" after the accident and cut its price target to $5.40, citing tighter regulatory risk and slower commercialization. It also lowered its 2030 China eVTOL sales forecast to about 2,900 units from 3,500. EHang shares closed at $5.59 on July 10, down about 58% this year and just above their 52-week low of $5.32.

Money keeps flying in

Yet the industry is hardly running low on financial fuel. China has deep supply chains in batteries, electric drives, automotive manufacturing and electronics, all of which will benefit if the industry takes off. Local governments that can benefit from eVTOLs to boost their local economies and easy traffic congestion are willing to provide funds as well.

That explains why the capital continues to flow. Low-altitude financing in the first half of 2026 exceeded 20 billion yuan, with eVTOL makers taking a large share, according to Chinese media reports. Much of the money now comes from state-linked funds, local-government platforms and strategic investors.

EHang’s rivals are using that money to play catch up. Volant Aerotech recently raised 1 billion yuan and is preparing for a possible Hong Kong IPO. XPeng AeroHT, the flying-car affiliate of EV maker XPeng, has reportedly also filed confidentially for a Hong Kong listing, backed by more than 7,000 orders, though most of those are likely intent orders. AeroFugia, linked to car giant Geely, is in the process of seeking a listing on the STAR Market in Shanghai.

Those companies aren’t engaged in an identical race. EHang is betting on a certified, pilotless, short-range aircraft for controlled passenger routes. XPeng AeroHT is leaning on consumer branding and auto-style manufacturing, while Volant and others are targeting larger piloted aircraft for longer trips. Pre-certification companies can still sell investors a future. EHang has passed that stage, and now has to turn its approvals into real revenue.

It’s trying to do that by widening its runway. It has conducted pilotless flights in Switzerland, passenger demonstrations in Mexico and sandbox tests in Hong Kong. It is developing the longer-range VT35, has formed a joint venture with Chang’an Auto to use auto-industry supply chains, and moved into smart unmanned boats.

The Beijing crash won’t end China’s low-altitude ambitions. But it may change priorities. Before flying taxis can become a business, China needs clearer airspace rules, reliable traffic management, trained operators, insurable risks and passengers willing to climb aboard.

That makes the second half of 2026 an important test. Several Chinese eVTOL makers are racing toward certification, financing or IPO milestones. EHang is trying to prove that being at the head of that group can still become a commercial advantage. That means the hardest part for EHang is no longer proving that its aircraft can fly, but rather that they can also help a real business to take flight as well.

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Benzinga Disclaimer: This article is from an unpaid external contributor. It does not represent Benzinga’s reporting and has not been edited for content or accuracy.