Self-Flying Vehicle Specialist EHang Hits Earnings Turbulence
EHang Holdings Ltd., a Chinese startup hoping to revolutionize aerial transportation with its self-flying vehicles, reported widening losses and plummeting revenues in the second quarter amid sluggish demand for its products as it aims to become a service platform operator rather just a seller.
In the three months through June, the New York-listed company’s net loss swelled to 74.6 million yuan ($11.6 million) from 19.7 million yuan a year ago, according to its unaudited earnings report published on Wednesday.
Its total revenue nosedived 65.9% year-on-year to 12.2 million yuan, which EHang largely blamed on a change in its development strategy, involving the company increasing its focus on operating air mobility platforms using its autonomous aerial vehicles.
In April, EHang Chairman Hu Huazhi announced a decision in a push to drive growth to treat the operation of its own air mobility platforms equally as importantly as selling its self-flying vehicles to third-party clients. In the same month, the company also unveiled plans to launch 100 air routes across China for its autonomous aerial vehicles.
Early signs of its inclination toward a platform-oriented business mode appeared more than a year ago, when EHang said that it would build a three-story “e-port” in the city of Hezhou in South China’s Guangxi Zhuang autonomous region. This would be a pilot commercial project under which its EHang 216 flagship autonomous aerial vehicles would take tourists for sightseeing trips.
The Hezhou push was followed by two announcements EHang made in December 2020 and January 2021 which involved trialing sightseeing projects using its passenger drones in the Guangdong province cities of Zhaoqing and Zhuhai.
During an earnings conference call with analysts and investors on Wednesday, EHang Chief Strategy Officer Edward Xu admitted the strategic adjustment “may lead to a potential decline in short-term sales revenues,” as reflected in the second-quarter financial report which showed that it sold only three EHang 216s from April to June, compared with 16 in the same period last year.
Xu also addressed the progress EHang has made in launching its drone-enabled services, saying the company has selected 15 locations for its self-run services, most of which are located in Guangdong and the Yangtze River Delta region. At the same time, EHang will also help its customers offer similar services in another 21 locations, Xu added.
In April, the Civil Aviation Administration of China established a working group to examine the airworthiness of the EHang 216, bringing the company a step closer to its commercialization dream. EHang touts the EHang 216, which can fly just 35 kilometers with a maximum payload on full charge, as key to its global urban air mobility project that focuses on tourism, passenger transport, aerial logistics and emergency rescue.
In May, Ehang expanded its product offerings with the launch of the VT-30, a new long-range battery-powered autonomous aerial vehicle designed for intercity travel. Featuring a cruising range of 300 kilometers, the VT-30 boasts a structure that allows both vertical and gliding takeoff and landing while satisfying the need for long-range transportation, the company said.
Contact reporter Ding Yi (email@example.com) and editor Flynn Murphy (firstname.lastname@example.org)
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