Takeoff of China’s flying taxis hits turbulence

In the skies above Guangzhou, an oval-shaped aircraft from flying taxi manufacturer EHang hovers with a whirring noise reminiscent of a miniature helicopter. This unmanned vehicle, being tested over a riverside innovation zone, represents China’s ambitious push into what officials call the “low-altitude economy” – a sector that once seemed confined to science fiction.

The technology is already making inroads into everyday life. In nearby Shenzhen, food-delivery drones have become both a practical service and tourist attraction. Polish visitor Karolina Trzciańska recently ordered bubble tea via smartphone, which arrived by drone approximately 30 minutes later despite light rain. “This is the first time I’m seeing something like this, so it was super fun,” she said.

China’s low-altitude economy – encompassing activities in airspace below 1,000 meters – generated business worth 506 billion yuan ($70 billion) in 2023, accounting for about 0.4% of China’s overall economy. Zhang Xiaolan, a researcher at the State Information Center, a government-affiliated think tank, projects this figure will surge to 3.5 trillion yuan (approximately $490 billion) by 2035.

Guangdong province, home to global drone giant DJI, is leading China’s aerial revolution. DJI currently commands an estimated 70% of the global commercial drone market. The province also hosts other major players including EHang, logistics company SF Express’s drone division Phoenix Wings, and automaker XPENG’s flying car unit ARIDGE.

Local governments are providing substantial support. Guangdong announced plans in October to accelerate the construction of flight service stations and platforms while backing discount vouchers for low-altitude tourism. Shenzhen has launched a 15-million-yuan ($2.1 million) incentive program for companies that secure passenger eVTOL (electric vertical take-off and landing) vehicle certifications.

EHang has already obtained regulatory approval from China’s Civil Aviation Administration to offer commercial passenger services with its pilotless eVTOL, which can reach speeds of 130 kph (81 mph) with a maximum range of 30 kilometers (19 miles). While commercial routes haven’t launched yet, EHang vice president He Tianxing said the company aims to begin with aerial sightseeing services. Over the past two years, EHang has constructed takeoff and landing sites in 20 Chinese cities.

“It can’t just be a research product, nor an engineer’s toy,” He said, envisioning future citywide networks utilizing rooftops of malls, schools, and parks as terminals.

However, significant technical challenges remain. Guo Liming, co-founder of Shenzhen-based Skyevtol, identified battery limitations as the primary obstacle for eVTOL development. The company’s single-seat manned eVTOL aircraft, priced around $100,000, can only fly 20 to 30 minutes before requiring recharging.

Safety concerns have also emerged. In September, two XPENG eVTOL aircraft collided after a rehearsal for an exhibition, with one catching fire while landing. Though no injuries were reported, a subsequent expo canceled flying demonstrations.

Nevertheless, XPENG continues developing its flying car technology, including a six-wheeled ground vehicle with a detachable eVTOL aircraft. Having invested over $600 million, the company claims more than 7,000 global orders for its “Land Aircraft Carrier” and has begun preparing for mass production. XPENG plans trial sightseeing flights in Dunhuang, a popular Silk Road tourist destination, for July 2025.

The timeline for regular commercial passenger service remains unclear. Some international companies have struggled financially before reaching commercial launch. In Germany, air taxi makers Lilium and Volocopter filed for bankruptcy, though Volocopter was subsequently acquired by Diamond Aircraft Group, a subsidiary of a Chinese firm.

Despite China’s leadership in drone technology and manufacturing, policy constraints—particularly limited airspace access—present significant barriers. Frank Zhou, managing director at GBA Low Altitude Technology Co., suggested that “overseas markets are more promising” for many applications. “Perhaps for some Southeast Asian countries, if I introduce these applications to them, their demand could explode,” he noted.

Less than one-third of China’s low-altitude airspace was accessible for general aviation use in 2023. The number of registered general aviation aerodromes in China, excluding private airports, is approximately one-tenth of those in the United States.

Chinese authorities are gradually addressing these limitations. The military, which controls most Chinese airspace, has pledged to simplify approval procedures in Shenzhen and five other provinces. Proposed revisions to civil aviation law include provisions for low-altitude airspace allocation and supervision.

Gary Ng, senior economist at Natixis Corporate and Investment Banking, expects meaningful commercialization around 2030, with passenger-carrying eVTOLs for tourism and industrial purposes preceding widespread flying taxi services.

“China is a latecomer to the industry but now leads in developing small drones and low-altitude airspace investments,” said Chen Wen-hua, director at the Hong Kong Polytechnic University’s Research Centre for Low Altitude Economy. While optimistic about the sector’s future, Chen cautioned that “the road leading to that bright future might be treacherous.”