The eastern Chinese city of Hefei yesterday pledged US$100 million in financial support to EHang (亿航, Nasdaq: EH), a leader in urban air mobility solutions, in a bid to develop urban air mobility (UAM) solutions in the city.
According to an agreement signed yesterday, the government of Hefei, capital of Anhui Province, will provide all kinds of support totaling US$100 million to EHang.
This included helping to coordinate or facilitate purchase orders for no less than 100 units of EHang’s iconic EH216 unmanned aerial vehicle.
The specific timing, amount and type of support will be subject to additional definitive agreement, according to a press release from EHang.
What’s more, as part of the two parties’ efforts to jointly develop what is known as a “low-altitude economy ecosystem,” EHang will take part in a demonstration project undertaken by Hefei, to launch regular operations of its UAVs in Luogang Central Park in Hefei.
This park is set to become the world’s premier UAM super aerohub.
Additionally, Hefei will also help to expand the application of and collaboration over EHang’s UAV in cultural tourism, emergency and rescue, logistics, firefighting and other scenarios related to a “low altitude economy.”
For this purpose, the burgeoning city promised to provide the land, infrastructure, and specialized subsidies to support its operation within the city.
In return, EHang intends to set up its regional headquarters for Eastern China in Hefei to promote UAV production, sales and operation and expedite the arrival of UAM solutions in the area.
EHang is getting winds in its sails of late. Just last week, its flagship model EH216-S crossed a milestone by obtaining the world’s first type certificate for an eVTOL aircraft from the Civil Aviation Administration of China.
“Hefei not only comprehends industrial development but also is committed to nurturing businesses on their growth,” said Yu Aihua, the Party chief of Hefei. “The partnership between Hefei and EHang will lead to synergies as they join forces to seize the opportunities in the emerging low-altitude economy.”
A ‘venture capital’ city
Hu Huazhi, founder, chairman and CEO of EHang, credited Hefei for consistently prioritizing the development of UAV technologies and promoting emerging tech startups.
The city has gained renown over the years as a hub of major tech corporations like AI heavyweight iFlytek (科大讯飞) and EV battery giant Gotion High-Tech (国轩高科).
Of all the accolades that came its way, the city is best known for its brand of government-backed venture capital.
The city directed its state-run venture funds to pour 11.26 billion yuan (US$1.54 billion) into once beleaguered NIO (蔚来) in early 2020, when the company’s shares were slumping, putting it under threat of being delisted from NYSE.
These venture firms later profited enormously from the investment after the EV maker turned things around.
Hefei has since become a magnet to companies in emerging sectors, thanks to its daring vote of confidence in incipient segments which it believes represent the future — eVTOL included.
“In collaboration with the Hefei Municipal Government, we are committed to advancing safe, autonomous, and eco-friendly UAM solutions in Hefei as well as expanding commercial operations with the EH216-S to more cities,” Hu of EHang said.