Is the next trillion‑dollar growth opportunity in the logistics industry really here?

This year, the topic of the low-altitude economy has become incredibly popular! For the first time, “low-altitude economy” was included in the Government Work Report, making it one of China’s key priorities for fostering emerging and future industries this year.

And in mid-March, a news story only served to add fuel to the fire: EHang’s EH216‑S, the world’s first domestically developed “air taxi” to receive airworthiness certification, was listed on Taobao. Reportedly, this “air taxi” can carry two passengers, features autonomous flight and vertical takeoff and landing, and requires no runway at all. At a price tag of 2.39 million yuan—roughly the cost of a top‑spec Porsche Panamera—it’s clear that, in the future, riding such a vehicle could finally spare you from traffic jams...

As a result, immediately after its shares were listed, the U.S.-listed Chinese tech company EHang Holdings saw its intraday share price surge as much as 30%.

As a result, many people are asking: is the next trillion-dollar growth opportunity really on the horizon?

▍The market size may far exceed expectations

According to the “Opinions on Deepening the Reform of Low-Altitude Airspace Management in China,” “low altitude” generally refers to airspace extending up to 1,000 meters below the vertical plane directly beneath it; depending on regional characteristics and actual needs, this limit may be extended to 4,000 meters. The “low-altitude economy” is an economic concept that leverages low-altitude airspace and is led by the general aviation industry, encompassing a wide range of sectors—including low-altitude flight, aviation tourism, regional passenger transport, general aviation services, and research and education. It is a comprehensive economic model characterized by strong spillover effects and a long industrial chain.

In simple terms, the low‑altitude economy is a comprehensive economic model driven by various manned and unmanned aerial vehicle operations at low altitudes, which in turn spurs the integrated development of related sectors. For example, helicopters, drones, and eVTOLs (electric vertical takeoff and landing aircraft) are all key enablers of the low‑altitude economy.

Recently, the Ministry of Industry and Information Technology, the Ministry of Science and Technology, the Ministry of Finance, and the Civil Aviation Administration of China jointly issued the “Implementation Plan for Innovative Applications of General Aviation Equipment (2024–2030).” The plan sets forth that by 2027, China will have significantly enhanced its capacity to supply general aviation equipment and its industrial innovation capabilities; a modernized foundational support system for general aviation will be largely in place; an efficient, integrated industrial ecosystem will begin to take shape; and the public‑service equipment system for general aviation will be substantially improved. Furthermore, new‑generation general aviation equipment—characterized by unmanned operation, electrification, and intelligent technologies—will achieve commercial deployment in areas such as urban air mobility, logistics delivery, and emergency rescue.

According to data released by the Civil Aviation Administration of China, the Chinese low‑altitude economy is projected to reach a market size of RMB 1.5 trillion by 2025 and could grow to RMB 3.5 trillion by 2035, with a compound annual growth rate of 8.8% over the decade. This represents a massive market poised to become a pillar of the national economy.

Morgan Stanley has also forecast that by 2050, the global flying-car market will reach US$9 trillion, with China’s potential market size accounting for US$2.1 trillion. And this is just the flying-car segment—only one component of the broader low-altitude economy.

In fact, China’s low‑altitude economy is already taking shape. Drones have become ubiquitous and widely familiar; Chinese‑made drones not only rank first worldwide but also outpace the second‑largest producer in both manufacturing capacity and cost efficiency. Today, Chinese drones have advanced to the point where they can carry passengers, fully opening the door to the low‑altitude economy.

On February 27, 2024, the world’s first low‑altitude air route made its inaugural flight in Shenzhen: a two‑ton, 400‑kilogram‑payload, all‑electric eVTOL five‑seat aircraft took off from Shenzhen Shekou Cruise Homeport and landed at Zhuhai Jiuzhou Bay Pier. This route serves an area with heavy everyday traffic; by taxi, the journey takes about three hours and costs 500–600 yuan, while taking a ferry costs only 140 yuan but still requires 1 to 1.5 hours. Now, with the introduction of direct aerial service, even at today’s technological level, fares can be kept at 200–300 yuan per passenger, and the trip takes just 20 minutes.

Meanwhile, EHang’s EH216‑S aircraft has already completed over 40,000 safe flights, making it the world’s first unmanned aerial vehicle certified for manned operations. At present, the cost per kilometer is roughly RMB 5–7, and the first commercial service is expected to launch in 2026.

However, this cost is based on non‑mass‑production conditions. According to Jiang Jun, CMO of Shi De Technology, the company estimates that if the aircraft enters mass production, passengers would pay roughly 2 yuan per kilometer for an air‑taxi ride—meaning a 90‑kilometer trip from Shanghai’s business district to a Suzhou attraction would cost only about 180 yuan.

Based on current feedback, manned low‑altitude aircraft could very well bring ticket prices down to roughly the same level as today’s ground‑based ride‑hailing services, effectively becoming a standard air taxi. These air taxis have evolved from drones but cost far less than helicopters. As such, this type of eVTOL is an aviation vehicle that ordinary people can afford.

▍Several companies are investing in flying cars

The concept of flying cars has long been closely linked to the low-altitude economy.

Some institutions predict that, driven by the combined effects of favorable policies and technological breakthroughs, 2024 could mark the inaugural year of the low-altitude economy. The eVTOL‑based aviation industry is booming, with numerous companies already unveiling their eVTOL prototypes and advancing into flight‑test phases and airworthiness certification.

On March 8, XPeng Huitian announced that its flying car, the “Traveler X2,” successfully completed a low-altitude flight between Tiande Plaza and the Canton Tower in Guangzhou’s central business district.

On the same day, GAC’s GOVE flying car also conducted a flight demonstration over Guangzhou’s CBD, marking the first-ever in‑flight validation in a complex, low‑altitude urban environment. According to reports, the GAC GOVE is a fully electric vertical takeoff and landing (eVTOL) aircraft independently developed by GAC Group. It currently has a maximum takeoff weight of 550 kg and a maximum range of 30 km, with more than 300 verification flights completed to date.

GAC Group stated that, according to its plan, the company will launch demonstration operations of flying cars in 2025 and, by 2027, will roll out end-to-end, three-dimensional smart mobility services—integrating multi‑modal stations, ground transportation, and air travel—in two to three cities within the Guangdong–Hong Kong–Macao Greater Bay Area.

Previously, successful flight tests of several eVTOL prototypes have brought the low-altitude economy one step closer to reality.

Kaiyuan Securities forecasts that, once eVTOLs achieve large-scale deployment, the per‑seat cost could fall to RMB 200–300, representing a 50% reduction compared with current taxi fares. This would significantly enhance their cost‑effectiveness and position them as a key mode of future transportation. With the emergence of viable use cases in the manned passenger‑transport market, the eVTOL sector is poised for accelerated growth.

Driven by policy support and technological advancements, the low-altitude economy is expanding rapidly. Given the eVTOL aircraft’s advantages—environmental friendliness, high cost-effectiveness, exceptional convenience, robust safety, and superior efficiency—and their suitability for rapid intercity transportation, the industry widely anticipates significant future growth potential.

▍Several core issues remain to be addressed

However, even with numerous favorable factors, this does not mean that the low‑altitude economy or flying cars will soon generate substantial market value. It is undeniable that, for automobiles to take to the skies, significant challenges remain—ranging from technological hurdles and regulatory frameworks to the development of supporting infrastructure.

Above all, safety remains the public’s primary concern. Compared with high-altitude airspace, the low‑altitude domain is far more complex. Some industry observers argue that achieving high speeds in this environment would be disastrous; therefore, only low‑speed, small unmanned aerial vehicles can be employed. Even if cost were no longer an issue, deploying such a vast number of these aircraft would still be necessary to generate sufficient transport capacity. Yet in low‑altitude airspace, the operational conditions are exponentially more challenging than at higher altitudes. Even the most skilled pilots would inevitably encounter accidents after prolonged exposure, leading to outcomes that would likewise be catastrophic.

As for low-altitude aircraft, the accident rate is essentially zero tolerance, because urban areas are densely packed with skyscrapers and bustling with people, making them utterly unable to withstand the consequences of even a single mishap. This places extremely stringent demands on both autonomous‑driving technology and central command‑and‑control systems.

Yang Shichun, Dean of the School of Traffic Science and Engineering at Beijing University of Aeronautics and Astronautics and a professor, stated that flying cars place three key demands on power batteries: high specific power, long service life, and high safety. First, during takeoff, the discharge rate can reach 4C (where C denotes the current capacity per hour), and during descent it can climb to 5C; cruise power typically stays below 1C, requiring more precise parameter estimation and tighter control over battery operating limits than conventional vehicles. Second, compared with electric vehicles, flying cars may undergo up to 1,600 charge–discharge cycles annually, imposing even higher performance requirements on the battery. Finally, in terms of thermal management, early warning systems must be in place to ensure safety.

Xiaopeng He, Chairman of XPeng Motors, stated bluntly that, in addition to the significant technical challenges of developing flying cars and the urgent need to break through several key technologies, the current general aviation operating framework is ill‑suited to meet the demands of large‑scale deployment of next‑generation flying vehicles. Moreover, infrastructure such as takeoff and landing sites and test‑flight facilities remains insufficient to support their introduction into service. Before commercialization can be realized, these issues urgently require policy support. “We should accelerate the formulation of top‑level design and strategic planning for the flying car industry, proactively laying the groundwork in areas such as product management, certification, and standards development,” He suggested. He also called for a comprehensive overhaul of the flying car operating system—by establishing driver qualification and training frameworks, expediting the liberalization of low‑altitude airspace, and creating a unified regulatory command platform and low‑altitude airspace management system—to pave the way for the scaled‑up adoption of flying cars.

Effective January 1 this year, the Provisional Regulations on the Administration of Unmanned Aircraft Flight officially came into force, marking the entry of China’s drone industry into a phase of standardized development. On February 1 this year, the nation’s first piece of legislation dedicated to the low‑altitude economy—the Regulations of the Shenzhen Special Economic Zone on Promoting the Low‑Altitude Economy—was formally implemented, laying a legal foundation for the sector’s takeoff. Meanwhile, provinces and municipalities such as Hainan have also opened up airspace access for low‑altitude operations and are piloting reforms in low‑altitude airspace management, thereby paving the way for the commercial deployment of flying cars in the future.

Although the policy framework is steadily being refined, it remains undeniable that the low‑altitude economy is still in its early stages of development. Whether it’s product regulations and certification, the coordinated management of air traffic, infrastructure deployment, the establishment of standards, or the design of viable business models and supporting services, all these areas require further maturation and advancement. As a result, it will likely be some time before flying cars become commonplace in ordinary households.

(Car Hundred Think Tank)