Soaring to New Heights: China's Low-Altitude Technologies Takes Off
A Billion Dollar Market with Drones and eVTOLs
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In this edition, we dive into China’s billion-dollar low-altitude economy, brought to you by Rita Luan from Beijing. Got a topic or company you'd like us to cover in the future? We’d love to hear from you—your input keeps our discussions fresh and engaging.
Introduction
Rapid Growth of the Low-Altitude Economy: China's low-altitude economy reached $69 billion in 2023, projected to exceed $137 billion by 2026 and $480 billion by 2035, driven by government support, innovation, and rising demand in sectors like tourism, logistics, and urban air mobility.
Drones and eVTOL (electric Vertical Take-Off and Landing) as Market Leaders: Drones are leading the low-altitude economy, particularly in agriculture and logistics, with China’s civilian drone market reaching $16 billion in 2023. eVTOLs are also emerging, with the global market projected to grow from $1 billion in 2025 to $6 billion by 2030, with a 50% CAGR.
Critical Role of Government Policies: The Chinese government is accelerating growth through infrastructure and policy support. By 2024, over 100 low-altitude flight service airports were built, with plans for 200 by 2025. More than 50 airspace management centers are in operation, with airspace usage projected to grow by 30%.
Emerging Industry Leaders: Companies like EHang, ZeroTech, and Xpeng AeroHT are leading eVTOL development, with EHang’s EH216-S being the first certified autonomous eVTOL. DJI Innovations is expanding into eVTOLs, while traditional aviation companies like CITIC Offshore Helicopter are also investing in these technologies.
Expanding "Low-Altitude+" Applications: Low-altitude technologies are transforming industries, with aerial tourism gaining popularity and drones revolutionizing last-mile delivery. Meituan and SF Express have made significant strides, completing hundreds of thousands of drone deliveries.
Strong Investment Flow: The sector is attracting substantial investment, with $6.2 billion invested in drones and $0.9 billion in eVTOLs by mid-2024.
Concentration of Development in Key Cities: Beijing, Shenzhen, and Shanghai are leading hubs for the low-altitude economy, with strong government support and venture capital investments. Other key cities include Guangzhou, Nanjing, Chengdu, Hangzhou, and Suzhou.
Overview of the Low-Altitude Economy
China's low-altitude economy began around 2016, fueled by advancements in drone technology and the opening of airspace below 1,000 meters (up to 3,000 meters in some regions). It integrates aerial vehicles like drones, eVTOLs, and helicopters with various industries.
The sector gained momentum with the launch of the "Pilot Program for Low-Altitude Airspace Management Reform" by the Civil Aviation Administration of China (CAAC) in August 2016. Since then, policies have improved, and the drone industry has grown rapidly. The low-altitude economy now presents significant opportunities for investment, innovation, and enhanced public services.