China's ambitious vision for a low-altitude economy, featuring flying taxis and delivery drones, is encountering significant headwinds despite massive government backing and rapid technological development. The sector, which includes unmanned aerial vehicles for transport and logistics, represents a bold step into futuristic urban mobility but faces a complex journey towards widespread commercialisation.
The Current Landscape: Drones and Pilotless Taxis
In Guangzhou, an unmanned, oval-shaped aircraft from flying taxi manufacturer EHang is undergoing trials, its whirring rotors echoing like a miniature helicopter over a riverside innovation zone. This scene, once confined to science fiction, is becoming increasingly common in China's technological hubs.
Nearby Shenzhen has embraced drone delivery as part of daily life, with food-delivery drones becoming both a practical service and tourist attraction. Polish visitor Karolina Trzciańska experienced this firsthand, ordering bubble tea and lemon tea via drone. "This is the first time I'm seeing something like this, so it was super fun to see the food being delivered by the drone," she remarked after her drinks arrived through light drizzle.
The economic scale is already substantial. Activities in airspace below 1,000 metres generated business turnover worth 506 billion yuan (£55 billion) in 2023, accounting for approximately 0.4% of China's economy. According to Zhang Xiaolan, a researcher at the State Information Center, this figure is projected to soar to 3.5 trillion yuan (£380 billion) by 2035.
Major Players and Regional Development
Guangdong province emerges as the clear leader in this emerging sector, hosting drone giant DJI, which commands an estimated 70% of the global commercial drone market. A report by research units including the Chinese Academy of Sciences and Peking University confirms Guangdong's dominance, followed by wealthy eastern coastal provinces Jiangsu and Zhejiang, near Shanghai.
Other significant players in Guangdong include EHang, logistics company SF Express's drone arm Phoenix Wings, and automaker XPENG's flying car unit ARIIDGE. The provincial government has announced plans to accelerate construction of flight service stations and platforms to facilitate airspace operations, while supporting locally issued discount vouchers for low-altitude tourism.
Shenzhen, Guangdong's technology and financial hub, has launched a 15-million-yuan (£1.6 million) award for companies that earn certifications required for passenger eVTOLs (electric vertical take-off and landing vehicles).
China's Civil Aviation Administration has already granted certificates allowing EHang 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 yet launched, EHang's vice president He Tianxing says the company aims to begin with aerial sightseeing services.
"It can't just be a research product, nor an engineer's toy," He stated, outlining his vision for citywide networks using the rooftops of malls, schools and parks as terminals. The company has been building takeoff and landing sites in 20 Chinese cities over the past two years, with He expecting aircraft from various companies to be flying multiple routes possibly after five years.
Technical Challenges and Safety Concerns
The path to commercialisation faces substantial obstacles, primarily concerning battery technology and safety. Guo Liming, co-founder of Shenzhen-based Skyevtol, identified the biggest challenge as maintaining longer flights and overcoming battery capacity limitations. His company's single-seat manned eVTOL aircraft, priced at around $100,000, can only fly 20 to 30 minutes before requiring recharge.
Safety incidents have also created turbulence for the emerging industry. In September, two XPENG eVTOL aircraft collided after a rehearsal for an exhibition, with one catching fire during landing. Although the company reported no injuries, another expo cancelled flying demonstrations the following week.
Despite these setbacks, XPENG continues to showcase its flying cars, 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. A trial run of sightseeing flights in Dunhuang, famous for its Buddhist caves and dunes, is planned for next July.
Regulatory Hurdles and International Context
Airspace control represents another significant barrier to growth. Less than one-third of China's low-altitude airspace was accessible for general aviation use in 2023, with problems of uneven distribution and lack of internet connectivity, according to researcher Zhang Xiaolan. The number of registered general aviation aerodromes in China, excluding private airports, was just about a tenth of those in the United States.
Frank Zhou, managing director at GBA Low Altitude Technology Co., noted that despite China's leadership in drone technology and manufacturing, policy constraints including limited airspace access might mean overseas markets offer more promising opportunities. "Perhaps for some Southeast Asian countries, if I introduce these applications to them, their demand could explode," he suggested.
The international context provides both cautionary tales and competitive pressure. In Germany, air taxi makers Lilium and Volocopter filed for bankruptcy, though the latter was later bought by Diamond Aircraft Group, a subsidiary of a Chinese firm.
Chinese policymakers are gradually working to close the infrastructure gap. The military, which generally commands use of most Chinese airspace, has pledged to simplify approval procedures and shorten review times in Shenzhen and five other provinces. Proposed revisions of the civil aviation law include a chapter specifically addressing low-altitude airspace allocation and supervision.
Future Projections and Export Potential
Industry experts anticipate gradual progress toward commercialisation. Gary Ng, a senior economist at Natixis Corporate and Investment Banking, expects meaningful commercialisation to materialise around 2030, with passenger-carrying eVTOLs for tourism or industrial purposes beginning before flying taxi services become widespread. He believes some aerial products could become key exports for China.
Chen Wen-hua, director at the Hong Kong Polytechnic University's Research Centre for Low Altitude Economy, noted that China is a latecomer but now leads in developing small drones and low-altitude airspace investments. One significant advantage is the ruling Communist Party's ability to mobilise regulators, industry players and universities to work toward common goals.
However, Chen cautioned that technological development, safety concerns and public acceptance will ultimately determine how quickly different applications of drones and low-flying vehicles are adopted. "The future for the low altitude economy is bright," he said, "however, the road leading to that bright future might be treacherous."
As Chinese companies continue to innovate and regulators gradually adapt, the world watches to see whether China's vision of a comprehensive low-altitude economy can truly achieve lift-off, transforming urban transportation while navigating the complex challenges of technology, regulation and public acceptance.
