(Yicai) Dec. 16 -- China’s low-altitude economy, which refers to the use of drones and roadable aircraft in areas such as logistics, tourism and agriculture, is going from strength to strength, with strong government support, ample investment and plenty of commercial niches, but there are still a number of obstacles that need to be overcome for the sector to reach its full potential.

Many local governments have announced their medium and long-term plans for the low-altitude economy, which refers to aircraft flying at altitudes of between 100 meters and 1,000 m, as it becomes a new economic focus. In the last six weeks, more than 10 industry-specific exhibitions have been held across China.

The sector is also a darling of venture capitalists. For example, in June, a tech firm backed by auto manufacturer Geely bagged hundreds of millions of Chinese yuan, equivalent to tens of millions of US dollars, in B-round financing. Two months later in August, Xpeng AeroHt, a flying car firm under electric vehicle maker Xpeng Motors, secured USD150 million in Series B1 funding and kicked off its Series B2 round. That month, battery giant Contemporary Amperex Technology invested hundreds of millions of US dollars in electric vertical take-off and landing airplane developer Autoflight. In September, roadable aircraft startup Vertaxi bagged CNY200 million (USD27.4 million) in a Pre-B financing round.

Wide Array of Applications

Drone and e-VTOL operators are carving out new application scenarios at tourist attractions and in downtown business areas. Kings Hawk Aviation Service provides short flights in its roadable aircraft at tourism hot spots, pilot Cao Zhiqing told Yicai. The Shenzhen-based firm supplies the pilots, aircraft as well as the operational maintenance teams for this service.

Cao said he spent this year ferrying around tourists at scenic spots. Each flight usually lasts for between eight and 15 minutes, and the price, which is determined by both the company and the tourism location's operator, ranges from CNY500 (USD69) to CNY800.

On-demand services giant Meituan’s drones were flying 43 routes to and from major cities such as Shanghai, Beijing, Shenzhen and Guangzhou as of the end of September, and had completed more than 360,000 food-delivery orders, the Beijing-based firm said.

Meituan has set up an intelligent dispatching system, which connects remote crews, unmanned aerial vehicles, airports, and air traffic planning control modules, to help drones determine their own routes and schedules within the complex airspace of the city and to monitor the status of the fleet in real time, a company insider said. 

Once a customer places a food order, the prepared takeway is placed in the designated drone, Yicai learned during a visit to Meituan's drone food delivery depot in Shenzhen. After the drone receives the command, it will take off immediately to deliver the package to the specified drop-off location.

Slow Approval Process

However, for most low-altitude aircraft manufacturers, receiving the greenlight to fly is a time-consuming and costly process. Only two roadable aircraft models in the country have received an airworthiness certificate, which includes a Type Certificate and an Operator Certificate, so far.

"We plan to apply for an airworthiness certificate next year, but the approval process will take a minimum of three years, if all goes well," said Jin Gang, the executive president of Beifei.

For a new eVTOL model to receive its first certificate, it needs to go through multiple processes such as prototype production, testing, and adjustment that will cost at least CNY1.5 billion (USD206 million), said Luo Kedi, founder of Shenzhen Aoxiang Tianji Technology.

Short battery life is also a critical problem facing the whole industry, a staff member at a drone manufacturer in central Henan province said. If the length of the battery life for large and passenger-carrying low-altitude aircraft cannot be extended, then it will be difficult to use the machines in more commercial scenarios.

“Our battery firm has made drone batteries one of its topics of focus, but when they will actually be produced depends on demand,” a company insider said.

Editors: Tang Shihua, Kim Taylor