The power required for vertical take-off of eVTOL is 10-15 times that of ground driving, and solid-state batteries are the biggest technical breakthrough point of eVTOL at present.

With the acceleration of low-altitude infrastructure and the iterative progress of aircraft technology, the low-altitude economy is growing into a new outlet for China's economy.

The low-altitude economy covers multiple application scenarios such as general aviation, logistics, tourism, and emergency rescue, with a long industrial chain, and crosses with many industries such as new energy vehicles, aviation, and communications, and makes significant contributions to the national economy.

As the core commercial carrier of the low-altitude economy, eVTOL (Electric Vertical Take Off and Landing) has a significant impact on the development of the industry due to its technological progress and market expansion. According to Morgan Stanley, the global eVTOL industry market is expected to reach $35 billion in 2025, increase to $300 billion in 2030, and exceed one trillion dollars in 2040.

CITIC Securities said in a recent research report that 2025 is expected to be the first year of commercial operation of eVTOL. Looking ahead, with the acceleration of the improvement of eVTOL operation specifications, the advancement of solid-state battery technology, and the maturation effect brought about by the shift of the supply chain, the explosion of the eVTOL market may not be far away.

Semi-solid-state batteries will become the mainstream in the short term, and liquid hydrogen will last longer

The development of the eVTOL industry is closely related to the technological advancement of solid-state batteries. Since eVTOLs require 10-15 times more power to take off vertically than on the ground, eVTOLs require significantly higher battery energy density. CITIC Securities pointed out that the energy density of the battery pack reaching 330Wh/kg will effectively support urban air mobility and intercity transportation. At present, the energy density of power lithium batteries is generally about 200Wh/kg, and it is difficult to increase significantly, so solid-state batteries are a must for eVTOL, and their energy density directly determines the application level of the latter.

Deng Wei, chief analyst of new energy of power equipment at Huafu Securities, told Yicai that solid-state batteries are the biggest technical breakthrough point of eVTOL, and their research and development has made varying degrees of progress in various enterprises. The current semi-solid-state battery can reach an energy density of 300-450Wh/kg, which can support short-distance flights, and has been relatively mature; Another breakthrough will require all-solid-state batteries, but it will still require a certain amount of research and development time.

"Semi-solid-state batteries are the mainstream battery type for eVTOLs in the next 2-3 years." Deng Wei said.

Domestic eVTOL battery companies mainly include CATL (300750.SZ), Funeng Technology (688567. SH), EVE (300014. SZ), Guoxuan Hi-Tech (002074. SZ), Xinjie Energy, Zhengli New Energy, Lishen Battery, Azure Lithium Core (002245. SZ) and so on. Among them, the semi-solid-state battery of Xinjie Energy used in EHang's EH216-S aircraft, which has attracted much attention, uses lithium metal as the negative electrode and oxide ceramics as the electrolyte, with an energy density of 480Wh/kg. In November 2024, the EH216-S aircraft completed the world's first flight test of an eVTOL solid-state battery, with a range of 48 minutes and 10 seconds, an increase of 60%-90%.

In addition to energy density, battery cost is also a key indicator. It is reported that the battery is the highest single cost component in eVTOL. With 500 charge cycles, batteries account for more than 60% of the total operating costs of the eVTOL product. EHang estimates that a 1% reduction in battery costs will increase operators' operating profits by 3%; A 1% increase in battery life will increase operating profit by 2%. In addition, the weight of the battery accounts for about one-third of the empty weight of the eVTOL, so the weight reduction of the battery will also increase the range of the eVTOL and reduce the cost.

Comparing the prospects of pure electric, fuel hybrid and liquid hydrogen, Deng Wei believes that pure electric is the mainstream route in the long run, and fuel hybrid is a transition route worth considering in the current situation of insufficient pure electric range. Liquid hydrogen has a high density and can achieve ultra-long battery life of eVTOL. The 2.5-ton water-cooled liquid-hydrogen-powered tiltrotor eVTOLS4 of the American company JOBY completed its first flight in June 2024, with a total take-off weight of 680 kg, a load capacity of 120-160 kg, a flight duration of nearly 5 hours, and a flight distance of 841 kilometers, which is 2-3 times that of pure electric eVTOL.

However, Deng Wei analyzed that in combination with practical applications, under the journey of 50-400 kilometers, eVTOL has a time advantage over aircraft, such as intercity travel, cross-sea flight, etc.; With a journey of more than 800 kilometers, the aircraft has a time advantage. Therefore, the ultra-long range brought by liquid hydrogen can expand the application range of eVTOL, but it will not replace pure electricity.

The supply chain is translated and generalized, shortening the maturity cycle of the eVTOL industry

eVTOL can usually be disassembled into energy systems, power systems, avionics systems, flight control systems, and airframe structures. Deng Wei believes that in the field of "three electric systems" (batteries, motors, electronic controls) and airframes, there are a lot of overlaps between eVTOL and aviation and new energy vehicle supply chains, which can be translated and shared, realize technology sharing and cost optimization, and greatly shorten the maturity cycle of the industry. Wofei Changkong has said that eVTOL and the "three-electric system" of new energy vehicles can share about 70% of the supply chain.

Thanks to the rise of the new energy vehicle industry, China is a global leader in battery technology and can provide the most advanced energy system, as mentioned above. In the field of power system, the motor and electronic control technology of domestic enterprises are relatively mature, and Wolong electric drive (600580. SH) has cooperated with COMAC, Wofei Changkong and other companies to develop electric aviation electric drive systems; 300681. SZ) has reached a strategic cooperation with EHang to devote itself to the R&D and industrialization of eVTOL product power systems. Blue Ocean Huateng (300484. SZ) has reached a strategic cooperation with Lanyi Airlines to jointly promote the research and development project of electric vertical take-off and landing passenger aircraft.

The technical threshold of the airframe is low, and the current domestic suppliers are mainly general aviation manufacturers. The body materials are mainly made of high-strength lightweight materials such as carbon fiber composite materials, aluminum alloys, and titanium alloy 688295 s. SH), Guangwei Composites (300699. SZ), Xingyuan Zhuomei (301398. SZ) and so on.

The premise of commercial operation of eVTOL: airworthiness certification

As an emerging mode of transportation, the airworthiness certification of eVTOL is a prerequisite for its commercial operation. Among them, Type Certificate (TC), Production Certificate (AC) and Airworthiness Certificate (PC) are the three basic qualification certificates, which correspond to different airworthiness certification links to ensure the safety compliance of the aircraft from design, production to final operation.

At present, the United States, Europe, and China have not yet developed a systematic regulation dedicated to the certification of eVTOL airworthiness. It is reported that the Federal Aviation Administration (FAA) is in the process of establishing an airworthiness certification framework for eVTOL aircraft, incorporating existing aviation regulations, and has issued specific conditions for certain eVTOLs. The European Aviation Safety Agency (EASA) has developed new airworthiness regulations for eVTOLs and has successively published specific conditions and airworthiness compliance methods (MOCs) between 2019 and 2021. The Civil Aviation Administration of China (CAAC) adopts a case-by-case approach to the airworthiness certification of eVTOLs.

Among the domestic eVTOL manufacturers, EHang, Fengfei Aviation and Aerospace Feipeng have obtained TC certificates. Among them, EHang's EH216-S model has taken the lead in obtaining TC, PC and AC certificates, making the company the first company in the global eVTOL industry to collect three certificates for civil aircraft.

In addition to the above three certificates, the Operating Certificate (OC) is the final step in determining whether the eVTOL can be commercialized. An OC is a certificate obtained by an airline or other air operator that allows it to carry out air operations activities, and the applicant is the operating company, not the complete aircraft manufacturer.

Deng Wei said that OC certification is one of the most concerned issues in the industry at present, and only after obtaining OC can operators legally carry out commercial flight services carrying people or cargo, thereby bringing about the expansion of the market, so obtaining OC operation certificate is the beginning of commercial operation. This process depends mainly on the speed of policy review, but also on the technical level of the enterprise.

The

reason why OC application and certification is slow is that eVTOL is different from traditional aircraft, helicopters, and drones in terms of use environment and safety requirements, resulting in the verification of OC certificate cannot directly follow the existing standards in the field of civil aviation, and needs to be innovated and improved on the basis of existing regulations. For example, because eVTOLs operate in densely populated and complex cities, more detailed security assessments are required.

In terms of OC acquisition progress, EHang is also ahead of the curve. In July 2024, the Civil Aviation Administration of China (CAAC) officially accepted the applications for civil unmanned manned aircraft operation certificates submitted by its wholly-owned subsidiary, Guangdong EHang General Aviation Co., Ltd., which specializes in UAM (Urban Air Mobility) operation services, and its joint venture operating company, Hefei Heyi Aviation Co., Ltd., respectively. The Civil Aviation Administration of China (CAAC) has set up a professional review team to carry out the examination and approval of the operation license and operation qualification of unmanned manned aircraft for the two companies.

The short barge scene is expected to be the first to break out, focusing on intercity transportation and cultural tourism

Compared with traditional general aviation, eVTOL has the advantages of low cost, low noise and lower infrastructure requirements, so eVTOL is suitable for short-distance efficient transportation and some special fields, and the main application scenarios include urban air mobility, low-altitude logistics, emergency rescue and tourism.

In many scenarios, short-shuttle intercity transportation and cultural tourism are expected to take the lead in opening up the market. Deng Wei said that due to the susceptibility to weather and safety redundancy considerations, the actual range and mileage of eVTOL may be far from the upper limit, and 30 minutes may be a common level for now, mainly suitable for short-haul scenarios. One of the core advantages of eVTOL is the high efficiency of short routes, which can be a good alternative to slow ground transportation, such as Suzhou Industrial Park-Shanghai Hongqiao, Hainan-Guangdong, Shenzhen-Zhuhai cross-sea itineraries, as well as dealing with congestion during peak hours on traffic arteries and bridges in some large cities. There are also great opportunities in the cultural tourism scene, especially in scenic spots such as mountains and lakes, eVTOL can replace cable cars and cruise ships, saving time and bringing a better travel experience.

In 2024, there will be a number of test flight cases of eVTOL across the country. In February, the world's first cross-sea and cross-city eVTOL route made its maiden flight in Shenzhen, starting from Shekou and crossing the Pearl River Bay to Zhuhai. The 2-ton pure electric eVTOL "Shengshilong" adopted by Fengfei Aviation Technology for the flight has a cruising speed of 200 kilometers per hour and a maximum range of 250 kilometers. In November, Shenzhen's first eVTOL tour route was tested in Dameisha, Yantian, connecting Dameisha and Xiaomeisha with a cross-sea flight time of only 5 minutes, providing tourists with a brand-new aerial sightseeing experience.