Protocol | China

Will China really have flying cars in 2024?

Insiders say it's not (quite) so soon for EV maker XPeng's flying dreams.

XPeng flying car

XPeng unveiled the new generation of flying car design on Oct. 24.

Photo: XPeng

On either side of the Pacific Ocean, tech companies seem to have an obsession with the sky. While Elon Musk is launching rockets to space, Chinese electric vehicle company XPeng — a prominent domestic challenger to Tesla — is aiming for a lower altitude. On Oct. 24, it released a new product: a flying car that it says will enter mass production in 2024.

With two big propellers and a sci-fi design, XPeng's new product resembles a cross between a drone, a helicopter and an electric car. Suddenly, everyone in China is talking about flying cars, or Vertical Take-off and Landing (VTOL) aircraft, as they are more formally known. Above everything, people are asking whether the promise of rolling them out in 2024 is realistic or over-optimistic. So far, it looks like the pessimists are more likely right.

2021 has seen China's VTOL industry, especially new "eVTOL" models powered by electricity, growing steadily. Startups born this year are raising millions of dollars in seed funding while those with a few more years have received up to $500 million. But despite interest in the capital markets, there are many obstacles before an eVTOL product can make it into the skies.

In particular, eVTOLs are regulated as aircraft, meaning they need to undergo a different set of safety tests than cars. With the only VTOL-specific standards in the world proposed recently in Europe, no one knows how long the regulatory approval process in China could take. Observers say companies like XPeng may have the advantage in attracting media and investor interest, but ultimately, they are being too optimistic about the aircraft industry and its regulators, both of which act at a more prudent but slower pace than their automotive counterparts.

The industry disruptor

Much like how EVs have posed a serious challenge to traditional cars, eVTOLS are changing the industry of civil aviation.

"The number of parts in an eVTOL is about one-thirtieth the number of parts in a traditional civil aircraft," Louis Liu, founder of aviation and maritime tech consulting firm DAP Technologies, told Protocol. "This is why eVTOL is the future. It's less likely to break, its maintenance costs are low and it consumes electricity instead of gas."

The low technological barriers and strong commercial potential have attracted startups with little civil aviation experience. EHang, China's leading eVTOL company, listed on Nasdaq, started with consumer drone products. Zhao Deli was an amateur model-airplane fan before founding the company HT Aero, which was acquired by XPeng and developed the product released last week.

These firms represent a disruptive force in an industry that's traditionally more prudent when designing new products. In any country, developing an aircraft needs to go through rigid processes of getting an airworthiness certificate. Currently in China, no such certificate has been given to any eVTOL companies; in fact, the criteria for handing out a certificate has not been updated to accommodate eVTOL technologies, meaning companies can't apply for one even if they want to.

"Those outside [companies] unfamiliar with the aviation industry don't act in the traditional way. They operate with an internet company mindset, which is rapid reiteration and trial and error," said Liu. But their method may not work in the civil aviation industry, where safety concerns are taken more seriously than in the auto industry or drone industry.

A more realistic prediction

Around the world, eVTOL — and the futuristic urban air mobility solutions they could enable — remain an exciting prospect with no immediate results.

In a report released this year, Morgan Stanley walked back its optimistic predictions from two years ago and determined that exponential growth for eVTOL will only start "closer to 2040 or beyond."

"As for the odds of [XPeng's passenger aircraft] taking commercial flights in cities by 2024, I'm leaning towards a no. A serious amount of reliability and safety testing of all systems lies ahead," said Daniel Shaposhnikov, partner at London-based VC Phystech Ventures, which focuses on deep-tech companies. Apart from China's national regulators, he pointed to municipal regulators and even NIMBYists as factors likely to slow the pace to acceptance for urban air mobility products.

On a global scale, Shaposhnikov predicted the mass operation of air taxis (which is expected to be the real game-changer instead of private, hobby-use eVTOLs) to come in six to 10 years.

Liu is also not optimistic about the timeline that XPeng has laid out. It usually takes two or three years for regulators to come up with the requirements for getting an airworthiness certificate; only after getting this can companies design their products based on national standards. "To clear the whole process, you need four or five years," Liu said.

The benefit of being future-forward

Realistic or not, this move may give XPeng supporters something to talk about for a while.

XPeng has entered a neck-and-neck race with Nio and Li Auto, two other Chinese EV startups native to the internet era which, like XPeng, also lack support from traditional automakers. Between April and October, all three of them have crossed the important threshold of 100,000 EVs produced. Remarkably, it took Tesla 12 years to reach the same milestone, twice the time it took these three.

Called the "three swordsmen" of Chinese domestic EV companies, they are often compared with one another. A recent survey of over 1,000 Chinese EV owners found that each company bested the other two in at least one category, from popularity to reputation to recommendation value.

To stand out in the race, XPeng may be betting on positioning itself as an aggressively forward-looking company. "EVTOL is one of the future disruptive moonshot technologies, so I think XPeng is trying to be at the forefront ... to define the future of mobility/transportation," Xing Lei, an auto industry analyst and former chief editor at the Beijing-based China Auto Review, told Protocol.

But of course, it depends on whether XPeng can keep its promise of delivering eVTOL products in 2024. Otherwise, it's going to stay grounded for longer.

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