Air Taxi First Air Taxi Accident Dampens China's Leap into the Third Dimension

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During an air show, two eVTOL air taxis collide – one passenger is injured. Yet China remains unwavering in the 190-billion-euro market.

It was the first collision of two air taxis. On September 16, 2025, during an air show, two eVTOLs (electric vertical take-off and landing) of the AeroHT brand by Xpeng collided in mid-air. One of them crashed and burst into flames. A passenger had to be hospitalized with injuries but was not in life-threatening condition, according to Chinese media reports.

Although this accident occurred during the "Changchun Airshow," and not during regular operations, it has reignited the debate about the safety of the "low-altitude economy" in China. Commentators are calling it a "wake-up call."

A video of the crash went viral on China's social media. It was followed by much ridicule. "Sort things out on the ground first before you go to the sky, that's better for everyone," one user remarked. "New technology always comes at a price," read a comment on the portal Hangzhou Wang. For the industry, the call now is to guide the young sector's ascent "from frenzy to reason."

eVTOL industry as a state key project

However, no one expects the accident to significantly slow down the rapid rise of the Advanced Air Mobility sector in the People's Republic. This is due to, on the one hand, strong state support for the development of this new economic sector, and on the other hand, the many investments in the industry.

The central government had officially declared the development of eVTOLs for passenger operations and parcel delivery a "key project" just last year. In the 2024 government report, the low-altitude economy was explicitly mentioned for the first time, after it had already been addressed at the 20th Congress of the Communist Party leadership.

Six pilot cities

Accordingly, there are numerous local projects across the country. Six cities, including Hefei, Hangzhou, and Shenzhen, are officially supported as pilot cities for air taxis and flight drones by the Civil Aviation Commission in Beijing.

Corridors for deliveries

Each of these locations is now testing its own scenarios. Hefei has launched pilot projects for eVTOL passenger routes, Hangzhou is establishing delivery corridors for drones, and Shenzhen is enabling its taxi company Meituan to conduct citywide delivery flights by drone. More than 30 provinces and cities have since incorporated the topic into their development programs.

Legislation is also advancing rapidly. At the end of 2024, the Ministry of Transport and CAAC jointly proposed a draft amendment to civil aviation legislation to provide nationwide legal backing for the new low-altitude economy.

Local laws regulate the industry

At the local level, regions are enacting supporting regulations. For example, on March 1, 2025, a new ordinance came into effect in Guangzhou, preparing cities for vertiports, infrastructure, and the promotion of the new aviation economy.

Hangzhou is developing its own rules for licensing, launch sites, and emergency management in low airspace as the first city. Shenzhen has passed a special law to promote intra-city and inter-city routes for eVTOL passenger and cargo transport.

Industry receives ten billion in new capital

All these political decisions are beginning to show results. 2024 was celebrated in China's trade media as the "first year of the low-altitude era."

The strong support from government circles is encouraging more and more investors to invest in the production of eVTOLs. In the first half of 2025, China recorded nearly 100 new funding rounds in the low-altitude sector with a total of over 75 billion yuan in fresh capital (approx. 9.5 billion euros).

Funding creates supplier ecosystem

More and more start-ups and tech investors intend to join in. The CAAC estimates the total volume of the Low-Altitude Economy for 2025 at around 1.5 trillion yuan, approximately 190 billion euros. This would already be a tripling compared to 2023, when the total value amounted to about 64 billion euros.

This sector in China includes eVTOLs as air taxis, drones in logistics, helicopters and small aircraft for regional transport, the construction of "vertiports" and other infrastructure, as well as the entire supply industry for components such as batteries, electric motors, or flight control systems.

Industry with million-dollar revenues

By 2035, this entire new market is expected to grow to approximately 3.5 trillion yuan. However, the eVTOL aircraft segment is clearly developing particularly rapidly.

In 2023, eVTOLs in China already generated nearly one billion yuan in revenue (approximately 120 million euros), an increase of 77 percent compared to the previous year. Experts predict that the eVTOL sector could grow to nearly ten billion yuan by 2026.

Yang Jincai, chairman of a drone association, called 2025 the "founding year" for eVTOL and anticipates a "very active development phase" over the next five years.

Xpeng AeroHT as a pioneer

Xpeng AeroHT, a subsidiary of the electric car manufacturer Xpeng, is particularly active. In November, the company presented its first model, a "Land Aircraft Carrier," at an air show. It was precisely this model that recently crashed at the air show in Changchun.

In the middle of this year, just shortly before the accident, the start-up secured funding rounds totaling over 750 million dollars. It is currently building a factory in the Greater Guangzhou area with a capacity for 10,000 eVTOLs per year.

EHang with approval success

Another pioneer in the industry is EHang from Guangzhou. The company, founded in 2014, has built a two-seater, autonomously flying passenger drone model (EH216). It is successfully working to secure approvals from authorities.

At the end of 2023, EHang became the first company to be awarded a type certificate for an autonomous eVTOL. Later, the company also received a production license for its EH216. The eVTOL is already being produced in small series, for example, for providers of tourist flights that have placed large orders.

This brief overview of the current status shows that the low-altitude economy will very likely remain an important future project for China's authorities and companies despite the unfortunate accident. However, insiders expect there will be more regulations on flight safety, which is generally welcomed.