Qiu Mingquan, partner and vice-president of XPeng, told NewsChina that local governments are behaving differently with low-altitude enterprises than they did during the previous craze to develop the new-energy vehicle industry.
Having worked in a leading auto enterprise for 14 years before joining XPeng, Qiu said that governments now have deeper foresight and begin to plan a new industry much earlier. They care more about ensuring their moves and policies are suited to local conditions.
“Local governments no longer just talk about bringing in commerce and investment, but more about developing the low-altitude economy based on local economic characteristics,” Qiu said. “For example, some regions are suitable for test flights, some regions known for manufacturing hope to attract production or R&D bases, and some less-populated regions with vast land resources in the west may combine the low-altitude economy with tourism, culture and logistics,” he said.
XPeng’s first partner was Hechi in Guangxi Zhuang Autonomous Region, where the mountainous geography and the province’s highest-altitude airport offered a good site for training in winter and plateau conditions.
In November 2023, XPeng signed a cooperation agreement with the provincial development and reform commission of Hainan Province, attracted by the unique climate and approved areas for safe flights. Hainan has taken the lead to implement management of different low-altitude areas and 83 percent of the island’s area is designated for low-altitude flight.
“We won’t establish regional centers or plants nationwide in the short term,” Qiu told NewsChina, revealing that XPeng decided not to overextend itself in terms of local government deals just to get cash injections, nor will they make promises for development beyond the present phase.
Xie Jia, senior deputy president of AutoFlight, agrees with Qiu, saying they have received several inspection groups from various regions, but they are all exercising caution before making decisions.
“Not every local government is focusing on [low-altitude] manufacturing,” Xie said, adding that regions know where their strengths lie.
But some areas are eager to reap potential rewards. A July article published in Communications World Weekly revealed that the local government of a western county which was just lifted out of poverty is trying hard to persuade a local company to support the low-altitude economy, though experts do not think the region is suitable for the new industry.
“It’s understandable that local governments want to get an upper hand in this emerging industry, especially coastal regions in East China with abundant industries, talent and funds,” an executive of a leading low-altitude enterprise told NewsChina on condition of anonymity, adding that “regions where traditional industries are not advantaged are showing the same enthusiasm, because they may quickly realize an application scenario.”
“The low-altitude economy is like the next new-energy auto industry, and some local governments hope their cities may make a leap in development or at least not lag behind, just as cities like Changzhou [in Jiangsu Province] and Hefei stood out by seizing the chance offered by the new energy industry,” he added.
Examples of failure are ringing an alarm. At the end of 2024, Volocopter, a German unicorn company developing eVTOLs announced it is applying for bankruptcy and restructuring.
Several months before, German electric plane company Lilium announced bankruptcy due to shortage of funds. Chinese media revealed that Lilium has received many rounds of financing from tech giant Tencent, headquartered in Shenzhen.
Experts warned that the low-altitude economy is in a preliminary phase and will face many headwinds, including regulatory, security, operational issues as well as tests from the market.
“Whether or not a region’s plans will be advantageous depend on how a local government understands this new strategic industry and how it combines it with local industries and resources to its advantage, rather than just rushing to follow others,” Zhang said.
“We’re still far away from a time when one can simply wave a hand to grab a [flying] taxi. Maybe 10 years or 20 years. The low-altitude economy needs funding and more patience from local governments,” the anonymous executive said.
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