It's no empty talk, low-altitude economy takes off

Flying taxis and drone deliveries, once confined to the realm of science fiction, are poised to become a reality in Shanghai, transforming how its residents commute, work, and live.

Driven by breakthroughs in new energy technologies, a rapidly expanding civil drone sector, and substantial government investment, China's "low-altitude economy" is taking off.

This burgeoning field operates within 3,000 meters above ground, integrating various manned and unmanned aerial vehicles for tasks ranging from passenger transport to cargo delivery.

According to the "China Low-Altitude Economy Development Research Report" by CCID Consulting, the sector reached a staggering 505.95 billion yuan (US$71 billion) in 2023, reflecting a 33.8 percent growth rate. The Civil Aviation Administration of China (CAAC) projects this figure will soar to 2 trillion yuan by 2030.

Shanghai stands at the forefront of this revolutionary shift, aspiring to become an international "City in the Sky."

The city's ambition is encapsulated in the recently unveiled "Shanghai Low-Altitude Economy Industry High-Quality Development Action Plan (2024-2027)," which aims for a core industry value exceeding 50 billion yuan by 2027 and envisions creating inter-provincial low-altitude aviation hubs in the Yangtze River Delta.

Electric vertical takeoff and landing aircraft (eVTOLs), often referred to as flying cars, are at the cutting edge of this sector. Designed for short-haul flights within and between cities, eVTOLs offer the potential to revolutionize urban commuting.

Shanghai boasts a robust industrial base for eVTOL technology.

According to the Shanghai Commission of Economy and Informatization, the city hosts around 50 percent of China's leading eVTOL innovation companies.

Additionally, Shanghai has been designated as one of the first national pilot zones for civilian unmanned aerial vehicle testing. The city is involved in various applications, including "sea-coast-city" logistics in Jinshan District, urban low-altitude logistics in Yangpu District, drone cluster performances in Xuhui Waterfront, and cross-city passenger operations in the Yangtze River Delta.

The "Action Plan" emphasizes nurturing leading eVTOL enterprises, focusing on developing 4-6 passenger eVTOL aircraft.

It's no empty talk. Shanghai is home to top domestic eVTOL companies such as Vertaxi, Auto Flight, TCab Tech, Volant, and Pantuo, collectively known as the "eVTOL Five Dragons."

Among the most anticipated developments is the MATRIX1 (M1) prototype, a 2-ton manned eVTOL developed by Vertaxi. Currently undergoing interior assembly at Vertaxi's Jinshan facility, the M1 will be showcased at the 7th China International Import Expo in two months.

The M1, with a maximum payload of 700 kilograms and capacity for up to five passengers, is designed to reduce travel times from two or three hours to approximately 30 minutes. After completing its maiden flight in Shanghai last October, it became the first fully Chinese-developed 2-ton eVTOL.

Vertaxi anticipates obtaining a cargo airworthiness certificate for the M1 next year, with plans to commercialize the cargo version before introducing the manned model, according to Yue Tingting, the company's vice president.

The eVTOL industry in China was valued at 980 million yuan in 2023, marking a 77.3 per cent year-on-year increase. Concurrently, drone deliveries are becoming a crucial component of China's logistics landscape.

The civil drone industry reached 117.43 billion yuan in 2023, a 32 percent increase from the previous year. Recent CAAC statistics reveal that nearly 608,000 new drones were registered in the first half of this year, a 48 percent increase, with total flight hours reaching 9.816 million.

Shanghai's rapid expansion of drone companies underscores its role as a hub for aerial logistics. The city now hosts over 300 drone companies approved by the CAAC's East China Regional Administration.

The East China UAV Base, established in Jinshan in 2018, covers 1,370 square kilometers and supports various drone activities, including eight approved logistics routes and a 1-square-kilometer land-based test site.

A standout player in this sector is Fengyu Shuntu, a subsidiary of SF Express. Since October 2020, it has been operating drone routes from the East China UAV Base, including a seafood cold chain connecting Jinshan and Shengsi, an island county of Zhoushan Islands in Zhejiang Province. The Fengzhou 90 drones perform around 10 flights daily, seamlessly connecting the ocean to Shanghai's urban center.

A significant milestone was achieved in May when the company completed its first flight from the East China UAV Base to Longhua Airport, enabling live seafood to be delivered from Shengsi to Shanghai's dining tables in just about three hours.

Looking ahead, the company plans to expand its drone delivery services to include pharmaceuticals, luggage, and documents. In July, it introduced Shanghai's first cross-river drone delivery route for medicines, an eight kilometer journey taking only minutes, ensuring the swift delivery of critical supplies.

Shanghai's rapid evolution in drone applications also includes urban logistics services in Yangpu and dramatic drone performances in Xuhui Waterfront, underscoring the city's leadership in cutting-edge aerial technology and logistics.