A revolutionary electric vertical takeoff and landing (eVTOL) aircraft that makes urban air mobility a reality has begun its testing phase and is anticipated to go into commercial usage as soon as 2024, paving the way for affordable short-distance air taxi travel in China

The pace of eVTOL investment in China accelerated after several eVTOL startups from the US and Europe, such as Tencent-backed Lilium GmbH, went public sequentially within a short period of time.

As it develops a prototype air taxi, Chinese electric aircraft company TCab Tech has recently secured 100 million yuan ($15 million) in investment in an effort to compete with more established rivals in the developing sector.

Grand Flight Investment led the pre-Series A financing for the Shanghai-based startup, with the participation from BlueRun Ventures China and the family office of Tencent Holdings Ltd. co-founder Jason Zeng.

TCab, which was founded just under two years ago, will use the funding to develop its technology for the electric vertical takeoff and landing, or eVTOL, market. Investors and entrepreneurs are paying attention to the small planes that fly a few passengers over relatively short distances in the fight to stake out the future of mobility.

In recent months, the Chinese eVTOL market has grown more active and competitive.

Geely Aerofugia, a subsidiary of Chinese automaker Geely, successfully test-flew an unmanned full-scale prototype of the AE200 five-seat eVTOL in January. The three-passenger Prosperity 1 eVTOL, which Shanghai-based startup AutoFlight pilots, has flown four full-scale versions to date. A full-scale prototype of the V.MO unmanned four-passenger eVTOL from Volkswagen Group China has also flown.

In December 2019, Geely Aerofugia made public their plans to create an eVTOL air taxi by conducting the first flight of a remotely piloted subscale model. In June 2020, a full-scale aircraft idea was shown, and by year's end, a technology demonstration is expected to take to the skies. Both the passenger and subregional—under 500 km [310 mi]—logistics segments are targets for the company.

Aerofugia was created after Geely acquired American flying-car company Terrafugia in 2017. The company is also forming a joint venture with Volocopter to produce and run the German startup's eVTOL in China. In September 2021, the Volocopter (Chengdu) Technology venture placed a purchase order for 150 aircraft.

Additionally, the first full-scale prototype of Vertaxi's Matrix 1 (M1) electric vertical takeoff and landing (VTOL) aircraft has also been presented recently, along with plans for the company to launch the market with an unmanned freight variant first.

The Shanghai-based startup Vertaxi claims that its development strategy is one that puts "suburbs before cities, objects before people, and isolation before integration." Starting with an unmanned cargo configuration, this will eventually move to a crewed operation before the aircraft is used for passenger-carrying urban air mobility (UAM) services. The startup has so far raised 150 million yuan ($22 million) after completing a second investment round in December last year.

The sector is still at an early stage, with several Chinese firms, including Xpeng HT Aero, Volant Aerotech, and TCab, joining the race.

They are attempting to duplicate China's success with electric vehicles by utilizing many of the same advantages, such as a big pool of skilled workers and a sizable domestic market.

HT Aero has released three models since its beginning in 2013, according to its website, with the most recent being the Xpeng X2, which was released earlier this year. The company claimed that the two-seat X2, which resembles a drone, can fly up to 130 kph at a height of 1,000 meters and can occasionally take off and land by itself. A source at affiliate Xpeng, however, said that HT Aero has not yet formally begun selling its goods.

HT Aero received a lot of media attention after He Xiaopeng, the creator of XPeng Motors, revealed plans to invest in Huitian (formerly known as "HeiTech"), gaining a controlling position in the eVTOL startup and attaching XPeng's brand to the company.

The fact that major automakers, including Mercedes, Toyota, Porsche, Hyundai, and Geely, all made comparable investments shows the strong momentum of eVTOL in the automotive sector, which was also clearly demonstrated by XPeng's acquisition of Huitian. Although it's unclear how far XPeng wants to take vertical mobility, the acquisition gave the Chinese eVTOL market access to finance and knowledge in electrical product development, autonomous software, and mass production.

HT Aero stated that it is considering developing flying vehicles for individual consumers, in contrast to most eVTOL developers who primarily sell their products to corporate clients engaged in air taxi services. This means that HT Aero would need to overcome a number of obstacles, including obvious safety issues, individual licensing, and a lack of regulations on personal use of such vehicles.

HT Aero president Zhao Deli previously stated that HT Aero intended to construct facilities on the ground for the monitoring, remote control, and use of its flying cars, which the business claims can be used for passenger transportation, aerial sightseeing, police patrols, and emergency rescue.

The action is comparable to that of a larger domestic rival, EHang Holdings Ltd., which said that it will approach the operation of its own air mobility platforms with the same importance as the sale of its self-flying vehicles to outside clients.

EHang Holdings Ltd., a Chinese startup, is one of the world's first manufacturers of autonomous aerial vehicles that has reaped the benefits of public capital markets to support growth. The company is driving forward an urban air mobility project that focuses on tourism, passenger transport, logistics, and emergency rescue.

EHang, nevertheless, has also received more criticism than many of its competitors, in part because it is a publicly traded business. Allegations have been made regarding the eVTOL products sold and certified by EHang, as demonstrated by a devastating Wolfpack Research report from February 2021.

In the report, Wolfpack Research questioned EHang’s business and accused the US-listed company of fraud.

With a number of advantageous policies being implemented, the low-altitude aircraft sector in China is anticipated to flourish. All-area low-altitude flights were first introduced in China's Hunan Province in July 2021, then in Jiangxi and Anhui Provinces in East China. The Zhejiang Province in East China also promised to actively support and develop general aviation, low-altitude tourism, airport building, helicopter landing fields, and civil aviation.

By 2040, the urban air mobility industry might reach $1 trillion, with China accounting for 25% of that total, according to a report released by Morgan Stanley.