EHang Introduces Long-Range VT35 eVTOL, Expanding Air Mobility Portfolio

EHang Expands Portfolio with VT35 Long-Range eVTOL Debut

EHang Holdings Limited (NASDAQ: EH) introduced its new long-range pilotless electric vertical take-off and landing (eVTOL) aircraft, the VT35, at an event in Hefei, China, on October 13, 2025. This launch signifies a strategic expansion of the company's product portfolio, specifically targeting medium- to long-range aerial mobility applications.

Key Features and Market Positioning of the VT35

The VT35, an upgraded model derived from the VT30 prototype, is engineered for advanced transportation scenarios such as intercity, cross-sea, and cross-mountain travel. The aircraft features a tandem-wing design, incorporating eight lift propellers for vertical flight and a dedicated pusher propeller for efficient cruise mode. Performance specifications indicate a fully loaded range of approximately 200 kilometers and a maximum takeoff weight of 950 kg.

Designed for compatibility with existing EH216-S vertiports, the VT35 offers operational flexibility in urban environments, utilizing diverse takeoff and landing sites including parks, rooftops, and parking lots. The standard version of the VT35 is priced at RMB 6.5 million (approximately $900,000) for the Chinese domestic market.

Crucially, the Civil Aviation Administration of China (CAAC) formally accepted the VT35's type certificate application in March 2025, and the aircraft is currently undergoing the rigorous airworthiness certification process, with internal testing and experimental flights actively in progress.

Market Reaction and Corporate Strategy

The introduction of the VT35 strategically positions EHang to penetrate the intercity travel segment, thereby complementing its existing EH216-S model, which is optimized for shorter intracity operations. This strategic diversification aims to accelerate the evolution of the low-altitude aerial mobility ecosystem from urban to broader intercity corridors.

A significant development accompanying the launch is the placement of initial purchase orders for the VT35 by a platform company backed by the Hefei Municipal Government. This commercial traction follows an investment cooperation agreement signed in August 2025 between EHang and the Hefei Municipal Government, aimed at establishing a comprehensive VT35 series product hub in Hefei. This initiative entails an approximate RMB 1 billion investment from EHang, reciprocated by an estimated RMB 500 million in comprehensive support from the Hefei government, potentially including additional aircraft orders and industry chain collaborations.

Furthermore, EHang has solidified cooperation agreements with Zhejiang Zhiyi UAV Technology Co., Ltd. and Hainan Fuma General Aviation Industry Development Co., Ltd., focusing on the purchase, promotion, and operational aspects of the VT35.

Financial Performance and Valuation Context

EHang Holdings Limited (EH), currently holding a market capitalization of approximately $1.24 billion, reported second-quarter 2025 revenue of RMB 147 million. This represents a 44% year-over-year increase, alongside an adjusted net profit of RMB 9.4 million, marking a substantial 683% rise. The company has sustained strong gross profit margins, recorded at approximately 61.5%.

Despite these positive indicators, the second-quarter revenue figures fell short of analyst expectations. In response, Jefferies adjusted its price target for EH to $24.38, while concurrently maintaining a "Buy" rating on the stock.

The company's price-to-sales (P/S) ratio stands at 20.1x, which is notably higher than the U.S. Aerospace & Defense industry average of 3.3x. This valuation suggests that investors are factoring in a significant premium for anticipated future growth within the nascent Urban Air Mobility (UAM) sector. EHang has also revised its 2025 full-year revenue guidance to approximately RMB 500 million.

Broader Implications for the eVTOL Sector

The VT35 launch represents a significant advancement for China's burgeoning "low-altitude economy," which benefits from robust government backing and supportive policy frameworks for eVTOL development. EHang is positioned as an early mover in the pilotless eVTOL sector, with its EH216-S model already achieving certification for commercial operations in China. This distinction places EHang ahead of many global competitors that are still in earlier development stages.

However, the company faces inherent risks associated with potentially slower order deliveries, delayed revenue realization, and the complex challenges of certification and high operational costs typically associated with longer-range eVTOLs. While investor sentiment generally remains positive due to the significant growth potential, the company's elevated valuation and execution risks necessitate a cautious approach.

"The VT35's government-backed debut may help support near-term commercial validation, but with management still focused on careful operational scaling, it does little to address the biggest immediate risk: slower order deliveries and revenue realization as the company balances growth ambitions with operational stability."

Some analyses suggest an analyst fair value estimate of $23.71, indicating a potential 31% upside from its recent price of $18.23.

Outlook and Remaining Challenges

The successful airworthiness certification of the VT35 by the CAAC remains a critical near-term milestone. EHang's expanding partnerships with municipal governments are anticipated to be instrumental in accelerating market adoption and its comprehensive integration into China's low-altitude economy ecosystem.

Ongoing challenges include the inherently high operational costs characteristic of eVTOL technology, persistent regulatory hurdles, and the imperative for continuous infrastructure development. The company's capacity to effectively balance ambitious growth objectives with operational stability and efficient revenue realization will be paramount for its long-term success in the rapidly evolving Advanced Air Mobility (AAM) market. Furthermore, the potential for international expansion, particularly through strategic alliances such as that with China Road and Bridge Corporation, will be a key area of observation for investors.