China's Low-Altitude Economy in 2025: Hype, Bubbles and the Battle for Real Value
China's low-altitude economy is entering a new era of commercial deployment in 2025, moving beyond pure concept speculation toward an "orders-speak-louder" phase. However, while policy support remains robust and application scenarios multiply, the sector faces significant challenges including infrastructure gaps, technical bottlenecks, and unproven business models that threaten to derail its trillion-yuan ambitions.
The industry has achieved significant milestones this year. China's Civil Aviation Administration estimates the sector's scale will reach 1.5 trillion yuan (US$210 billion) in 2025, nearly triple the 505.95 billion yuan recorded in 2023. Yet this growth is accompanied by mounting skepticism, as leading company EHang Holdings posted a net loss of 82.11 million yuan in the third quarter, with accumulated losses reaching 242 million yuan in the first three quarters.
The disconnect between soaring order books and operational losses reveals the industry's core contradiction: technical feasibility has outpaced commercial viability. Industry insiders estimate that over 90% of current electric vertical take-off and landing aircraft (eVTOL) orders are non-binding letters of intent requiring no deposits, raising questions about the sustainability of the sector's apparent momentum.
Policy Support Intensifies as Capital Markets Cool
The low-altitude economy has retained its strategic priority status in 2025, with 31 provincial governments incorporating it into their annual work reports. More than 20 provinces have established dedicated low-altitude industry funds with total commitments exceeding 100 billion yuan, according to Oppa Fund chairman Jiang Mouyu speaking at the World Internet Conference's low-altitude economy forum.
Regional governments are deploying substantial financial incentives. Chongqing offers up to 10 million yuan for supporting ground station network infrastructure projects. Guangdong provides significant funding for provincial-level key laboratories in the low-altitude sector. Yunnan distributes 20 million yuan annually in consumption vouchers to stimulate activities like skydiving and low-altitude sightseeing. Sichuan supports companies tackling hybrid engines and high-energy-density aviation batteries with subsidies reaching 30% of project investment, capped at 20 million yuan.
Despite policy enthusiasm, capital markets have turned cautious. As of December 18, 2025, Zongshen Power Machinery fell 18.15% year-to-date, Wanfeng Auto Holding declined 21.19%, and CITIC Offshore Helicopter dropped 26.12%, contrasting sharply with broader market gains.
Primary market activity shows similar rationalization. According to IT Juzi data, financing events and amounts in the low-altitude economy sector fell 15.2% and 8% respectively in the first half of 2025. However, September alone saw 4.917 billion yuan in financing, indicating capital concentration toward companies with core technologies and clear business models.
Tianyancha Professional data shows China has over 97,000 registered low-altitude economy-related companies as of November 2025, with 24,000 new registrations this year. Guangdong province leads with over 12,000 companies, followed by Shandong with over 8,000 and Sichuan with over 5,200.
Application Scenarios Show Pyramid Stratification
The commercialization of low-altitude applications has accelerated in 2025, with scenarios emerging across logistics, emergency response, industrial inspection, and tourism. Industry observers note these applications form a distinct "pyramid" structure based on demand rigidity, cost recovery periods, and policy support.
The pyramid's base comprises industrial inspection and agricultural plant protection—mature applications that have transitioned from "optional" to "essential." DJI Technology subsidiary Tonghetai CEO Zhang Yuqin highlighted their "ground-air integrated intelligent inspection solution," which reduced inspection time for a cross-sea bridge project from 15 days to three days while achieving millimeter-level scanning.
In power grid inspection, drones equipped with high-definition cameras and infrared sensors improve efficiency fivefold while costing just 30% of traditional manual inspection. Agricultural plant protection drones have achieved over 60% penetration nationwide, with coverage reaching hundreds of millions of acres in major agricultural provinces like Xinjiang and Heilongjiang.
The pyramid's midsection features low-altitude logistics, a sector experiencing explosive growth. Shenzhen has established a logistics network covering the Greater Bay Area with cross-city maritime routes to Zhuhai, Zhongshan and Dongguan, achieving four-hour delivery times for Shenzhen-Zhongshan shipments. As of June 2025, Shenzhen's logistics drones completed over 730,000 flights in the Greater Bay Area, transporting 6.77 million packages weighing 1,898 tons.
Yunshu Smart Aviation's V500E model, with 500kg payload capacity and maximum flight speed exceeding 300km/h, demonstrates the sector's expanding capabilities. However, the company acknowledges that low-altitude logistics remains in the "starting phase of a 10,000-meter race," with airspace management, landing sites, and route planning remaining critical constraints.
The pyramid's apex includes emerging scenarios like low-altitude tourism and medical delivery. Dunhuang's "Flying Apsaras" project has completed over 10,000 flight hours and 80,000 flights, receiving over 300,000 tourists. Shenzhen's Shekou cruise terminal eVTOL test flight reduced Shenzhen-Zhuhai commute time to 20 minutes. Yet these applications face product homogenization, high operational costs, and uncertain consumer demand, requiring extended market cultivation periods.
Order Boom Masks Underlying Concerns
2025 has witnessed an order surge that reveals both industry potential and underlying fragility. At the International Low-Altitude Economy Expo, Chinese eVTOL giants made a blockbuster splash: TCab Tech secured China’s largest single eVTOL purchase order to date, with UAE-based Autocraft pre-ordering 350 E20 eVTOL aircraft worth US$1 billion for low-altitude tourism and air mobility in the Middle East and North Africa . Meanwhile, Volant Aero signed a landmark agreement with Thailand’s Pan-Pacific Company for 500 VE25-100 eVTOL units totaling US$1.75 billion — a record-breaking deal for China’s high-grade passenger eVTOL sector — to serve short-haul inter-island transport and emergency rescue in Thailand, the Maldives and other regions.
November 2025 became an "order carnival month." Wofei Changkong and Hualong Aviation confirmed orders for 50 units. Volant secured 95 units worth 2.375 billion yuan at the China International Import Expo. Fengfei Aviation's cumulative orders exceeded 2,000 units, while TCab Tech finalized 100-unit procurement agreements with Industrial and Commercial Bank of China Financial Leasing.
However, industry insiders caution that over 90% of current eVTOL orders are non-binding letters of intent without legal force or deposit requirements, representing ceremonial commitments rather than firm commercial transactions. This "order inflation" reflects manufacturers' need for data to support valuations and financing, while purchasers seek early positioning in future markets.
The contrast between order excitement and operational losses is stark. EHang's third-quarter net loss of 82.11 million yuan expanded 70.7% year-over-year, with nine-month accumulated losses reaching 242 million yuan. This disparity reveals the core contradiction between technical and commercial feasibility.
Despite order quality concerns, domestic companies have achieved substantive breakthroughs. Fengfei Aviation successfully delivered the world's first cargo eVTOL certified with Type Certificate, Production Certificate, and Airworthiness Certificate, establishing compliant mass production capabilities. XPeng AeroHT's "land aircraft carrier" flying vehicle production license application has been accepted, with planned annual capacity reaching 10,000 units targeting 2026 mass production.
Path from "Flying" to "Flying Well" Requires Systemic Solutions
Yunshu Smart Aviation identifies five major challenges facing eVTOL: "can't fly, unsafe flying, unprofitable flying, difficult flying, and uncoordinated systems."
Airspace restrictions, certification gaps, and infrastructure shortages prevent widespread operations. Most regions maintain strict approval systems with low authorization rates for flight plans. Most new aircraft types lack airworthiness certificates for legal operations. General aviation airports and landing sites remain scarce and unevenly distributed, creating "have aircraft, no launch sites" situations.
Safety concerns span multiple dimensions. Complex low-altitude environments with dense obstacles and variable weather increase accident risks. Many low-altitude aircraft lack reliable anti-crash systems and interference resistance. High research, development and manufacturing costs make services expensive, limiting market competitiveness. Constructing replicable, sustainable profit models remains a common challenge.
Operational inefficiencies stem from fragmented airspace management and aviation network fragmentation, complicating cross-regional flight coordination. The gap between systematic requirements and fragmented supply prevents establishment of mature "low-altitude ecosystems" supporting market-oriented, routine eVTOL operations.
For unmanned aerial vehicles, Tonghetai Robot CEO Zhang Yuqin emphasizes intelligence as the primary evolution direction, with inspection robots and aerial robots deeply integrating with embodied AI models toward "autonomous perception-autonomous decision-autonomous operation." According to the "Ground-Air Integrated Cluster Intelligent AI Scenario Solution White Paper," this solution's market scale will surge from 567.7 billion yuan in 2026 to 1.7 trillion yuan in 2030, becoming the core engine for low-altitude economy and robotics industry integration.
Guosen Securities notes that low-altitude economy development may parallel new energy vehicles but with faster growth cadence. Current eVTOL development resembles China's NEV sector during 2010-2012, when national strategy proposed automotive electrification transformation and designated NEVs as strategic emerging industries. eVTOL could accelerate cost reduction through key component reuse from NEVs, leveraging cost advantages for China's international competitive positioning.
The 2025 low-altitude economy has completed its critical leap from zero to one. Under dual drivers of policy dividends and market rationality, this trillion-yuan industry is experiencing crucial transformation from conceptual noise to commercial refinement. Capital market cooling coexists with commercial order fulfillment; technological breakthroughs proceed alongside operational losses, forming a complex yet authentic industry landscape.
Though challenges remain, direction is clear and the ecosystem is coalescing. This profound transformation affecting future transportation modes and industrial formats is accelerating across China's innovation landscape, writing a chapter in the journey from concept to trillion-yuan industry.