EHang Holdings Limited (“EHang” or the “Company”) (Nasdaq: EH), the world’s leading autonomous aerial vehicle (“AAV”) technology platform company, announced its unaudited financial results for the fourth quarter and fiscal year ended December 31, 2022.

Financial and Operational Highlights for the Fourth Quarter 2022

• Total revenues were RMB15.7 million (US$2.3 million), representing a growth of 90.7% compared to RMB8.2 million in the third quarter of 2022.
• Gross margin was 66.1%, representing a continued high gross margin level with a slight increase of 0.2 percentage points compared to 65.9% in the third quarter of 2022.
• Operating loss was RMB92.2 million (US$13.4 million), compared with RMB73.7 million in the third quarter of 2022.
• Adjusted operating loss¹ (non-GAAP) was RMB61.3 million (US$8.9 million), compared with RMB52.9 million in the third quarter of 2022.
• Net loss was RMB110.1 million (US$16.0 million), compared with RMB76.5 million in the third quarter of 2022.
• Adjusted net loss² (non-GAAP) was RMB59.4 million (US$8.6 million), compared with RMB55.1 million in the third quarter of 2022.
• Cash, cash equivalents, restricted cash and short-term investments balances were RMB249.3 million (US$36.1 million) as of December 31, 2022.
• Sales and deliveries of EH216 series AAVs³ were 6 units, compared with 4 units in the third quarter of 2022.

Financial and Operational Highlights for the Fiscal Year 2022

• Total revenues were RMB44.3 million (US$6.4 million), compared with RMB56.8 million in 2021.
• Gross margin was 65.9%, representing an increase of 2.5 percentage points from 63.4% in 2021.
• Operating loss was RMB304.0 million (US$44.1 million), a 5.2% decrease from RMB320.5 million in 2021.
• Adjusted operating loss (non-GAAP) was RMB207.1 million (US$30.0 million), compared with RMB199.4 million in 2021.
• Net loss was RMB329.3 million (US$47.7 million), compared with RMB313.9 million in 2021.
• Adjusted net loss (non-GAAP) was RMB206.2 million (US$29.9 million), compared with RMB192.8 million in 2021.
• Cash, cash equivalents, restricted cash and short-term investments balances were RMB249.3 million (US$36.1 million) as of December 31, 2022, compared with RMB312.1 million as of December 31, 2021.
• Sales and deliveries of the EH216 series AAVs were 21 units in 2022, compared with 30 units in 2021.

Business Highlights for the Fourth Quarter 2022 and Recent Developments

•   EH216-S Type Certification Process Over 90% Completed

In the fourth quarter 2022, the EH216-S Unmanned Aircraft System (“UAS”) TC process with the Civil Aviation Administration of China (“CAAC”) has progressed into the final phase of Demonstration and Verification of Compliance. Although the original schedule was impacted and delayed by the resurgence of COVID-19 in mainland China in December 2022, the TC project had accelerated onto a fast track.

In February 2023, the CAAC officials and its appointed TC team of experts inspected the ongoing flight tests in Hezhou, which is one of China’s 20 Unmanned Civil Aviation Experimental Zones approved by the CAAC. Both the current EH216-S airworthiness certification results and the following operation plan have been reviewed and discussed with the CAAC.

At present, several EH216-S conforming aircraft, which were manufactured in EHang’s Yunfu production facility, have successfully passed the manufacturing conformity inspection by the CAAC and are undergoing required compliance tests at flight bases in Guangzhou and Hezhou as well as laboratories in other locations. Based on the CAAC-agreed compliance test plans, more than 70% of tests have been or will be completed soon, including laboratory tests, ground tests and inspections, flight tests and data analysis. The Company is making all efforts to conclude remaining tests as soon as possible.

As of today, more than 90% of the entire TC process has been completed, which is believed to be the fastest progress among all TC projects of electric vertical take-off and landing (“eVTOL”) aircraft worldwide.

•   EH216 Trial Operations Expanded Stably in China

Under the CAAC’s guidance and the Company’s 100 Air Mobility Route Initiative, EHang, along with its customers and partners, have developed a total of 18 trial operation spots across 16 cities in China during the past two years. More than 8,200 safe operational trial flights have been completed by EH216 AAVs for aerial sightseeing at these spots.

•   Strategic Partnership with Qingdao West Coast New Area and US$10 Million Investment

In December 2022, EHang formed a strategic partnership with Qingdao West Coast New Area, one of China’s national new areas in Shandong province. This partnership comes with a US$10 million investment into the Company, and a potential additional investment of US$10 million in the future. With the goal to make Qingdao a world-class Urban Air Mobility (“UAM”) application demonstration area, Qingdao West Coast New Area will facilitate the local governments’ applications of EHang’s full range of products and solutions. The aggregate value of product demands resulting from this partnership is estimated to be approximately RMB100 million (US$15 million) within two years. In addition, the partnership is expected to provide comprehensive support to the Company’s local business operations, sales and services, production and infrastructure construction, among other things.

•   Cooperation with Xiyu Tourism to Jointly Develop Aerial Sightseeing in Xinjiang

In March 2023, Xiyu Tourism Development Co., Ltd. (300859.SZ) (“Xiyu Tourism”), a leading tourism company in Xinjiang, announced that it intends to sign a cooperation framework agreement with EHang. The purpose of the cooperation is to set up a joint venture to develop low-altitude tourism and sightseeing projects with EHang AAVs in the Heavenly Lake of Tianshan, a national 5A-class tourist attraction, and other scenic areas in Xinjiang. The parties plan to operate a minimum of 120 units of EH216-S or EHang’s comparable passenger-grade AAVs in the next five years.

•   Strategic Partnership with XAIC and Indicative Purchase Order for 20 Units of EH216-S

In March 2023, EHang reached a strategic partnership agreement on UAM and smart city management with Xi’an Aerospace Investment Technology Innovation Development Holding Group Co., Ltd., a wholly-owned subsidiary of Xi’an Aerospace Investment Co., Ltd. (“XAIC”) which is sponsored by the Xi’an municipal government. Under this partnership, EHang received an indicative purchase order for 20 units of EH216-S, the fulfillment of which is expected to be completed by 2025.

•   Partnership with Swire Group’s HAECO for Advanced Air Mobility

In October 2022, EHang signed a memorandum of understanding regarding the partnership with Hong Kong Aircraft Engineering Company Limited (“HAECO”), a world leading aircraft engineering and maintenance company and a subsidiary of Swire Group. The two parties plan to cooperate in multiple areas such as manufacturing and assembly, continued airworthiness, digital platforms, aircraft maintenance, and talent training. The focus of this partnership is to co-develop systems and solutions that meet the needs of continued airworthiness and after-sales maintenance services in preparation for EH216’s commercial operations.

•   EH216 First Passenger-Carrying Demonstration Flight in Japan

In February 2023, EH216 completed its first passenger-carrying autonomous flight demonstration within Japan, which also marked the first passenger-carrying flight of an autonomous eVTOL aircraft in Japan. The EH216 flew with two passengers onboard without pilot for a trip along the stunningly beautiful coastline of Tanoura Beach in Oita city, under the approval of the Ministry of Land, Infrastructure, Transport and Tourism of Japan.

•   EH216 Maiden Flight by Spanish National Police to Initiate Trial Operations in Spain

In December 2022, EH216 completed its maiden flight by the Spanish National Police (“SNP”) at the National Academy of Police in Ávila, Spain, to initiate its trial operations by SNP in Spain. By leveraging and joining forces with EHang since October 2021, SNP plans to utilize EH216 for emergency and public safety missions, such as accessing contaminated areas with nuclear, radiological, bacteriological or chemical risks, landing in confined areas, aerial logistics, and other police services that may require agile and efficient aerial mobility.

•   EH216 Flight Demonstrations in Spain under EU SESAR AMU-LED Project

In October 2022, EH216 successfully completed flight demonstrations in Spain under the European Union (“EU”)’s Air Mobility Urban – Large Experimental Demonstration (“AMU-LED”) project, one of Europe’s largest UAM demonstration projects. These flight demonstrations verified and validated the UAM Concepts of Operations in the furtherance of the AMU-LED project objectives.

•   Participation in EUSPA Project SAMVA for EGNOS Adoption in Advanced Air Mobility

In November 2022, EHang participated in the SBAS (EGNOS) Adoption in Multicopter VTOL Aircraft (“SAMVA”) project. Under an initiative of the European Union Agency for the Space Programme (“EUSPA”), the SAMVA project is for deploying European Geostationary Navigation Overlay Service (“EGNOS”) on eVTOL aircraft operations, such as EH216 AAVs, to enhance advanced air mobility services and U-Space airspace integration across the continent.

•   Appointment of Nick Ning Yang as Independent Director

In December 2022, Mr. Nick Ning Yang was appointed as a new independent director to the Company’s Board of Directors, effective December 5, 2022. Mr. Yang is a renowned serial technology entrepreneur and investor with successes across the U.S. and China. He is a founding Partner of LeBox Capital, a venture investment fund established in 2011 that focuses on early-stage high growth TMT companies in China. Prior to that, Mr. Yang served as an executive of KongZhong Corporation, Sohu and ChinaRen.com.

CEO Remarks

Mr. Huazhi Hu, EHang’s Founder, Chairman and Chief Executive Officer, said, “2022 was a challenging year with uncertainties, but we focused on executing our strategies and made positive progress in EH216-S type certification with the CAAC, alongside significant market expansion in China and other Asian countries, laying a solid foundation for our upcoming post-certification entry into the market and commercial operations with our cutting-edge AAV products and UAM solutions.”

“In 2023, we are getting well positioned to leverage China’s tourism and economic recovery, growing market demands, and our imminent inflection point into commercialization with keen anticipation for obtaining the world’s first autonomous eVTOL type certificate, to unlock an exciting new era of the UAM industry that EHang is leading.”

Business Outlook

Driven by the post-epidemic recovery in travel, tourism and the economy in general, increasingly favorable policies on the UAM industry, and the expected upcoming completion of EH216-S type certification, the Company has been receiving growing inquiries, demands and orders from government and enterprise customers for AAV uses in aerial tourism, urban transportation, emergency rescue, smart city management, etc. Currently, the Company’s EH216-S order pipeline has reached over 100 units and been growing in China. Most of these orders are conditional upon the Company’s completion of the type certification and expected to be fulfilled within one to three years following such completion.

The above outlook is based on information available as of the date of this press release and reflects the Company’s current and preliminary expectations regarding its business situation and market conditions. The outlook is subject to changes, especially uncertainties and situations related to the EH216-S certification process, epidemics, political and economic landscape, etc.

This press release was prepared and distributed by EHang.