XPeng AeroHT, a subsidiary of the electric vehicle startup, aims to sell a dual-mode electric vertical take-off and landing (eVTOL) vehicle, which can drive on land like a car and detach a flying module for air travel.
"Normal eVTOL vehicles cannot drive on the ground, but our model is dual use," said Qiu Mingquan, vice president at XPeng AeroHT.
The Civil Aviation Administration of China has begun its type certification review for the aircraft, a requirement for commercial operation.
XPeng AeroHT will begin accepting pre-orders in China as early as October, with plans to begin mass production as soon as next year. Demand is expected from tourism-related companies and outdoor enthusiasts.
The aircraft will be priced in the 1 million yuan ($138,000) range. Qiu said the company hopes to eventually bring the price down into the hundreds of thousands of yuan.
"If large-scale mass production becomes possible, we can dramatically reduce costs" for materials like carbon fiber, he said.
The company plans to expand overseas. "The Middle East is an important market for us, given the level of regulation, openness to new things and cost," Qiu said.
The company also aims to commercialize an integrated dual-use eVTOL aircraft that does not require separation, in which the flight propeller is folded and stored on top of the vehicle when driving. A concept model was shown at a Las Vegas technology trade show in January.
EHang obtained type certification for its EH216-S model in October. The two-seater can fly for 25 minutes on a single charge. It went on sale on April 1 for 2.39 million yuan in China and $410,000 elsewhere.
Last month, the startup received authorization to mass produce the aircraft. It hopes to partner with hotels and other businesses to commercialize tourism services.
"We have received inquiries from the Middle East and Southeast Asia," said Vice President He Tianxing.
China accounts for 50% of the world's total eVTOL models, according to a China Merchants Securities report last month, far above the U.S.'s 18% and Germany's 8%.
Behind the rapid progress of China's flying car sector is the accumulation of EV-related technologies, including batteries.
Batteries for eVTOL vehicles are said to require a high energy density of over 400 watt-hours per kilogram of weight. Chinese battery makers like CATL, the global leader in vehicle batteries, are developing products for eVTOL aircraft, giving Chinese manufacturers an advantage in procurement.
Many technologies can be shared between the automotive and eVTOL businesses. CITIC Securities said that "weight-reducing automobile manufacturing technology is supporting the realization of flying cars."
Major state-owned automaker Guangzhou Automobile Group is developing the GOVE eVTOL vehicle, in which the aircraft section separates from the vehicle's chassis, with test flights to begin next year.
Geely subsidiary Aerofugia makes an eVTOL aircraft that can seat six people and fly long distances.
Many Chinese cities contend with serious traffic jams, raising expectations for eVTOL vehicles to offer alternative means of transportation and logistics.
The eVTOL, drone and helicopter businesses in China are collectively known as the low-altitude economy. The Chinese Communist Party said at a conference in December that it would work to foster the low-altitude economy this year, along with the biotech and space industries.
Local governments are also providing support. Shenzhen began measures in December to support companies in the field to boost capital and expand production. Guangzhou has also announced plans to set up an area for field tests for related businesses.
However, hurdles to widespread use remain. There are still few takeoff and landing points, and traffic rules for individual drivers are not yet in place.
"We will be forced to fly relatively infrequently for the next few years," said an eVTOL company executive.
Generating profit is also not easy. EHang incurred a net loss of 300 million yuan last year. Companies are not yet able to realize cost reductions from mass production.
In November, U.S. short seller Hindenburg Research questioned the validity of EHang's type certification and preorder figures, accusations that the company denied.
To capture a wide range of demand, makers of eVTOL aircraft are eyeing overseas markets.
The global eVTOL market is expected to reach $23.4 billion in 2030, about 19 times the size last year, according to research companies Global Information and MarketsandMarkets. In addition to China, growth is expected in North America, Europe and the Middle East.
To carry out commercial operations overseas, type certifications are necessary from each country. U.S. startup Joby Aviation has already applied for certification in the U.S., the U.K. and Japan.