A flying vehicle unicorn is being born

Author | Chai Xuchen

Editor | Wang Xiaojuan

XPeng's million-dollar flying car has appeared alongside the "three-piece set" of Lujiazui.

On December 14th, XPeng Huitian's flying car, positioned as a "land aircraft carrier," successfully completed its test flight in Shanghai's core business district of Lujiazui, showcasing its capabilities in the booming low-altitude economy sector. This also means it has taken another step closer to entering the market to disrupt the million-dollar car and flying vehicle sectors.

It is understood that this is their self-developed split-type flying car. On-site, the "land aircraft carrier" not only completed the takeoff and landing of the aircraft part but also demonstrated how it can be stored in the trunk of the car's "mother ship."

This combination of "cyber pickup" and manned aircraft resembles a "big toy," and it is prepared to compete with million-dollar brands like Porsche and Mercedes-Benz G-Class at a price of less than 2 million yuan, aiming to win the hearts of the wealthy. Having long been immersed in the mainstream mass market, XPeng has thus entered the million-dollar luxury car club.

Currently, XPeng Huitian has over 3,000 orders in hand. In an interview, XPeng Huitian founder Zhao Deli revealed to Wall Street Insights that users are eagerly awaiting delivery. In his view, there is no shortage of wealthy consumers in China, and top luxury brands like Porsche, Lamborghini, and Mercedes-Benz have significant market shares; globally, the million-dollar luxury car market has a scale of over a million units per year.

The reason for quickly captivating the market lies in XPeng Huitian's grasp of the flying car route.

XPeng Huitian Vice President Qiu Mingquan stated that the company began exploring low-altitude flying vehicles in 2020 and has the capability to create different configurations. The decision to develop a split-type flying car is a reflection of strategic focus. In his view, the various flying and operating costs of tilt-rotor and integrated flying vehicles are currently very high, making them not the best route for commercialization for startups.

Zhao Deli candidly stated that the existing split-type "land aircraft carrier" does not need to rely on airports for storage, and more importantly, the learning cost has been significantly reduced, "5 minutes to get started, 3 hours to become proficient." There are no fixed flying site restrictions, allowing drivers to enjoy sightseeing flights in multiple locations, addressing the pain points of past general aviation aircraft.

"The future is bright, but we need to live in today," Zhao Deli said. In the coming years, we need to focus on product delivery, nurturing the supply chain, and cultivating aviation culture. We will start with outdoor flights to let everyone play with it, and then when people accept this concept, costs will come down as scale is achieved.

Of course, creating "big toys" for the wealthy is just the tip of the iceberg of XPeng Huitian's ambitions. Zhao Deli revealed to Wall Street Insights that the company is also simultaneously developing a tilt-rotor aircraft aimed at long-range commuting, internally referred to as the airborne "Alpha" (codename X5). He stated, "We are making money selling cars with the 'land aircraft carrier,' and in the future, we aim to sell 10,000 units a year with 10 billion yuan in revenue while reserving tilt-rotor technology."

XPeng Huitian's concept is basically taking shape, and the low-altitude flying sector it is targeting is backed by a trillion-level blue ocean market Li Jian, former deputy director of the Civil Aviation Administration of China, stated that the scale of the low-altitude economy is approximately 3.2 times that of the high-altitude economy. The economic scale of China's existing civil aviation high-altitude transportation network is 17 trillion yuan, and it is estimated that the scale of the low-altitude economy can reach 50 trillion yuan, while China's total GDP last year was 126 trillion yuan.

Looking domestically, there are not many industries with such a huge scale and significant growth potential, which may present an opportunity for XPeng Huitian and players in the same field to overtake on a curve.

Zhao Deli stated that the "land aircraft carrier" is currently preparing intensively for TC certification through the Civil Aviation Administration, striving for delivery in 2026. In the capital market, the company has already raised $700 million and has plans for independent listing in the future.

A unicorn in the automotive and aircraft sector seems to be quietly emerging.

The following is a transcript of the conversation with Zhao Deli, founder of XPeng Huitian, and Qiu Mingquan, vice president (edited):

Q: What is the potential for collaboration with XPeng Motors in the future?

Zhao Deli: Firstly, XPeng Motors can empower Huitian, for example, in areas such as supply chain, autonomous driving, and power technology, which can be shared. In terms of subsequent marketing services, we may sell in some of XPeng's large marketing centers.

Q: Will there be greater potential in performance with power batteries as core components?

Zhao Deli: Battery technology will continue to advance; it is a technology driven by demand. Currently, in the low-altitude economic ecosystem, batteries are a shortcoming. Pure electric vehicles may not fly far enough, but since there is a long-range demand, batteries will certainly continue to iterate. We are very willing to collaborate with major manufacturers; we provide the demand and work together on R&D. Once the technology is safe and reliable, we will apply it.

When we develop products, we always need to consider whether the technology is mature and safe, but we have teams internally conducting forward-looking explorations.

Solid-state batteries can double the range, which is extremely valuable for users. However, everyone is still in the laboratory stage. Once it can be mass-produced at a reasonable price, we will definitely consider it; we are also continuously monitoring hydrogen, aluminum, and other fuel cells. If they can be mass-produced and widely used in the next two to three years, we will also consider them.

Q: Will flying cars primarily be unmanned or manned in the future?

Zhao Deli: It's hard to judge. Unmanned driving will face significant challenges. I believe that for a long time, it will be a combination of human and machine driving. Strong intelligent driving capabilities can reduce the difficulty of operating the aircraft. However, humans have the primary authority, just like in current civil aviation, where personnel ensure safety during takeoff and landing, while the machine handles the cruising phase. But I believe that one day, unmanned driving will be realized.

Q: What will the evolution of aircraft configurations look like in the future?

Zhao Deli: The products we develop still need to consider demand and which market to target. Our multi-rotor product is aimed at slow aerial tourism, with advantages in hovering capability and acceleration performance. However, if one day I need to commute quickly, this model will not be sufficient. Therefore, our second product is a long-range model, which we call the "Air Alpha," capable of carrying six people and flying 500 kilometers at a speed of 360 km/h Q: Why did we choose tilt-rotor for our second product?

Zhao Deli: To solve transportation problems, such as flying from Guangzhou to Hunan, this type of product needs to fly fast. Multi-rotor and compound wings cannot meet the speed requirements; only tilt-rotor can achieve a speed of 350 kilometers per hour.

If it flies slowly, and the aircraft is small without even a toilet, the user experience will not be good, so it absolutely cannot exceed two hours. In terms of price, we hope it will be slightly more expensive than taking a dedicated car, but not too much.

Our strongest point now is our overall capability. We have the strongest power team in China and even in all of Asia. The motor and electronic control are all self-developed, with a thrust-to-weight ratio of 1:12, and we have also reserved core technologies such as flight control and navigation. Our simulation capabilities have improved, so in these areas, our development will have fewer detours than before, and the R&D cost of the second product should not exceed that of the "land aircraft carrier."

Q: When is the expected certification and market launch for the second product?

Zhao Deli: We definitely hope to be as quick as possible, but the safety requirements will be very high. After all, flying over cities requires addressing noise, safety, and cost issues. We plan to achieve this before 2030.

Q: Many manufacturers are also working on tilt-rotor aircraft, and some say they can get certified by 2028. What advantages do we have compared to them?

Zhao Deli: Just like the early days of new energy vehicles, this is an era of a hundred flowers blooming and a hundred schools of thought contending. Many companies will eventually emerge. Who can succeed depends on whose commercialization can be closer to consumers. We all know that technological innovation, especially when engineers are involved in product development, tends to pursue technology, but for the general public, it’s all about being affordable and user-friendly.

The low-altitude market is large enough, much larger than the drone sector, and many car manufacturers, as well as tech giants like DJI or Huawei, may also participate in the future. At this time, we hope to find our positioning within it, which is very important.

Qiao Mingquan: Since 2020, we have been exploring and have the capability to develop different configurations, including tilt-rotor, split-type, and integrated-type. But why did we ultimately choose to develop a split-type flying car? Because in the short term, when the main flying scenarios are limited, even if we develop a tilt-rotor, it would be at a disadvantage without flight routes and fully open airspace. Therefore, our three-step strategy is based on our judgment of the future.

Zhao Deli: Also, in terms of scale, for example, the annual sales of competitor products are not high; the top helicopter Bell sells less than 100 units a year at 13 million yuan each. So the future looks bright, but we need to live in the present. In the next few years, we need to first deliver products, cultivate the supply chain, and foster an aviation culture. We will start by flying in the wild to let everyone play with it, and then when everyone accepts this, the scale will form, and costs will come down.

Q: What is XPeng Huaitian's overall layout in the low-altitude economy?

Zhao Deli: Our current plan is for two products because startups have limited resources, and overthinking is useless. Given our existing resources, we will fully focus on achieving mass production and delivery of the "land aircraft carrier," truly aiming to sell 10,000 units a year and achieve 10 billion yuan in revenue. At the same time, we have a dedicated team developing the tilt-rotor long-range flying car X5 (internal code name) to ensure we have the technology reserves for tilt-rotor Question: What are the main concerns of users regarding the "land aircraft carrier"?

Zhao Deli: The primary concerns of users are delivery time, safety assurance, where they can fly, and how easy it is to learn. The first batch of users enjoys outdoor activities, flying, and trying out new technology, and they may have two to three cars at home, as long as the total does not exceed 2 million yuan.

Regarding delivery, we plan to obtain TC certification in the fourth quarter of next year and achieve delivery in 2026; concerning flying, we currently have over 200 flying camps, and our aircraft can be mastered in 5 minutes and become proficient in 3 hours.

Question: Many audience members on-site are very interested in the "land aircraft carrier" itself. Will you consider launching a separate automotive product in the future?

Zhao Deli: Our company currently has only over 1,000 people in R&D and does not have the energy to venture into automobiles. With limited resources, we will focus on aircraft; otherwise, it would be redundant with XPeng. They may use our platform to produce two or three cars in the future, and XPeng will also pursue an extended-range route.

Question: What is the financing plan for Huitian? Is there a plan for an IPO?

Zhao Deli: We are currently focused on accepting strategic investments, and we have officially announced a total financing of 700 million USD, with 150 million raised this year. There will be plans for an IPO, but the timing is yet to be determined.

Question: Will we consider having Huitian's own battery swap stations/charging stations and service areas?

Zhao Deli: Regarding battery swapping, due to the characteristics of aircraft, lightweight design is crucial. The fasteners and structural components required for battery swapping would increase the weight by several dozen kilograms. Currently, the 800V high-voltage system charges quickly, allowing a full charge for one flight in 20 minutes. Our vision is to be a global leader in low-altitude product creation, focusing on product development rather than operations. This part of the revenue should not be ours; we will help partners build ecological capabilities.

Question: Among the bulk orders signed at the Zhuhai Airshow, how many are intention orders and how many are confirmed orders?

Zhao Deli: We will conduct pre-sales next year, and these orders are essentially confirmed from our perspective. They are eager to start operations as soon as possible. Currently, there are no overseas orders for ToB, but there are overseas individual users who have booked our "land aircraft carrier." Next year, we will also consider overseas pre-sales, but our main focus will still be on the domestic market.

Question: In the current consumption context, how is the sales target of 10,000 units calculated?

Zhao Deli: I believe the decline in luxury car sales is due to the increasing quality of China's new energy vehicles, which offer intelligent driving and luxury configurations for around 300,000 to 400,000 yuan. However, if there is a technological product that can provide a unique experience, combining both a car and an aircraft, there is significant imaginative potential.

In the global consumer market, there are 90 million cars sold annually, with over a million luxury cars sold each year. There are quite a few wealthy individuals in China with purchasing power, and we will also introduce installment financial products in the future