The rapid evolution of the aviation industry is reflected in recent developments within companies like Yingboer (300681.SZ), which has announced a new order for eVTOL (electric Vertical Take-Off and Landing) technology developmentOn January 13, the company revealed a collaboration with Eweis (Nanjing) Aviation Technology Co., LtdThis partnership is focused on creating high-performance integrated motor control products for Ewei's ET9 eVTOL aircraft seriesThe specifics related to model development, supply timelines, pricing, and quantities will be outlined in subsequent agreements.

This venture into the eVTOL industry signals a notable shift for Yingboer, whose primary line of business has traditionally centered on developing systems for electric vehiclesTheir product catalog includes components such as electric drivetrains, powertrains, electric motors, motor controllers, onboard chargers, and DC/DC converters specifically for the growing electric vehicle market

However, as competition in the electric vehicle sector intensifies, with profit margins hovering around 14% for their electric drive systems, the need for diversification becomes critical.

For Yingboer, moving from ground-based vehicles to aerial applications could unlock new growth trajectoriesThe eVTOL market—a burgeoning segment often touted as the next frontier in transportation—requires innovative technology that can integrate complex electronic systemsCurrent iterations of eVTOL technology necessitate multiple redundant propulsion systems, thus presenting significant opportunities for companies that can deliver reliable electric motor and control systems.

Industry insights also suggest that not all existing technology can simply be borrowed directly from the automotive sectorFor example, industry experts like Shi Hong, co-founder of Zero Gravity Aircraft, argue that if automotive components were directly adapted for eVTOL use, the overlap would be minimal—estimated at about 20%. However, if the technology evolves specifically for eVTOL applications, such as power systems and flight control, this compatibility could reach upwards of 70%.

Moreover, as the eVTOL technology is still in its infancy, the experience related to aircraft design parameters is relatively limited

The flight control systems, which are crucial to operational success and safety, differ vastly from traditional systems used in commercial airliners such as the Boeing 737 or Airbus A320. According to Zhou Hualin, a director at Dixun Investment, eVTOL flight control systems must prioritize lightweight design and high stability, which cannot be achieved by merely adopting existing commercial aircraft solutionsInstead, they require simplified control devices distinct from conventional helicopter mechanical controls.

Yingboer has consistently expressed its ambitions to expand its footprint in the low-altitude aircraft marketTheir drive systems boast features such as miniaturized design, lightweight construction, and intelligent integration, which are pivotal for the evolution of eVTOL technologyThere is palpable anticipation that Yingboer's power systems will significantly contribute to advancements in this emerging sector.

Perhaps most significant is the deeper alliance with EHang, a leader in the eVTOL space

On January 8, Yingboer and EHang announced the formation of a joint venture, with Yingboer holding a 60% stake, responsible for components production and process optimization within EHang's production facilitiesThis partnership is poised to bolster overall manufacturing capabilities, facilitating the delivery of eVTOLs, with EHang having already delivered 138 units within the first three quarters of 2024. Upcoming years are expected to see substantial increases in production as a result of this collaboration, fostering growth within the industry supply chain.

In a strategic partnership highlighted in November 2024, Yingboer and EHang publicly committed to collaborating on the development of power systems for eVTOL products, reversing typical supply chain roles where EHang primarily handled assembly and salesAdditionally, Yingboer secured a substantial investment in EHang’s parent company, EHang Holdings Limited, contributing $12.6 million via a private placement—further solidifying its role within the critical phases of eVTOL development.

This partnership emphasizes the broader concept of collaborative growth within the eVTOL ecosystem

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EHang's chairman, Hu Huazhi, remarked that achieving high-quality development within the low-altitude economy is not the responsibility of a single entity but rather requires collective progress across the entire supply chainEHang's focus on technological innovation in the eVTOL space aims not only to enhance aircraft flight performance but also to stabilize and develop the supply chain.

Despite the promising future the collaboration with EHang may signal, market reactions have been somewhat muted thus farYingboer’s stock price has remained fairly stable, fluctuating between 20 and 30 Yuan per share, even after the announcement of the joint venturesHowever, following recent news, the stock experienced a notable surge, closing at 27.02 Yuan per share on January 14, demonstrating a daily increase of nearly 13% and lifting the company’s market capitalization to approximately 6.913 billion Yuan.

As the eVTOL sector continues to advance, the intersection between ground-based electric vehicle technology and aerial innovation may be the key to unlocking the future of personal and commercial transportation