Drone Taxi Company Ehang Goes Public, Announces Pricing of IPO
BY Zacc Dukowitz18 December 2019
Drone company Ehang recently announced pricing for its Initial Public Offering (IPO), which began trading on the Nasdaq under the symbol “EH” on December 12, 2019.
In its IPO, Ehang offered 3,200,000 American Depositary Shares (“ADSs”) representing 6,400,000 Class A ordinary shares at a public offering price of $12.50 per ADS.
Photo credit: Ehang
In the press release announcing the IPO, Ehang describes itself as an autonomous aerial vehicle (AAV) technology platform company. But their primary focus is on autonomous passenger drones, or drone taxis.
Ehang’s IPO seems like a signal that drone taxis may be on the path to becoming a reality. After all, if people are willing to put up money for the idea, then there must be something there. Right?
Maybe. Some speculate that Ehang is going public too early, and may be doing so because it’s in need of cash. It will certainly be interesting to see how successful the IPO is.
Shift from Drones to Drone Taxis
Ehang first made headlines in the drone industry in February of 2017 for reportedly flying 1,000 of their Ghost drones at once in Guangzhou, China.
At the time, they claimed they’d beat the existing Guinness record for most drones flown at the same time. Up until then, that record had been held by Intel, for a simultaneous flight of 500 drones. (It turns out Ehang hadn’t beat Intel’s record—we reached out to Guinness at the time and they said they had no official record of Ehang’s 2017 drone swarm in Guangzhou.)
Also in February of 2017, Ehang was in the news for announcing a drone taxi program they claimed would be launched in Dubai that summer. The taxi drone they planned to use for the program was the Ehang 184, which made a big splash at CES 2016.
2017 was a big year for drone taxis in general. Uber, AirBus, and Ehang all made announcements that made it seem like we might be traveling through the skies in an autonomous passenger drone any day now.
But despite the hype, nothing ever materialized. Ehang’s drone taxi program in Dubai never launched, nor did any of the other programs we read about from other companies, and drone taxis seemed to fall out of the headlines.
Until now. In addition to its IPO news, Ehang recently revealed that they were very close to commercial production of passenger drones at Amsterdam Drone Week.
We want to provide the benefits of a helicopter for everyone. We don’t want to build a toy for rich people. We want to make it available for everyone to use.
– Andreas Perotti, Director of Marketing & Communications at FACC AG (Ehang’s European Production Partner)
Unlike the 184, which was a quadcopter, EHang’s new passenger drone is an octocopter. It’s made to carry two people as well as a moderate amount of luggage.
Photo credit: Ehang
The current model will sell for about $300,000 Euros, but the company has shared intentions of lowering that price with future models, with the aim of getting it down to the cost of a high-end sports car.
About Ehang’s IPO
Ehang is one of the first companies that focuses only on drones and drone technology to go public, which in and of itself is big news. To our knowledge, it is also the very first company with a primary focus on drone taxis to offer an IPO.
Photo credit: Ehang
When Ehang first announced the intention of going public in early November they planned to offer $100 million depository shares.
A month later, that amount had dropped to $43 million.
Responding to the news of Ehang’s IPO, some financial analysts have expressed reservations about investing in the company given that they currently have few clients, they’re unprofitable, they haven’t sold many autonomous vehicles yet, and their revenue declined from 2018 to 2019.
In 2018 the company made $9.7 million in revenue, with over 90% of that money coming from “smart city management” and “aerial media solutions”—that is, not from taxi drones. Further, although they made $9.7 million in 2018, they lost $11.7 million.
Here is a list of what Ehang currently has, according to Morning Brew:
- 38 AAV deliveries to customers for testing, training, and demonstrations
- 28 unfilled AAV purchase orders
- Two command-and-control centers
- 125 R&D people working on proprietary autopilot software and on-the-ground infrastructure
Do you think Ehang’s IPO means that drone taxis might actually become a reality soon? Share your thoughts in this thread on the UAV Coach community forum.