Chinese firm EHang wants the world to see it’s a going concern. And so it has released photos of its new facility that’s being completed in the city of Yunfu. There’s a reason why these pictures are coming now.
We’ve written about EHang before. The Chinese company has been something of a visionary firm when it comes to Urban Air Mobility. Specifically, it’s known for its EH216, a fully autonomous drone built to carry two passengers or equivalent cargo. It calls this machine an Autonomous Aerial Vehicle, or AAV. The design has been tested extensively, including many manned flights inside China. It’s also doing testing in Europe and Canada, eyeing a not-so-distant future when you’ll be able to hail one of these to a pick-up spot using a phone app.
But it hit a rough patch this week.
Everything had been going great for EHang. Its EH216 had received a lot of coverage in recent months, with flights in multiple countries. It also released videos showing passengers taking flight in the autonomous aircraft. Urban Air Mobility, in certain circles, started to become a buzzword:
And investors noticed. Though there are many companies circling around this space, EHang is clearly one of the leaders, if not the leader globally. Yes, there are other companies that have aircraft. But we haven’t seen any others carrying out manned flights at a pace like EHang.
As a result, its stock began to really climb. In August 2020, its stock was about $8.32. Recently, it reached $129.80 per share, and seemed poised to keep on climbing.
But then came this report, with the following preface:
Today, we reveal why we believe EHang NASDAQ: EH is an elaborate stock promotion, built on largely fabricated revenues based on sham sales contracts with a customer who appears to us to be more interested in helping inflate the value of its investment in EH i.e., pump EH’s stock price than actually buying its products. EH has perpetuated its story with a collection of lies about its products, manufacturing, revenues, partnerships, and potential regulatory approval of its purported main business, an ‘autonomous” aerial vehicle “AAV’ ridesharing network.Wolfpack Research
The company recommended short-selling the stock.
One report, and EHang stock started to plummet. Take a look at this five-day graph:
In a single day, more than 50% of the company’s market capitalization was wiped off the board. Its stock has recovered slightly, but is still at roughly half of what it was just a few days ago.
EHang fights back
EHang denies the allegations contained in the report, and has been steadily trying to refute the charges. It has also been attempting to regain control of the narrative to help get things back on track. Today, it released a number of details about its massive new manufacturing facility, which is still being completed. It also released a number of photos, which show a clearly massive building with an astroturf landing pad out front (pictured above).
The building is 24,000 square meters – more than 250,000 square feet. Its news release explains what will take place in that facility when it opens:
It will be the home to EHang’s newest aerial vehicle assembly lines, a Computer Numerical Control (CNC) processing center, a painting workshop, and a carbon fiber composite materials processing area. In addition, the Yunfu facility will include a research and training center and an outdoor flight test vertiport. Upon completion, the Yunfu facility will play a major role in producing EHang’s flagship products, the EH216 series of passenger-grade AAVs, with a planned initial annual capacity of 600 units which can be further increased to support the growing global market needs. EHang expects that it will be the first AAV commercial production facility of this scale.
The EHang release also announces that it’s going to be inviting investors to come and tour the facility. That way they’ll be able to see for themselves precisely what the company is doing and ask questions onsite. EHang anticipates this event will happen in late June, and will be offering more details as the date draws closer.
Still on track
Though it’s been a stinging week for EHang, stocks do tend to recover. And – at least from our vantage point – EHang remains poised to become a leader when the era of passenger-carrying drones launches in select cities a few years from now.
The company is working out of its existing facility in Guangzhou, which is some 8,750 square meters (94,000 square feet). The company will migrate its production and R&D efforts to the new location once it opens.