The emerging sector known as the low-altitude economy has captured significant attention, drawing players from various fields into what can be described as two distinct dimensions of perception and expectationThis concept, which primarily revolves around eVTOL (electric vertical take-off and landing) aircraft, serves as a focal point for discussions and opinions among industry experts, venture capitalists, and governmental entities.

In light of recent events, particularly the bankruptcy filing of the German eVTOL firm Lilium due to a shortage of funds to sustain its operations, the contrasting reactions from those involved in this sector have become apparentInterviews conducted by media organizations have unveiled a stark divide in perspectives, revealing a chilling skepticism from some while others remain upbeat about the potential of the low-altitude economy.

On one side of the spectrum are the cautious, often termed as digital realists or prudent investors, who have begun to question the viability of the eVTOL business model perpetuated by optimism over the technology's futureOne notable opinion comes from Peng Fei, the Vice President of Huakong Fund, who articulated that the dream of large-scale commercialization in the eVTOL industry is still far offHe remarked that no nation has successfully implemented widespread commercial applications for eVTOL vehicles. “The entire industry is still in a stage of technological iteration… or simply put, it is continuously burning cash,” he noted, emphasizing the challenges faced by startups in securing continual funding.

The precarious situation of Lilium corroborates his analysis, as the company, founded in 2015, underwent multiple funding rounds before ultimately succumbing to financial woesDaniel, the founder, attributed his company's struggles to a lack of sufficient government backing and loan support, echoing a sentiment prevalent among many in the industry who believe that state intervention is critical for success.

As discussions progressed, it became evident that the investment community's sentiment has recently shifted toward the upstream supply chain of the eVTOL ecosystem

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Investors are increasingly focusing on core systems and components that contribute to overall eVTOL manufacturing instead of just the airframes themselvesThere’s a burgeoning realization that a mature supply chain is essential for the success of the low-altitude economyLi Hao, a founding partner of Kun Chu Industrial Investment, succinctly articulated this point, stating that the supply chain’s development is crucial in fostering overall industry growth and facilitating genuine economic realization.

Whereas the commercial aviation industry has established a traditional “host manufacturer plus upstream supplier” model, the eVTOL space is still nascent, with many critical systems being developed in-house by manufacturers while also relying on external suppliersInvestors like Li have pivoted their strategies towards engaging in the development of control and power systems specifically tailored for drone operations, hoping to contribute to an ecosystem that can withstand the unique demands of low-altitude flight.

Contrastingly, the other end of the spectrum comprises optimistic players, including government-related investors and entrepreneurs who view the challenges as normal growing pains within a frontier industryA local state investor expressed, “There will always be pioneers and sacrifices in the development of a nascent industry, and the direction towards building a three-dimensional transportation system remains unchanged.” This viewpoint underscores the unswerving governmental support that the low-altitude economy continues to receive through policies and financial backing.

Numerous provinces have initiated low-altitude economy funds, with investments ranging from 1 billion to 20 billion yuan, aiming to stimulate development within this sectorCities like Guiyang, Wuhan, and Suzhou have set up clusters of funds to attract quality projects, signaling a robust institutional backing that aims to cultivate the industry effectively.

Infrastructure plays a critical role in the rollout of the low-altitude economy as well

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The density of general aviation airports directly influences the sector's growth, prompting many regions to prioritize the construction of new facilities as part of their development plansData shows an inventory of 452 general aviation airports across the country, with a growth trajectory expected to accelerate as enthusiasm for low-altitude businesses continues to rise.

Industry players maintain a vibrant discourse about the notion of an eVTOL revolution, yet it is crucial to remain practical about timelines associated with technological advancements and regulatory hurdlesFor instance, engaging in the commercial market for eVTOL entails overcoming stringent certification processes, which can take years to navigateIndustry veterans reflect on how traditional aircraft may take upwards of a decade from initial concept to commercial usage, establishing a framework within which investors and stakeholders must operate.

Within the ongoing discourse, there is a consensus acknowledging that although considerable excitement surrounds the eVTOL revolution, practical challenges remainFor one, the energy sources driving eVTOL performance require substantial improvements to meet capacity and efficiency expectationsAdditionally, the race to obtain regulatory approval is a significant obstacle, impacting the operational viability of various eVTOL prototypes currently in development.

The promise encapsulated in the phrase “low-altitude economy” hints at a plethora of opportunities beyond mere aerial taxisThe true essence lies in unlocking the economic benefits of previously restricted airspace, providing a chance for various aircraft models, such as drones for logistics and emergency services, to flourish within the anticipated regulatory frameworksThis multidimensional application of low-altitude flight technologies parallels trends in artificial intelligence, marking a transformative moment in how society could operate in terms of transport and logistics.

The overarching conclusion suggests a dual narrative for the low-altitude economy: the reality of obstacles entwined with the optimism for eventual success

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