EHang Q1 2024 Earnings Results & Report

EHang EPS Results

• Actual EPS: -$0.14
• Consensus EPS: N/A
• Beat/Miss: N/A
• One Year Ago EPS: N/A

EHang Revenue Results

• Actual Revenue: $8.55 million
• Expected Revenue: N/A
• Beat/Miss: N/A
• YoY Revenue Growth: N/A

EHang (NASDAQ:EH) Holdings is a technology company focused on autonomous electric vertical takeoff and landing (eVTOL) aircraft and urban air mobility. Its products include passenger-carrying aircraft, such as the EH216 series, as well as aircraft and systems for logistics, firefighting, emergency response and other applications.

The company also develops the software and infrastructure used to manage and support its aircraft operations. Its offerings are intended for uses including aerial transportation, tourism, cargo delivery and smart-city services.

Founded in 2014 and headquartered in Guangzhou, China, EHang serves markets in China and internationally. Founder Huazhi Hu is the company’s chairman and chief executive officer.

EHang Q1 2024 Earnings Call Transcript

Key Takeaways

• EHang secured the CAAC’s production certificate for its EH216F—completing type, production, and standard airworthiness approvals—and gained a global lead in the low-altitude economy sector.
• In Q1 2024, EHang delivered a record 26 EH216 units and reported RMB 61.7 million in revenue, up 178% year-over-year and 9.1% sequentially, exceeding guidance by over 6%.
• For the second consecutive quarter, EHang achieved positive operating cash flow and closed Q1 with RMB 323.8 million in cash, US$55 million raised via ATM, and an unused RMB 131 million credit facility.
• The company projects Q2 revenue of around RMB 90 million—over 800% growth year-over-year—and targets non-GAAP breakeven by delivering roughly 200–250 EH216 units annually.
• EHang formed strategic partnerships with Guangdou Automobile for intelligent manufacturing and with Lishen Technology for ultrafast charging batteries, while advancing its VT30 eVTOL lift-and-cruise model toward certification.

Presentation

[Operator]

Good day, ladies and gentlemen, thank you for standing by. Welcome to EHang's First Quarter 2024 Earnings Conference Call. As a reminder, we are recording today's call. Now I will turn the call over to Anne Ji, EHang's Senior Director of Investor Relations. Miss Anne, please proceed.

[Anne Ji, Senior Director of Investor Relations at EHang]

Hello, everyone. Thank you for joining us on today's conference call to discuss the company's financial results for the first quarter of 2024. The earnings release is available on the company's IR website. Please note the conference call is being recorded and the audio replay will be posted on the company's IR website. On the call today we have Mr. Huazhi Hu, our founder, chairman, and chief executive officer, Mr. Zhao Wang, co-chief operating officer, and Mr. Conor Yang, Chief Financial Officer and Director of the Board. The management team will successfully give prepared remarks. Remarks delivered in Chinese will be followed by English translations. All translations is for convenience purpose only. In case of any discrepancy, the management statement in the original language will prevail. A Q&A session will follow afterwards.

[Anne Ji, Senior Director of Investor Relations at EHang]

Before we continue, please note that today's discussion will contain forward-looking statements made pursuant to the safe harbor provisions of the U.S. Private Securities Litigation Reform Act of 1995. Forward-looking statements involve inherent risks and uncertainties. As such, the company's actual results may be materially different from the expectations expressed today. Further information regarding this and other risks and uncertainties is included in the company's public filings with the SEC. The company does not assume any obligation to update any forward-looking statements except as required under applicable law. Also, please note that all numbers are presented and are in RMB and are for the first quarter of 2024, unless stated otherwise. With that, let me now turn the call over to our CEO, Mr. Huazhi Hu. Please go ahead, Mr. Hu.

[Huazhi Hu, CEO at EHang]

[Foreign language]

[Huazhi Hu, CEO at EHang]

[Foreign language]

[Translator]

This is the English translation of Mr. Hu's remarks. Hello, everyone. Thanks for joining EHang's conference call today. I'm excited to share with you EHang's progress in the first quarter of 2024. We had continued steady growth in both sales and operations in the first quarter, demonstrating our first mover advantage and exceptional execution in a vital sector of the low altitude economy. Following obtaining the Type Certificate for EH216-S last year, we have been pushing forward the production certification, driving sales growth, preparing for commercial operations, and continuously optimizing our products. After a half year continued efforts since last October, we have secured the Production Certificate or PC for EH216-S from the Civil Aviation Administration of China, or the CAAC.

[Translator]

This means our production process and quality management systems has been validated by the CAAC experts for our capability of sustainable mass production. As the world's first company to obtain Type Certificate, Production Certificate, and Standard Airworthiness Certificate, our self-developed EH216-S pilotless passenger-carrying vehicle has been thoroughly validated and recognized by the CAAC. From model design to production, and to the safety and airworthiness of each unit delivered. This gives us a global lead and a competitive edge in the pivotal sector of the low altitude economy. The Chinese government has continued rolling out supportive policies on the low altitude economy, and the domestic market is now poised for an unprecedented boom.

[Translator]

In March this year, an Implementation Plan for Innovative Application of General Aviation Equipment (2024-2030), was jointly issued by the four ministries in China, which are the Ministry of Industry and Information Technology, the Ministry of Science and Technology, Ministry of Finance, and the CAAC. The plan outlines our development roadmap, focused on the manned and electric, and intelligent aerial vehicles, and sets the goals to realize their commercial operations in urban areas for passenger transportation, logistics, and emergency rescue, with a target market size of trillions of RMB for the low-altitude economy in China by 2030. This fully reflects the Chinese government's great attention on the low-altitude economy as a strategic emerging industry, and injects a strong momentum into its sustainable development.

[Translator]

In response to the central government initiative, nearly 30 provincial and municipal governments have rolled out their own low altitude economy development plans in China, accelerating the industry's growth. These plans cover multiple dimensions, including urban planning, infrastructure development, supply chain, production, procurement, application scenarios, and commercial operations, to empower the innovative companies in the low altitude economy industry like EHang. We have been seeing a steady growth in order demands from government, scenic spots, and overseas customers, and our deliveries are also proceeding in a steady and orderly manner.

[Translator]

In Q1, we have delivered 26 units of EH216 series products, a record high for a single quarter in our history, with revenues more than double that of the same period last year. On the operational side, we are working on multiple low altitude economy demonstration projects in various cities in China.

[Translator]

So far this year, our flight footprint has expanded to multiple domestic cities and overseas regions like the UAE, Costa Rica, and Japan. We have successfully completed the EH216-S debut demo flights in Latin America and the Middle East. At this stage, we are also actively expanding our upstream and downstream cooperation in the industrial chain, and continuously optimizing our product performance. In February this year, we formed a strategic partnership with Guangzhou Automobile Group to collaborate on low altitude economy initiatives, leveraging each other's strengths in intelligent manufacturing and eVTOL mobility products.

[Translator]

In April, we announced a strategic partnership with Greater Bay Technology to co-develop the world's first ultra-fast charging, extreme fast charging battery solution for eVTOL aircraft, which expected to be charged from 30%-80% in a short 5-10 minutes, with over 2,000 charging cycles.

[Translator]

This will significantly boost the performance of our pilotless eVTOLs, enabling them to meet the demands of a high-frequency, large-scale operations for urban air mobility scenarios. Meanwhile, we are also stepping up internal flight testing of our VT-30 Lift and Cruise model, and preparing for its type certification.

[Translator]

Based on the experience we have gained from the EHang 216-S certification, the long-range VT-30 product will also boost a comprehensive and commercially available system design and airworthiness. With EHang's leading technology and airworthiness advantages in the pilotless eVTOL industry, as well as our collaborative industry layout, we are confident in driving the rapid growth of the UAM sector and maintaining our leading position in a promising low-altitude economy. As we are entering a critical stage for commercialization, we are excited to welcome Mr. Zhao Wang, our new Co-Chief Operating Officer, to join our management team.

[Translator]

With over 20 years of rich experience and expertise in business operations for technology plus cultural tourism, he will play a vital role in driving our commercial operations forward. Today, he's joined the call with us. Let's welcome Mr. Wang to share some insights on our Q1 operational performance. Thank you.

[Zhao Wang, COO at EHang]

Thank you, Mr. Hu. Hello, everyone. I'm honored to join EHang as Co-Chief Operating Officer at this pivotal moment when our EH216-S pilotless eVTOL has achieved 3 certificates. These certificates make a critical milestone in our commercialization journey. I'm committed to driving the company's strategic deployment, market expansion, product sales, and commercial operations with full force. I work closely with the team to seize the massive opportunities presented by the thriving low-altitude economy, and ensure that EHang maintains its leading edge in the industry, maximizing the business value for our company. On the sales front, we delivered 26 units of EH216 series products in Q1, representing a 136% year-over-year increase and a 13% quarter-over-quarter growth of the delivery volume.

[Zhao Wang, COO at EHang]

Notably, as part of conditional purchase order, we have received from UAE customer for 100 units of EH216 series products. The first batch of 5 units, including EH216-S, L, and F, had already delivered in Q1. In March, we partnered with the Wuxi local government for UAM, securing a conditional purchase order for 100 units of EH216-S. As part of it, the initial 10 units has been delivered in Q1, and the debut commercial flight demonstration ceremony is scheduled in May. Additionally, in Q1, our products had been also delivered to Hubei and Shanxi Province in China and Brazil in South America. Looking ahead, with the increasing production capacity, we expect our product delivery volume in Q2 to far surpass that in Q1.

[Zhao Wang, COO at EHang]

Recently, the low-altitude economy has been taking off in China, further fueling the growth of our product demand after obtaining airworthiness certifications. Governments, enterprises, and overseas customers are all eager to introduce our advanced pilotless eVTOLs to their local markets, and are planning to develop comprehensive low-altitude economy ecosystem, including infrastructure, funding, talents, and operations. In order to present the air taxi application scenario as soon as possible.

[Zhao Wang, COO at EHang]

We have been working on the site planning and construction work for dozens of eVTOL takeoff and landing vertiports in various places. Currently, our order book is robust, and our factory is gradually increasing production capacity to meet customer demand and support future sustainable growth. We are also actively exploring new customers and markets, and pushing forward purchase orders and operational collaborations with domestic and international customers.

[Zhao Wang, COO at EHang]

On the commercial operations, we are working closely with local governments in cities like Hefei, Guangzhou, Shenzhen, and Wuxi to co-create low-altitude economy demonstration projects, planning to deploy UAM operation demonstration centers, and plan to launch low-altitude routes for urban air transportation. As we are setting up these demonstration projects, we are also developing a rigorous operational system and rules, infrastructure standards, maintenance system, personnel training, and qualifications to ensure safe operations and set industry benchmarks. We are also expanding our international market. At the DriftX event in Abu Dhabi, we showcased the diversity of our products and application use cases by displaying our EH216-S, EH216-L, and EH216-F, and our long-range lift and cruise eVTOL VT-30, which was its overseas debut.

[Zhao Wang, COO at EHang]

With the support of our local partners, the EH216-S successfully obtained the approval from the UAE General Civil Aviation Authority, and completed its first passenger carrying flight demonstration in the Middle East region. Meanwhile, we have also formed a strategic partnership with Abu Dhabi Investment Office and renowned Fintech Group, Multi Level Group, to facilitate our next phase of in-depth development in UAE. In March, with the support of our partners, AirX and Tsukuba Airlines, Japan's first UAM center was established in Tsukuba City, serving as an operational base for EH216-S. As EHang's Co-Chief Operating Officer, I'm committed to driving our commercial operations full steam ahead. Next, I will turn the call over to our CFO, Conor. Thank you.

[Conor Yang, CFO at EHang]

Thank you, Mr. Wang. Hello, everyone, this is Conor. Before I dive into details, please note that all numbers presented are in RMB, unless stated otherwise. Detailed analysis are available in our earnings press release on our IR website. I will now highlight some key points. I'm pleased with the company's continued diligent execution, as it led to us delivering stellar financial results for Q1 2024. We exceeded our quarterly revenue guidance of RMB 58 million by over 6%, and achieved positive operating cash flow for the second consecutive quarter. Most importantly, we secured the Production Certificate from CAAC, clearing the path for mass production of our EH216-S, and setting the stage for accelerated growth. Total revenue in Q1 were RMB 61.7 million, representing a substantial increase of 178% year-over-year, and 9.1% increase from the prior quarter.

[Conor Yang, CFO at EHang]

These gains were primarily driven by higher sales volume of the EH216 series products. We delivered 26 units of EH216 series eVTOL in Q1, over doubling 11 units in Q1 last year, and compared with 23 units in last quarter. Gross margin remained consistently high at 61.9% in Q1, compared with 63.9% last year, and 64.7% in last quarter. The slight declines were mainly due to changes in revenue mix and increased cost per unit of the airworthiness certified EH216 products. Still, our high gross margin demonstrates our competitive edge as a frontrunner in the eVTOL sectors.

[Conor Yang, CFO at EHang]

Our adjusted operating expenses, which are operating expenses, excluding share-based compensation expenses, were RMB 54.5 million, up 8.7% from RMB 50.1 million in Q1 last year, and down 15.1% from RMB 64.2 million in last quarter. The year-over-year increase was mainly due to increased sales-related compensation, and the quarter-over-quarter decrease was primarily because of the lower expected credit loss expenses due to improvement in credit controls in Q1, 2024. Adjusted operating loss was RMB 12.6 million, a 63.4% improvement from RMB 34.3 million in Q1 last year, and a 49.5% improvement from RMB 24.9 million in last quarter.

[Conor Yang, CFO at EHang]

Adjusted net loss was $10.1 million, a 69.9% improvement from $33.6 million in Q1 last year, and a 54.4% improvement from $22.1 million in last quarter. Thanks to our prudent cash management and improved credit controls, we achieved positive cash flow from operations for the second consecutive quarter, further enhancing our balance sheet. At the end of Q1, our cash and cash equivalents, short-term deposits, and short-term investment balances were $323.8 million. To date, we have received over $55 million of gross proceeds from recent equity funding through an at-the-market offering. Furthermore, we have unused uncommitted credit facilities of RMB 131 million, with expiration in April 2025. This further strengthen our liquidity position.

[Conor Yang, CFO at EHang]

Now that our EH216-S has obtained all three certificates, ready for mass production and sales, driven by favorable government policies and the market enthusiasm, we are getting on a fast track to revenue growth and continuing improvement of our financial situation. We believe our diligent preparation for commercial operations equips us for maintaining this upward trajectory and will further foster ongoing expansion while capitalizing on our core capabilities to propel growth within the UAM sector. With that, we expect total revenues for the second quarter of 2024 to be around RMB 90 million, representing an increase of over 800% year-over-year. That concludes our prepared remarks. Let's now open the call for questions. Operator, please go ahead.

[Operator]

Thank you. To ask a question, please press star one and one on your telephone and wait for your name to be announced. To withdraw your question, please press star one and one again. Please stand by while we compile the Q&A roster. Our first question comes from Tim Fong with Goldman Sachs. Your line is now open.

[Tim Fong, Global Banking & Markets Mortgage Strategist at Goldman Sachs]

Yes, thank you for taking my question. So, I want to check, what's our CapEx plan for this year and, in the long term. So given that we have received the PC certificate from government this year, so do we have any plan to further expand our capacity, to drive up our shipment for the long term? Thank you.

[Conor Yang, CFO at EHang]

Yeah, thank you. To fulfill the rapid business growth, we plan to expand the current production capacity in our Yunfu factory to the maximum capacity. We plan for new headquarters also in Guangzhou, with multiple functions, including office facilities, takeoff and landing infrastructure, research labs for batteries, power system, command and control system, all in one place. With that, our plan for CapEx is around $10 million for this year for the expansion. Thank you.

[Operator]

One moment for our next question. The next question will come from Cindy Wang with Morgan Stanley. Your line is now open.

[Cindy Wang, VP of Enterprise Technology at Morgan Stanley]

Hi, thank you for taking my question, and congratulations on strong results. So I have two questions. So first, I want to ask about the certification timeline. As we have obtained TC, AC, and PC, when do we expect to receive the OC to kick off operations? And my second question that's related to the order backlog. Can management update the current order backlog based on binding purchase agreement? And how should we expect the delivery cadence throughout the year? Will there be any constraints or uncertainty on capacity or supply side? Thank you.

[Huazhi Hu, CEO at EHang]

[Foreign language]

[Translator]

Yeah, thank you for your question. This is the translation of the answers to your first question. EHang as the manufacturer has obtained the TC, AC, and PC, while the OC, which is the Operating Certificate, is to be obtained by the air operator by submitting an application to the CAAC and to receive the relevant qualifications. Currently, EHang is in cooperation with the CAAC to formulate the operating standards of the EH216-F. After the CAAC issues relevant regulatory documents, the air operators can formally submit their OC applications based on the rules.

[Huazhi Hu, CEO at EHang]

[Foreign language]

[Translator]

For your second question, the customers with intention for the bulk purchases will sign framework agreement and the pre-orders with us, and the quantities will reach up to hundreds of units. This will be converted into binding formal orders in batches based on the customer's business development needs and the market expansion progress, following the planned and paced approach. The 26 units delivered in the first quarter are all part of the initial batch orders from these customers, and the conversion volume of these orders will gradually increase in subsequent quarters.

[Huazhi Hu, CEO at EHang]

[Foreign language]

[Translator]

We will provide quarterly revenue forecast. Revenues for the second quarter is expected to be approximately 90 million RMB. The company's assessment of the performance guidance is based on the quarterly business progress, the conversion of the intentional orders and new orders. Currently, the company has a sufficient order book, and the production capacity is expanding in sync with the order quantities. In terms of the production capacity, we have already obtained the Production Certificate for the EH216-S, qualifying us for a mass production. Regarding the supply chain, we have a relatively mature and sufficient reserve. At present, we do not see any significant bottlenecks or uncertainties in our production capacity and the supply chain.

[Cindy Wang, VP of Enterprise Technology at Morgan Stanley]

That's very clear. Thank you.

[Operator]

One moment for the next question. The next question comes from Yu Chen with Haitong Securities. Your line is open.

[Yu Chen, Equity Research Analyst at Haitong Securities]

Okay, thank you for taking my question, and congratulations on the good performance in the first quarter this year. I have two questions. The first one is, regarding the operation. I would like to ask you a question about the operational routes. How many operational routes we are planning right now? And the second question is, could management team shed more light on new orders the company received in recent years, in recent months? Thank you.

[Huazhi Hu, CEO at EHang]

[Foreign language]

[Translator]

So your first question, regarding the operational route, currently we have multiple UAM operation sites under construction in Guangzhou's Huangpu District, Shenzhen Bao'an and Luohu District, Hefei Baohe District, Wuxi Liangxi District, and Tsukuba in Japan. These sites are being prepared for the establishment of commercial operation routes. We are currently engaging in facility construction, test flights, personnel training, and certification application. Thank you!

[Huazhi Hu, CEO at EHang]

[Foreign language]

[Translator]

For your second question, we have received an intention and purchase order from the Wuxi government for 100 units of EH216-S as this March, and they delivered 10 of this in the first quarter. In the second quarter, we have added orders from Shaanxi, Hunan, Wenzhou, and Zhuhai, as well as the purchase intentions from Xinjiang, Hainan, Guangdong, along with, several overseas intentions. The deliveries will proceed steadily and orderly with a gradual increase. Updates on order executions will be released continuously. Please stay tuned. Thank you.

[Operator]

One moment for our next question. The next question we have is from Rong Zhao with TF. Your line is now open.

[Analyst]

Hi, thank you for taking my questions. First, congratulations on the company's outstanding performance. So I have two questions. The first one is that, I noticed the company has received pre-orders from overseas customers, like including those from Southeast Asia and Middle East. So could you please update us on the progress of EH216 Overseas Airworthiness Certification? How it is, and also how is the local regulatory acceptance? And the second question is that, could you please summarize the customer types for Q1 deliveries? Are they mainly government customers? And also, what is the proportion of overseas deliveries? Thank you.

[Conor Yang, CFO at EHang]

Thank you for the question. I will answer the first question, and I will let the CEO answer the second question. We have actively pushing forward with the validation of the Type Certificate for our EH216-S in overseas countries, which will enable us to meet the demand from international orders and lay the groundwork for further expansion into local markets. We know that the CAAC has signed a bilateral agreement with many countries' aviation authorities around the world. Based on the Type Certificate already issued by the CAAC, we are also coordinating a mutual communication between the CAAC and aviation authorities in Southeast Asia, Latin America, and Middle East, such as Brazil, Thailand, Indonesia, and the UAE. So the VTC is an administrative process that is simpler than obtaining the Type Certificate from zero to one.

[Conor Yang, CFO at EHang]

So before VTC is obtained, we can still deliver our products to overseas customers for their local uses, for testing, for training and certification. For example, we have delivered five EH216 series products to the customers to the UAE in the first quarter, and we will accelerate the VTC certification process to further expand into international markets. Mr. Wang?

[Huazhi Hu, CEO at EHang]

[Foreign language]

[Translator]

To your second question, we are seeing an increase in negotiation, demand, and orders from domestic and international customers. And following the Chinese government's release of the guidelines for the developing low-altitude economy, we delivered 26 units of the EH216 series in the first quarter. And a significant portion of these deliveries are the government purchases, and approximately 23% going to the overseas customers. And the target application scenarios include urban passenger transport, the low-altitude tourism, logistics, and emergency firefighting, and other industry applications. Thank you.

[Operator]

One moment for the next question. The next question comes from Jun Ci with Guosen Securities. Your line is now open.

[Analyst]

Thank you, Huazhi Hu, Zhao Wang, Conor Yang, Anne Ji for taking my questions, and congratulations on the good results and on obtaining PC this quarter. I have two questions. The first one is, we are also concerned about the bottlenecks during production. So are there any bottlenecks in the supply chain? And what is the domestic production rate of EH216-S?.

[Translator]

[Foreign language]

[Huazhi Hu, CEO at EHang]

[Foreign language]

[Anne Ji, Senior Director of Investor Relations at EHang]

For your first question, based on the developed UAV and electric vehicle supply chain system in China, we have established a long-term partnership with suppliers on our supply chain. We maintain close cooperation with multiple suppliers to ensure stable supply and high quality for our individual components. At the same time, we are also actively seeking high quality suppliers to diversify our supply chain, and reduce risks from dependency on any single supplier. Currently, we do not see any bottlenecks in the supply chain, and most of the components for the EH216 series have been localized. Our key components, including the control system, motors, and batteries, are all produced domestically. We receive stable deliveries from our suppliers and maintain stable cooperation with them. Thank you.

[Analyst]

Thank you. And I have a second question, in order to achieve the quarterly and annual, breakeven points, so how many, EH216 units needs, need to be delivered? Thank you.

[Translator]

[Foreign language]

[Huazhi Hu, CEO at EHang]

[Foreign language]

[Translator]

[Foreign language]

[Translator]

[Foreign language]

[Conor Yang, CFO at EHang]

Thank you. Based on our current cost structure and the trend of our business expansion, we estimate that we can achieve an annual breakeven point on a non-GAAP basis, which is excluding the share-based compensation expenses, by delivering around 200-250 units of EH216 products per year. So, and from a quarterly perspective, for example, in the first quarter, we have delivered 26 units, and our non-GAAP net loss has narrowed to just RMB 10 million. So, with our current order book and production capacity expansion, we are confident that we can achieve non-GAAP breakeven in the near future quarterly. Thank you.

[Operator]

One moment. One moment for our next question. The next question comes from Zisen Zhuang with Huatai. Your line is now open.

[Analyst]

Hello, management team. Thank you for taking my question. We noticed that the company sold EH216s through live streaming on Taobao platform in the first quarter. Did you see any new demand generated from this Taobao event? Will the company sell directly to C-end users in the future? My second question is: could the management team share more about the company's thoughts on eVTOL battery solutions? When can the faster charging battery developed with GBT?

[Zhao Wang, COO at EHang]

[Foreign language]

[Zhao Wang, COO at EHang]

[Foreign language]

[Translator]

For your first question, that is a very good question. As people are paying attention to whether our aircraft can be sold to the C-end users, our Taobao live stream sale event for the EH216 was primarily aimed at introducing and educating the public about this new type of autonomous passenger EVTOL aircraft, and at the same time demonstrating that they can be purchased and used by the end consumers. However, to provide well-rounded, low altitude flight operation services and to enrich usage scenarios, our current customers are still primarily governments and enterprises. End users can purchase tickets and rides via the air taxi app. In the future, end consumers will be able to purchase the aircraft individually. Not only can the aircraft fulfill their daily travel needs, it can also be integrated into the air taxi operation system when are not in the individual use.

[Translator]

Based on our autonomous driving system, these aircraft can become the robo air taxi and generate operational revenues. For your second question, we have been actively exploring various eVTOL battery solutions to further improve the performance and efficiency of our product. We strive to achieve the best balance between the safety, cost and efficiency.

[Translator]

We will focus on the battery, energy density, power density, thermal management, and the cycle life, and continuously optimize and enhance the performance of our eVTOL product in terms of range, payload, and charging time. To achieve this, we have been collaborating with battery companies in the industry for years, continuously researching for new battery technologies suitable for eVTOLs. Both our solid lithium batteries, developed by Inx, and our rapid charging and discharging batteries, developed by Greater Bay Technology, have entered the testing phase.

[Translator]

These new batteries with larger capacity, faster charging speeds, and enhanced safety, will significantly improve our operational efficiency. Thank you.

[Operator]

One moment for our next question. The next question comes from Qin Kai with Zhongtai. Your line is now open.

[Analyst]

Hello, management team. Thank you for taking my question, and I also have two questions. The first one is, what are the main uses of the ATM offering? What are the plans for human capital investment as the company grows in size? My second question is about the pipeline of the new type of eVTOL aircraft. Can you share more about the latest progress of VT-30? Thanks.

[Conor Yang, CFO at EHang]

Thank you. I will take-

[Tim Fong, Global Banking & Markets Mortgage Strategist at Goldman Sachs]

Oh.

[Conor Yang, CFO at EHang]

I'll take the first question. Sorry. Go ahead, please. Yeah, I'll answer the first question. Yeah. Thank you for your question. On the ATM offering that we have raised over $50 million through the ATM so far. And you know, we can secure more funds to support the company's growth, to enhance our financial flexibility and strengthen our balance sheet, and to better accept the market changes and challenges. This fundraise will provide us with more resources to invest in expansion in the sales team and commercial operations, R&D, and our production capacity. Currently, we have around 380 employees, which is not too much increase from last year.

[Conor Yang, CFO at EHang]

But with the new fund raise, we will speed up our team expansion to support our business. But the growth rate of the operating expenses will be definitely below our top line growth rate. Thank you. Mr. Wang?

[Huazhi Hu, CEO at EHang]

[Foreign language]

[Translator]

For your second question, the EH216-S is our first product to receive the airworthiness certification, and the commercial operations will be carried out, focusing on the EH216-S at this stage. Meanwhile, to better address the diverse needs of urban air transportation scenarios globally and maintain our leading position, we will continue to develop new products and technologies. The VT-30 is a product that we are currently developing with features including unmanned piloting, electric propulsion, lift and cruise type, and long endurance. Following the successful airworthiness experience of the EH216-S, the relevant research and development of the VT-30 and the preparations for airworthiness applications are progressing steadily. We conducted the first overseas showcase of the VT-30 in UAE in April, and we will announce more progress in due course. Thank you.

[Operator]

Thank you. This will conclude the Q&A session due to the time limits, and I would now like to turn the call back to Ms. Anne for closing remarks.

[Anne Ji, Senior Director of Investor Relations at EHang]

Thank you, operator, and thank you all for participating on today's call. If you have any further questions, please contact our team by email or participating in our following investor events through the contact information provided on our website. We appreciate your interest and look forward to our next earnings call. Thank you.

[Operator]

Thank you all again. This concludes the call. You may now disconnect.

Participants

Executives

• Anne Ji, Senior Director of Investor Relations
• Huazhi Hu, CEO
• Zhao Wang, COO
• Conor Yang, CFO

Analysts

• Translator
• Tim Fong, Global Banking & Markets Mortgage Strategist at Goldman Sachs
• Cindy Wang, VP of Enterprise Technology at Morgan Stanley
• Yu Chen, Equity Research Analyst at Haitong Securities
• Analyst
• Analyst
• Analyst
• Analyst