The final week of 2022 has seen two publicly-owned eVTOL developers bolstering their financial foundations in separate agreements valued potentially at more than $120 million. Transactions involving China’s EHang and Eve Air Mobility, in which Brazilian aerospace group Embraer is the majority shareholder, were both announced on December 23.
EHang is being boosted by a $10 million equity investment from Qingdao West Coast New Area. The organization, which is one of China’s new government-backed “national new areas,” further agreed to a potential additional $10 million investment in the future. EHang says it will use the funds as working capital.
With more than seven million inhabitants, the city of Qingdao (also known as Tsingtao) will be the site of a new “demonstration area” for EHang’s autonomous aerial vehicles, including the two-seat EH216 model. The manufacturer also says it will establish its new Northeast Asia regional headquarters in the city and will work with the Qingdao West Coast New Area to launch a new business venture focused on the use of eVTOL aircraft for firefighting missions.
The new investment in EHang is expected to close during the first quarter of 2023. Qingdao West Coast New Area will be issued with new Class A ordinary shares in the group at a purchase price based on the average closing sales prices for Wall Street-listed EHang’s American Depositary Shares for the 30 trading days preceding the signing of the agreement on December 21.
Brazilian Bank Boosts Eve
Meanwhile, Brazil’s National Development Bank has agreed to issue Eve Air Mobility lines of credit totaling $92.5 million. The credit, which has a 12-year maturity period, will fund the development of Eve’s four-passenger eVTOL aircraft.
The agreement bolsters cash reserves at Eve, which on December 23 reported a net loss of $36.7 million for the third quarter of 2022. This was almost 10 times the $3.8 million loss, the company reported for the same period in 2021. The company said the increase was due to a significant uptick in research and development costs as the program has progressed.
During the third quarter, Eve spent $17 million in cash, compared with $2.4 million in the third quarter of 2021. Over the course of the first nine months of the current financial year, the company consumed $39.1 million in cash, and reported a net loss of $154 million (up from $10 million in 2021).
As of the end of the third quarter, Eve reported liquidity of $329.9 million. It said that development expenses were “mostly offset” during the period by an investment from United Airlines Ventures announced in September 2022.
