Insight - Short sellers, SPACs and the future of flying cars

Huge investment: Visitors stand next to a concept flying car at a technology summit in Dubai. A typical development programme for air taxi costs up to US$1bil. — AFP

WHEN EHang Holdings Ltd first sold shares to the US public in December 2019, investors weren’t exactly sold on the rare chance to bet on the future of flying cars.

The Chinese company makes “electric vertical take-off and landing” (eVTOL) aircraft, which function a bit like a helicopter but are powered by batteries and have multiple rotors. Its passenger drones are pilotless, too, unlike those of most of its rivals.

EHang’s listing – a traditional initial public offering (IPO) underwritten by Morgan Stanley and Credit Suisse – raised just US$41mil and valued the company at less than US$700mil. Since then it has been caught up in a surge of excitement about the development of air taxis, and at the start of this week it was worth US$6.8bil.