EHang's Q3 2025 Earnings Call: Contradictions Emerge on Product Expansion, Margins, and Southeast Asia Plans

Date of Call: November 26, 2025

Financials Results

• Revenue: RMB 92.5 million, year-over-year and sequential decreases due to lower EH216 sales and delayed customer payments (30 units now paid and expected to be recognized in Q4)
• Gross Margin: 60.8%, slightly lower than 61.2% in Q3 2024 and 62.6% in Q2 2025

Guidance:

• Full-year 2025 revenue guidance maintained at approximately RMB 500 million and management is confident in achieving it.
• Expect recognition of 30 fully paid units in Q4 that were deferred from Q3.
• Hefei Heyi Aviation to begin gradual public reservation-based EH216-S operations starting in December.
• First ground-operator training program under CAAC supervision to start soon; aim to verify first batch early next year.
• VT35 type-certificate application progressing steadily; certification efforts accelerating following EH216-S pathway.

Business Commentary:

* Revenue and Product Deliveries: - EHang Holdings Limited reported revenue of RMB 92.5 million for Q3 2025, with a 42 units delivered in the quarter. - The decline in revenue and deliveries was due to delayed payment schedules from certain customers and proactively optimizing delivery pace for regular operations.

• Product Portfolio Expansion:
• EHang launched VT35, a long-range lift-and-cruise pilotless human-carrying eVTOL, with a presale price of RMB 6.5 million.

• The VT35 offers a significant range of at least 200 kilometers and has received purchase orders from various regions, indicating market interest in its capabilities.

• Gross Profit and Operating Expenses:

• EHang's gross profit was RMB 56.2 million in Q3, with a gross margin of 60.8%, slightly lower than previous quarters.

• The decline in gross margin was due to repeat purchases from major customers and sales to distributors with discounts, but is expected to stabilize at around 60%.

• Regulatory Sandbox Initiatives:

• EHang secured approval for the world's first AUM Sandbox initiative in Thailand, aiming to commence commercial operations within the next 3 months.
• The initiative is expected to deliver 100 EH216 units in 2026, marking significant progress in commercialization efforts.
  

Sentiment Analysis:

Overall Tone: Positive

• Management repeatedly stated confidence in long-term growth and maintained full-year revenue guidance of RMB 500 million; highlighted product launches (VT35), international sandbox progress (Thailand), and RMB 1.13 billion in cash and equivalents to support R&D and operations, indicating constructive forward-looking posture.

Q&A:

• Question from Tim Hsiao (Morgan Stanley): Could you share more color on the Thailand Sandbox initiative timeline, key stages like OC application and transition to commercial operations, the scale as you expand to 4 regions, and progress engaging other Southeast Asian countries?
  Response: Thailand sandbox approved in mid-October; management targets commencement of commercial operations within ~3 months and plans to scale the sandbox across multiple Thai islands and replicate the model across Southeast Asia, targeting ~100 EH216 deliveries in 2026 and discussing engagements with Cambodia, Malaysia and Singapore.

• Question from James (UBS): Why expand into unmanned product portfolios (firefighting drones, logistics eVTOL, formation drones)? What will be their contribution to revenue and profit?
  Response: Unmanned products complement manned eVTOLs to diversify revenue and drive positive cash flow; GD 4.0 formation drone is already commercial with 3,000 firm orders and >10,000 purchase intents, plus recurring maintenance/consumables revenue potential.

• Question from Chen Yu (Guosen Securities): For VT35, what is the plan and status for airworthiness/type-certificate application after the October launch and one Q3 delivery? Separately, will gross margin stabilize around ~60% given the slight Q3 decline and what caused it?
  Response: VT35 type-certificate application was filed in March and is progressing steadily using lessons from EH216-S; Q3 gross margin dipped to 60.8% due to distributor discounts, repeat purchases and trial-production high unit costs for VT35, but management expects long-term gross margin to target around 60% with short-term fluctuations as product mix evolves.

Contradiction Point 1

Product Portfolio Expansion and Revenue Contribution

It involves the strategic direction and potential revenue impact of expanding into new product portfolios, which could affect investor expectations and financial projections.

Why is EHang expanding into unmanned product lines such as firefighting drones and formation performance drones? What is their contribution to revenue and profit? - James [Indiscernible] (UBS)

2025Q3: EHang is expanding its product portfolio to include both manned and unmanned operations, leveraging its technological capabilities. The 216 series includes manned and logistics models, and the VT35 series includes logistics and other applications. The aim is to maximize EHang's technology and increase market share. The focus is shifting to diversify the product mix to generate positive cash flow for the company. - Zhao Wang(COO), Unknown Executive

What is the geographic and model mix of the current order backlog? What impact has the type certificate had on EHang's revenue? - Tim [Last Name] (Morgan Stanley)

2023Q3: Over 90% of our sales pipeline in the domestic and Asian markets are for EH216 [indiscernible], with less than 10% orders from EH216-S logistic version and EH216 firefighter version. - Chia-Hung Yang(CFO)

Contradiction Point 2

Gross Profit Margin Trends and Expectations

It involves changes in financial forecasts, specifically regarding gross profit margin expectations, which are critical indicators for investors.

What caused the Q3 2025 gross profit margin decline? - Chen Yu (Guosen Securities)

2025Q3: The gross profit margin decline is due to repeat purchases and distributor discounts. Despite this, the long-term gross margin is expected to stabilize around 60%. - Zhao Wang(COO), Chia-Hung Yang(CFO)

What was the ASP of 216? - Yu Chan (Everbright Securities)

2023Q3: ASP of 216 has seen a slight increase, and there is upside potential for higher pricing. - Chia-Hung Yang(CFO)

Contradiction Point 3

Expansion into Southeast Asian Markets

It involves discrepancies in the company's plans and progress regarding expansion into Southeast Asian markets, which could impact strategic growth and investor expectations.

Can you provide details on the Sandbox initiative, including its timeline and scale for expansion, and whether there are plans to expand it to other Southeast Asian countries? - Tim Hsiao (Morgan Stanley)

2025Q3: EHang's Sandbox initiative in Thailand is progressing well, with the goal to commence commercial operations within the next 3 months. 100 EH216 units are planned for delivery in 2026, with potential for over 1,000 units in the market. - Unknown Executive

Can you provide an update on the company's overseas business progress? - Siu Lun Lau (Jefferies)

2025Q2: Commercial operations targeted within 6 months. Sandbox testing in Thailand and UAE for commercial certification. - Chia-Hung Yang(CFO)

Contradiction Point 4

Product Portfolio Expansion and Revenue Diversification

It involves changes in strategic focus and product portfolio expansion, which can impact market positioning, investor expectations, and revenue projections.

Why is EHang expanding into unmanned product portfolios like firefighting and formation performance drones? What contribution do they make to revenue and profit? - James [Indiscernible] (UBS)

2025Q3: EHang is expanding its product portfolio to include both manned and unmanned operations, leveraging its technological capabilities. The 216 series includes manned and logistics models, and the VT35 series includes logistics and other applications. The aim is to maximize EHang's technology and increase market share. The focus is shifting to diversify the product mix to generate positive cash flow for the company. - Zhao Wang(COO), Unknown Executive

How should EHang stay competitive moving forward, especially beyond its current multi-copter design? - Laura Li (Deutsche Bank)

2025Q1: Our multi-copter configuration has a compact footprint, minimal infrastructure requirements, and lower costs compared to tiltrotor or lift and cruise designs. Autonomy eliminates pilot costs, and we're developing new propulsion and energy solutions. VT35 launch will offer competitive pricing in the long range eVTOL market. - Huazhi Hu (CEO)