eVTOL financing diverged in 2025: full-chain expansion in China, concentration among overseas leaders

Overview

This report reviews the 2025 global low-altitude economy and eVTOL investment landscape and looks ahead to industry development in 2026. UBS points out that 2025 was a key year of capital catalysts for the low-altitude economy and eVTOL industry, with financing activity reaching a high level as the industry shifted from proof of concept to accelerated commercialization. The report focuses on comparing China and overseas markets: China is still in the early-to-mid-stage expansion phase, with active financing, rising state capital participation, and funding covering the entire industry chain including OEMs, components, security, and services; overseas markets, by contrast, have entered a mature and consolidation phase, with capital highly concentrated in mature eVTOL OEMs, defense drone unicorns, and leading companies with commercialization capabilities.

Core views

The core views include: first, China was one of the world's most active eVTOL and low-altitude economy financing markets in 2025, with 255 primary market financing deals in the low-altitude economy, up 71% YoY. Second, China's market was dominated by early-to-mid-stage rounds such as Angel, Pre-A, and Series A, with capital broadly supporting startups in validating technology routes and business models. Third, overseas markets, especially the United States, showed higher financing concentration, accounting for about 50% of overseas market deal volume and more than 70% of financing amount, with large capital flows directed toward listed or near-commercialization mature companies. Fourth, passenger eVTOL remains a capex-intensive, certification-driven segment, while non-passenger drone applications such as logistics, firefighting, and defense are becoming more market-oriented and cost-effective. Fifth, the industry value chain is expected to expand in 2026, with investment shifting from OEMs to upstream core components such as batteries and flight control systems, as well as downstream operational services.

Analysis framework

The report adopts a market segmentation and regional comparison approach. Combining financing data from sources such as IT Orange, deal counts, financing amounts, round structures, average deal sizes, funding sources, and industry-chain segment distribution, it compares differences in low-altitude economy investment strategies between China and overseas markets. The analytical framework focuses on three dimensions: industry life-cycle stage, capital concentration and round structure, and capital allocation among aircraft manufacturing, core components, security systems, infrastructure, and operational services.

Methodology notes

• Industry life-cycle analysisChina early-to-mid-stage expansion vs. overseas mature consolidation

  Different regions are at different industry stages, leading to significant divergence in financing rounds and capital concentration.

  China's market is still dominated by early-to-mid-stage rounds such as Angel, Pre-A, and Series A, indicating an active startup ecosystem; overseas markets are more concentrated in strategic financing, rescue financing, and large late-stage rounds, reflecting an industry entering survival-of-the-fittest and consolidation.

• Industry-chain allocation analysisFull-chain layout vs. application-layer concentration

  Compare the distribution of capital across OEMs, drones, core components, security systems, infrastructure, and services.

  Capital in China more evenly covers eVTOL OEMs, industrial drones, core components, and low-altitude security, emphasizing a localized supply chain; overseas capital is more concentrated in eVTOL R&D and manufacturing, defense drones, and operational capabilities, with a more pronounced leader effect.

• Financing structure analysisComparison of deal count, amount, and average deal size

  Assess capital enthusiasm and concentration through the number of financing events, total financing scale, and average deal size.

  China has a high number of financing deals with broad coverage, while overseas has fewer deals but larger individual deal sizes. 45% of overseas financing deals exceeded US$100m, showing that overseas capital is more oriented toward mature leading companies.

Asset mapping & comparison

Structured mapping from thesis to named assets (strengths, weaknesses, peers, risks).

• China's low-altitude economy industry chain

  Core beneficiary asset direction

  Strengths

  Active financing, clearer policy support, rising state capital participation, complete industry-chain coverage, and a rich early-to-mid-stage startup ecosystem.

  Weaknesses

  Individual financing sizes are relatively smaller than overseas, and commercialization and airworthiness certification still need validation.

  Comparison

  Compared with overseas markets, China places more emphasis on the full chain, localization, and ecosystem building, rather than only betting on a small number of mature leading companies.

  Risks

  Tighter airspace management, higher licensing and airworthiness thresholds, safety accidents, and slower-than-expected progress in solid-state batteries.

• Mature overseas eVTOL OEMs

  Direction benefiting from capital concentration

  Strengths

  Leading companies possess technological barriers, industrial partnerships, and commercialization capabilities, making them more likely to secure large-scale financing.

  Weaknesses

  High capital expenditure and long certification cycles; after the industry enters a shakeout phase, financing pressure on lagging companies rises.

  Comparison

  Compared with China's broad-based early-to-mid-stage financing, overseas capital is more concentrated in a few mature companies and large late-stage rounds.

  Risks

  Tighter financing conditions, delayed commercialization, regulatory certification falling short of expectations, and the shakeout of tail-end companies due to industry consolidation.

• Defense drones and non-passenger applications

  An important driver of overseas financing

  Strengths

  Non-passenger applications such as logistics, firefighting, and defense are more market-oriented and cost-efficient, while defense demand is driven by geopolitical factors.

  Weaknesses

  Some demand may depend on government budgets and geopolitical cycles, and the sustainability of the commercial market still needs to be observed.

  Comparison

  In major overseas financing cases, defense technology companies such as Anduril Industries and Helsing made significant contributions; in China, investment is driven more by transport transformation and industrial applications.

  Risks

  Changes in defense budgets, export controls, regulatory restrictions, and order delivery falling short of expectations.

• Core components, flight control systems, and batteries

  Potential direction of capital migration in 2026

  Strengths

  As aircraft R&D advances, upstream segments such as batteries, flight control systems, avionics, and propulsion systems may attract more capital attention.

  Weaknesses

  High technical barriers and long validation cycles, with strong dependence on OEM certification progress and mass-production pace.

  Comparison

  China's investment share in upstream core components is higher than overseas, indicating a stronger need to build a local supply chain.

  Risks

  Key technological breakthroughs such as solid-state batteries are slower than expected, and reliability improvements and cost reductions in core components fall short of expectations.

Key data

• China low-altitude economy financing deal count255 dealsNumber of primary market financing deals in 2025, up 71% YoY; 2024 had 149 deals.
• Share of China's early-to-mid-stage rounds in 2025More than 75%Combined share of Angel, Pre-A, and Series A rounds, reflecting that the market is still in an active expansion stage.
• China Q3 2025 financing deal count95 dealsNearly triple that of the third quarter of 2024.
• China Q1 2025 financing amountRmb3.9bnUp 60% YoY.
• China Q3 2025 quarterly financing amountMore than Rmb10bnUp 77% YoY.
• State capital participation in China40% in 9M25Up 3 percentage points from 9M24, helping drive industrial cluster formation in regions such as Jiangsu, Guangdong, and Anhui.
• Overseas low-altitude economy financing deal count42 dealsPreliminary statistics for overseas markets in 2025.
• U.S. share of overseas dealsAbout 50% of deal volume, more than 70% of financing amountThe U.S. led overseas late-stage and large-ticket financing, with high participation from defense and strategic investors.
• Share of large overseas financings45% exceeded US$100m per dealReflecting the capital appeal and industry concentration of mature leading companies.
• Top ten overseas financing amountsClose to US$8bnAbout 10 times China's top ten financing amounts.
• Top ten financing amounts in ChinaClose to Rmb3bnMainly concentrated in the early-to-mid-stage phase.
• Capital distribution across China's industry chaineVTOL OEM 26%, industrial drones 24%, core components 18%, low-altitude security 9%Showing that China's capital allocation is more oriented toward coordination across the full industry chain.
• Capital distribution across the overseas industry chaineVTOL R&D and manufacturing about 61%, infrastructure and operational services 19%, upstream core components 10%Overseas capital is more focused on mature players that can build aircraft and operate aircraft.

Impact & implications

In terms of investment implications, the 2025 low-altitude economy financing boom was not a single synchronized global expansion, but rather showed regional structural divergence: China is more in a full-chain construction phase jointly driven by policy, state capital, and the startup ecosystem, with opportunities spread across OEMs, drones, components, security systems, and infrastructure; overseas markets are more in a stage of leading-company validation and industry shakeout, with capital favoring mature companies that possess technological barriers, commercialization capabilities, industrial partners, and defense scenarios. Areas worth watching in 2026 include upstream batteries and flight control systems, airworthiness certification, downstream operational services, commercialization of non-passenger drones, and the intensity of policy subsidies.

Risks

• Tighter airspace management in China may suppress the commercialization pace of the low-altitude economy.
• Higher barriers for permits such as airworthiness certificates may lengthen the rollout cycle for eVTOL products.
• Safety accidents such as aircraft crashes may affect regulatory attitudes, public acceptance, and financing sentiment.
• Slower-than-expected development of key battery technologies such as solid-state batteries may limit range, payload, and business models.
• As overseas markets enter a consolidation phase, lagging companies may face financing exhaustion, restructuring, or exit.
• Large-scale financing is concentrated in a small number of leading companies, which may increase industry valuation and execution risks.

What to watch

• Whether policy support and government subsidies exceed expectations in 2026.
• Progress in upstream core technologies such as batteries, flight control systems, avionics, and propulsion systems.
• The pace of eVTOL airworthiness certification, pilot operations, and commercialization order conversion.
• State capital participation in China and progress in building regional industrial clusters in Jiangsu, Guangdong, Anhui, and other areas.
• Changes in financing, orders, and geopolitical demand for overseas defense drone companies.
• Whether capital further shifts from OEMs to core components, infrastructure, and operational services.
• The actual release of demand for non-passenger drones in logistics, firefighting, defense, and industrial applications.