EHang - ADR: Downgrade to Underweight; commercialization delayed, first-mover advantage diminished

Research evidence excerpt

EHang - ADR: Downgrade to Underweight; commercialization delayed, first-mover advantage diminished

Beatrice Lam AC Asia Pacific Equity Research

(852) 2800-8738 04 July 2026 J P M O R G A N

beatrice.lam@jpmorgan.com

Why delayed commercialization disproportionately hurts

EHang

The same regulatory environment does not affect every eVTOL developer equally. We

believe EHang is disproportionately exposed because its competitive strategy was built

around commercializing first, rather than developing the industry’s highest-performance

aircraft.

The EH216-S was intentionally designed as a first-generation commercial platform

capable of reaching certification quickly under a relatively constrained operating

environment. The investment thesis was straightforward: obtain certification ahead of

competitors, begin commercial operations, generate operating cash flow and reinvest

that cash into successive generations of aircraft with longer range, higher payload,

improved charging efficiency and broader urban air mobility use cases.

Instead, commercialization has repeatedly been delayed.

Without meaningful commercial deployment, EHang will remain in a cash-burning

phase for longer than originally anticipated. This delays internally funded product

development while competitors continue progressing toward certification with newer

aircraft designs.

The issue is not simply that commercialization has been postponed. Rather, every year

of delay reduces the value of being first. Certification only creates shareholder value if it

can be converted into commercial operations before competitors narrow the gap.

Management has also acknowledged that meaningful upgrades involving batteries,

propulsion systems, flight-control software or onboard obstacle detection would require