EHang Holdings Ltd. (HANG.US) is working hard to make futuristic flying cars reality. But it’s flying into some capital headwinds in that process, potentially leading some investors to refrain from betting too big on the company.
Last Friday, EHang — a maker of autonomous aerial vehicles (AAVs) that can carry passengers or deliver cargoes — said it formed a new “strategic partnership” that immediately brought in new capital. The tie-up will see Qingdao West Coast New Area, a government body from the northeastern city of Qingdao, provide EHang with $10 million in fresh capital by buying new shares in the company. EHang will sell the shares for the average closing price of its American depositary shares (ADSs) for the 30 trading days through last Tuesday.
While the deal won’t close until the first quarter of 2023, EHang has already received the yuan equivalent of the amount and plans to use the funds as working capital and for general purposes. And should it require more money, Qingdao West Coast New Area or its affiliates may invest another $10 million down the road.