EHang Holdings Downgraded to Neutral by Goldman Sachs on Slower Commercialization

Goldman Sachs has downgraded EHang Holdings to Neutral from a previous Buy rating, citing a slower path to commercial operations and a valuation it now considers fair. The investment bank significantly reduced its 12-month price target for the electric vertical takeoff and landing (eVTOL) aircraft maker to $7.30 from $16.90.

Slower Rollout Prompts Reassessment

The downgrade reflects a more cautious outlook on the near-term deployment of EHang's EH216-S aircraft. In a note to clients, Goldman Sachs stated its previous assumptions for autonomous aerial vehicle (AAV) shipments were overly optimistic.

The bank pointed to several factors for its revised view:

• Delays in the launch of commercial ticketed services.
• The early stage of the company's overseas expansion efforts.
• The nascent development of its longer-range VT-35 aircraft program.

Forecasts Trimmed Despite Long-Term Potential

Ad

Despite the more conservative short-term view, Goldman Sachs remains positive on the long-term prospects for China's burgeoning "low-altitude economy." The firm still projects EHang's revenue will grow at a 77% compound annual rate between 2026 and 2028, driven by increasing aircraft shipments and improving profitability.

However, analysts have lowered their earnings forecasts for 2027 and 2028. This adjustment accounts for the slower commercialization pace, which reduces near-term revenue expectations, and anticipates increased spending on research and development.

Broader Industry Support Remains Strong

Goldman Sachs noted that the broader eVTOL industry in China continues to benefit from strong government support and expanding use cases, including sightseeing, logistics, and future air taxi services. Regulatory frameworks have been strengthened through China's Civil Aviation Law and the 15th Five-Year Plan, while provincial governments are offering subsidies to support eVTOL manufacturing and operations.

According to the bank, potential catalysts for a future re-rating of EHang's stock include faster-than-expected commercialization, stronger market demand for its technology, and accelerated development of the surrounding ecosystem.