EHang Issues Statement “On Developing US-China Tariff War and Global Stock Market Turmoil”

EHang has issued a state­ment regard­ing the recent tar­iff devel­op­ments between Chi­na and the U.S as well as the glob­al stock mar­ket tur­moil and how the com­pa­ny may be affect­ed.

A spokesper­son said on Fri­day (April 4th), “Recent U.S tar­iff adjust­ments on cer­tain Chi­nese goods have trig­gered glob­al mar­ket volatil­i­ty and EHang has expe­ri­enced short-term share price fluc­tu­a­tions dri­ven by mar­ket sen­ti­ment.” The state­ment adds, “The tar­iff mea­sures announced by both gov­ern­ments are not expect­ed to have any mate­r­i­al impact on EHang’s oper­a­tions.” 

Dur­ing the last 5 trad­ing days alone, EHang shares have fall­en by 21 per­cent (present price USD16.59). A recent high occurred on Feb­ru­ary 19th (USD26.45). Yet, when viewed over a six month peri­od, the company’s share price has only fall­en by 6.38 per­cent.

The announce­ment con­tin­ues, “The com­pa­ny does not cur­rent­ly export its autonomous aer­i­al vehi­cles or relat­ed prod­ucts to the Amer­i­can mar­ket, nor does it rely on U.S‑origin com­po­nents in its man­u­fac­tur­ing process­es.” Adding, “Our sup­ply chain remains secure and inde­pen­dent, ensur­ing no oper­a­tional dis­rup­tion due to trade pol­i­cy changes.”

Once more, this share price fall rais­es the ques­tion: Why does EHang con­tin­ue to remain trad­ing on the U.S NASDAQ? Sure­ly, leav­ing and mov­ing to one of the main Chi­nese Stock Mar­ket indices like Bei­jing, Shang­hai or Shen­zhen Stock Exchanges, is sure­ly a more sen­si­ble step for both the com­pa­ny and its investors?

To put this in per­spec­tive. In 2024, EHang gen­er­at­ed 95 per­cent of its air mobil­i­ty rev­enues from the Chi­nese mar­ket. And when it comes to autonomous flight, ver­ti­port infra­struc­ture, sales and prof­itabil­i­ty, the com­pa­ny is, per­haps, five years or more ahead of its main Amer­i­can rivals Joby and Archer Avi­a­tion.

Giv­en the geopol­i­tics, espe­cial­ly under a U.S Trump admin­is­tra­tion, it is unlike­ly, EHang will make any inroads into Amer­i­ca. In fact, it is bet­ter placed to expand in to Europe.

This injus­tice, as some investors may view it, is shown by the share price of its two main U.S rivals using the 6 month graph.

Archer, in par­tic­u­lar, has faired well, helped by the sup­port of infa­mous Wall Street investor, Cathie Wood, who now owns around USD200 mil­lion worth, rep­re­sent­ing 2.28 per­cent of her equi­ty port­fo­lio (12th largest hold­ing). In fact, she owns 18.8 per­cent of the out­stand­ing Archer Avi­a­tion stock. The first trade was made in Q3 2021, fol­lowed by a fur­ther 13 trans­ac­tions since. Even after all the Stock Mar­ket tur­moil, Archer is still up 120 per­cent. A sur­pris­ing feat giv­en the com­pa­ny lags behind Joby with its air­craft progress and is, per­haps, five years behind EHang in busi­ness devel­op­ment.

For more infor­ma­tion

https://www.ehang.com

(Top image: markets.businessinsider.com)

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