Oh dear, Wolfpack has looked properly at EHang.

In their own words, Wolfpack is a global financial research & due diligence firm dedicated to protecting investors by ensuring the natural balance of the financial ecosystem.

Pretty meaningless to me! But the fact that people that understand investing and stuff are looking properly at AAM/UAM companies is important.

It might start to lift the curtain on VC backed BS that makes up 90% of the current market.

EHang has a great smaller delivery platform that they should be pushing but its the manned flying car that has lifted them above the crowd.

This is what Wolfpack said about EHang and below that, the response from EHang. As I type the AAM darling is 60% down in trading.

We are short Ehang.

Today, we reveal why we believe EHang NASDAQ: EH is an elaborate stock promotion, built on largely fabricated revenues based on sham sales contracts with a customer who appears to us to be more interested in helping inflate the value of its investment in EH i.e., pump EH’s stock price than actually buying its products. EH has perpetuated its story with a collection of lies about its products, manufacturing, revenues, partnerships, and potential regulatory approval of its purported main business, an “autonomous” aerial vehicle “AAV” ridesharing network.


We conclude that EH’s relationship with its primary purported customer is a sham. Government records and credit reports show that EH’s major customer is Shanghai Kunxiang Intelligent Technology Co., Ltd. hereinafter referred to as “Kunxiang”. We have gathered extensive evidence including behind-the-scenes photographs, recorded phone calls, and videos of on-site visits to EH’s various facilities, as well as Kunxiang’s offices which lead us to believe that Kunxiang signed sham sales contracts to benefit its investment stock price in EH

• Kunxiang has an exaggerated physical presence and its real operations appear to be a fraction of what is claimed. Out of the 3 addresses listed on Kunxiang’s website, one is a hotel with no Kunxiang presence, one is a 13th floor address of an 11-story building, and the last one had only one Kunxiang employee in the office on a weekday afternoon.

• To the extent Kunxiang actually does sell vehicles, it did not want to sell EH’s products to us. When asked, the only employee on-site at Kunxiang, who claimed to be the finance manager, had no hesitation voicing his disapproval of the EH216, and instead offered their own, supposedly much higher quality products for sale.

• Kunxiang appears to be a willing participant in EH’s stock promotion. According to the same finance manager at Kunxiang, Kunxiang made an undisclosed RMB100 million ~$14 million pre-IPO investment in EH, which leads us to believe its true motive for signing these shambolic contracts was to benefit its investment, which is worth ~RMB473 million ~$68 million today.

• As is common with a sham customer, SAIC files and national credit reports show that Kunxiang was established just 9 days before it signed a RMB450 million ~$65 million sales contract with EH. Kunxiang had only RMB10 million ~$1.4 million of registered capital, rendering far too thinly capitalized to actually fulfill this purported sales contract. Nonetheless, Kunxiang signed another RMB30 million ~$4.3 million contract with EH four months later.

• One of the sloppiest details of this “customer/supplier” relationship, the first purported sales agreement between EH and Kunxiang provides that Kunxiang will supposedly pay a per unit “per set” price of RMB150 million ~$21.5 million. We assume that before the second purported agreement was signed four months later, EH realized that the unit price was too high to be believable and cut it to RMB1.5 million ~$215k, 1% of the price in the first contract.

• Between September 10, 2019 and October 31, 2019, EH filed a confidentiality request with the SEC to redact the prices on these contracts, likely because the prices are so absurd that they would ruin EH’s credibility if seen by investors or competitors. We only found the unredacted versions of these contracts within the SEC’s EDGAR archive

Also common with a stock promotion, EH has only collected on a fraction of its reported sales since its mid-December 2019 IPO. We see EH’s collection rate of only 20% and DSOs at nearly 200 days despite its purported credit terms of up to 180 days as a clear indication of fabricated revenues.

• EH has reported RMB125.5 million ~$18 million in total revenues since its December 2019 IPO.

• During the same period, its accounts receivable increased by RMB96.2 million ~$13.8 million.

• This means that EH has only collected RMB25.2million ~$3.6 million in cash since becoming a publicly traded company. Typical of a stock promotion, in just 14 months as a publicly traded company, EH’s PR team has put out 50 press releases, according to Globe Newswire. However, EH’s constant stream of press releases are easily proven untrue. For example:

• EH has announced numerous “flight certifications” and “long-term” approvals for its “passenger-grade” EH216 in the US, Canada and various countries throughout Europe.

• According to aviation regulators or experts in aviation regulation in the US, Canada and Europe, EH has only received permits for recreational test flights of its drones in specified areas, below a specified altitude and at a specified time. In no way are these permits endorsements of EH’s “passenger-grade” claims, nor are they “regulatory breakthroughs” of any kind.

• EH also claims in an English PR to have received the “World’s First Commercial Pilot Operation Approval of Passenger-Grade AAVs for Air Logistics Uses” from China’s CAAC. However, the title of the Chinese version of the same PR says nothing about “commercial” or “passenger-grade” What EH obtained was “特定类无人机试运行批准函” special approval letter for trial runs of drones of a specified class. CAAC had granted the same license to at least one other company in Hangzhou, China one year earlier in 2019.

• EH consistently makes different claims regarding regulatory approvals in the English and Chinese versions of its press releases. In English, EH makes false claims of commercial approval of its vehicles the EH216 by Chinese regulators. In its Chinese press releases, EH makes false claims of commercial approvals by regulators in the US, Canada, and Europe.

Download Full Report here

EHangs response

EHang Holdings Limited (Nasdaq: EH) (“EHang” or the “Company”), the world’s leading autonomous aerial vehicle (“AAV”) technology platform company, today issued the following response to the allegations raised in a report by Wolfpack Research dated February 16, 2021. The Company strongly believes that the report contains numerous errors, unsubstantiated statements, and misinterpretation of information.

The Company will consider any necessary and appropriate course of action to protect the interest of the Company and all of its shareholders. EHang is committed to maintaining the highest standards of corporate governance, as well as transparent and timely disclosure in compliance with the applicable rules and regulations of the United States Securities and Exchange Commission and the Nasdaq Stock Market.

By Gary Mortimer

Founder and Editor of sUAS News | Gary Mortimer has been a commercial balloon pilot for 25 years and also flies full-size helicopters. Prior to that, he made tea and coffee in air traffic control towers across the UK as a member of the Royal Air Force.