HT Aero, an urban air mobility (UAM) company backed by Chinese electric vehicle manufacturer XPeng, has raised $500 million.

IDG Capital, 5Y Capital and XPeng Inc. led the Series A round – the largest single-tranche fundraising to date in Asia’s low-altitude flying vehicle sector – with participation from Sequoia China, Eastern Bell Capital, GGV Capital, GL Ventures and Yunfeng Capital.

With the funds, HT Aero will invest in research and development, hire talent and “continue to gain airworthiness provision and certification,” says Deli Zhao, founder and president of HT Aero.

HT Aero is also planning to officially roll out its next-generation model, which will be a fully integrated flying vehicle and automobile designed for air and road travel, in 2024.

Compared to many eVTOL (electric vertical take-off and landing) companies, which target services for the business sector, HT Aero says it is focused on developing “three-dimensional, smart and sustainable” UAM solutions for individual consumers.

“HT Aero’s [deep] roots in proven technology and sophisticated R&D capabilities will help it jumpstart the industrialization of flying cars,” says Guangfu Cui, partner of IDG Capital.

“We believe that the flying vehicle sector will be a trillion-dollar market. The rapid technological evolution of batteries, autonomous driving and materials science provide the synergies needed to create a new paradigm for flying cars.”

According to Scott Davidson, managing director in Accenture’s travel industry group, advances in UAM technology will have implications across all corners of the travel industry – from aviation to accommodations to cruise.

“[The] disruptive potential of UAM is such that no travel company can afford to wait before thinking through the implications,” Davidson wrote earlier this week on PhocusWire.

“Ultimately, everything points to the fact that it’s a question of when, not if, UAM will take off. Travel companies need to be fully onboard with the risks and opportunities before that happens.”

Recent activity in the air taxi space includes Brazilian airline Azul signing a $1 billion commercial and strategic alliance with German eVTOL startup Lilium in August, and in January 2020, Joby Aviation received a major investment of $590 million led by Toyota Motor Corporation.

In addition, Japan Airlines has partnered with aircraft leasing company Avolon to introduce an eVTOL ride-sharing business in Japan.

The carrier has the right to buy or lease 50 eVTOL aircraft through the partnership as well as the option for a further 50.