A Chinese-made flying car has captured global attention this month with its first public flight demonstration in Dubai. This isn’t the first time an electric vertical take-off and landing (eVTOL) has taken to the skies, and the market is still in its infancy. But for Chinese electric vehicle maker Xpeng, the parent company behind the aircraft, the achievement does not need to yield immediate returns to count as a victory.

Once seen as China’s Tesla, Xpeng entered the EV market with ambitions to disrupt the industry. It had the vision, the software and the backing of Alibaba. But Tesla’s global lead and fierce competition from domestic rival BYD have turned China’s EV market into a battleground for relentless price competition. That leaves Xpeng still unprofitable, and struggling to define how it can stand out in an increasingly saturated market.

The flying car, officially branded under Aridge, Xpeng’s aerospace subsidiary, may offer a new avenue for differentiation. Electric aircraft can take off vertically, like helicopters, and land in small spaces. Chinese manufacturers are arguably leading the field, while the US boasts efforts by Joby Aviation and Archer Aviation. But whether the economics will work remains uncertain. Development costs are steep, regulations are still evolving and most importantly, consumer demand has yet to be tested.