Brett Schafer, The Motley Fool
4 min read
Industrial might is back in vogue, and not just for space-industry stocks. A new form of transportation is soon to make its debut in cities around the globe: electric vertical takeoff and landing (eVTOL) vehicles. Joby Aviation (NYSE: JOBY) is one of the publicly traded companies that manufactures these innovative aircraft, and it believes that it can transform transportation across cities.
Its product is neither an airplane nor a helicopter, but something in between, and fully electric-powered. With its stock price currently at just $9 per share, could getting in early on eVTOL pioneer Joby Aviation help make you rich? Let’s take a closer look and find out.
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The future of short-haul flights
The idea for eVTOLs came from two sources: the plague of car traffic in most large cities, and noise pollution from helicopters, which prevents them from operating in many areas. An eVTOL can operate quietly compared to a helicopter, transporting small groups of passengers from point to point using “vertiports” across metro areas.
Joby’s aircraft is currently in the middle of certification with the Federal Aviation Administration (FAA), which requires rigorous testing for all eVTOL start-ups due to the novel nature of the vehicles. Joby began testing in 2018 and is reportedly close to the finish line, aiming to secure full regulatory approval in both the United States and Dubai within the next 12 months.
The company currently generates just a sliver of revenue from its Blade business, which is a helicopter and private-flight rideshare network focused on New York City. In the future, Joby plans to operate its own eVTOL ride-sharing for customers. Instead of just selling commercial aircraft to operators like Boeing, Joby wants to keep its aircraft and sell tickets directly to users through its own vertiport network. It will do so with partners like Delta Air Lines, connecting people at the airport to the potential of eVTOL services, a prime customer use case.
Manufacturing progress and cash burn
To get ahead of anticipated FAA approval, Joby has begun increasing its manufacturing capacity. It is currently producing two eVTOLs a month, for a rate of 24 per year. In the near future, it wants to double this manufacturing pace, and eventually produce 500 vehicles per year. With hundreds of cities around the world that could utilize eVTOL taxi networks, there is theoretical demand for this level of output from Joby and other eVTOL manufacturers racing for FAA approval.
