You already know Tesla (NASDAQ: TSLA), the pioneering electric car company that revolutionized the automotive industry. But now, it’s time to meet the Tesla of the skies. Joby Aviation (NYSE: JOBY) is making waves with its cutting-edge air taxis, and the market is taking notice.
In fact, when Joby recently announced its plans to bring its air taxis to Dubai in 2025, which is the same year the company expects to get its aircraft approved for commercial operations by aviation regulators, its stock rose 6.4%.
Thanks to its first-mover advantage, Joby is expected to become the market leader in the electric flying car industry, and and right now JOBY stock is currently trading at just $6, this might be an opportunity for investors to get into the next big thing.
Why is Joby Special?
There are a lot of eVTOL, or electric vertical take-off and landing aircrafts, companies popping up each day, but it’ll take so much time to go through each one of them. What we’re going to do instead, is highlight what’s so special about Joby Aviation.
This company has the first-mover advantage. Founded in 2009, it was one of the very first eVTOL companies, and has been conducting demonstration flights, prototyping, and testing for its aircraft for several years. Its aircraft has so many flying hours under its belt, and according to the company, the vehicle is capable of carrying a pilot along with four passengers and traveling at a maximum speed of up to 200 miles per hour.
While the company’s product is yet to be available to the mass market, it has already proven its capabilities, and the fact that it’s a working product. In fact, its capabilities were even recognized by the U.S. Air Force, which signed a $131 million contract with the company that saw the delivery of a Joby aircraft to the Edwards Air Force Base in California in September of 2023, and the contract also gave the Air Force the option to receive up to 9 aircrafts from the company.
The company is planning to take its product to the mass market soon, with plans to sell one aircraft for around $5 million. Additionally, it’s also taking a different approach from other eVTOL companies, by keeping some aircrafts and operating them under a subscription-based model. That way, the company will guarantee customers coming back and recurring revenue coming in each month.
The Uber Deal
In December of 2023, Uber Technologies (NYSE: UBER) sold its air taxi business, Uber Elevate, to Joby for $75 million, and Uber even agreed to invest a further $75 million in Joby, bringing the total value of the transaction to $125 million.
This was a great deal for Joby, since Uber already has a strong brand, and everyone knows what it is, and that they need to catch an Uber when they want to get to an airport, for example, if they don’t have someone to take them. But, even taking an Uber in highly congested big cities like New York or Los Angeles wouldn’t be viable, and would have you sitting in really bad traffic for a long time.
Therefore, what Joby is planning to do is combine its aircrafts, with Uber’s strong brand, and use Uber Elevate to promote the services of air taxis in these highly congested areas.
Working with NASA
What Joby is doing might sound like futuristic UFOs talk, but it’s actually coming very soon. In fact, the company recently worked with NASA to prove out the air taxi concept, and completed air traffic simulations with the Dallas Fort Worth International Airport Central Terminal, suggesting that up to 45 eVTOL aircrafts could simultaneously be aloft at the airport, with 120 flights per hour.
The air traffic simulation also supported the forecasts for massive air taxi operations in major cities. Joby originally forecast flights averaging 2.3 passengers operating 12 hours a day, leading to $2.2 million in annual revenues per aircraft.
Dubai Contract
As for its deal with Dubai, which states that Joby will start early operations in it in 2025, then launch its air taxi services in the whole of the UAE in early 2026, the contract will last for five years.
The company already identified Dubai International Airport, Palm Jumeirah, Dubai Marina and Dubai Downtown as the launch locations for Dubai’s air taxi service. It also said that a trip from Dubai International Airport to the famous man-made island Palm Jumeirah will take just 10 minutes compared with 45 minutes by car.
In addition to Dubai, the company also announced a deal to partner with Atlantic Aviation to electrify locations in New York and Southern California around Los Angeles to provide air taxi services. Joby will install their Global Electric Aviation Charging System at those locations, providing heliports for trips.
Big Names Behind Joby
Another reason to be bullish on Joby is that it’s got some really big names backing it, including one of the world’s largest automakers, Toyota (OTCMKTS: TOYOF), which became the company’s largest external shareholder after investing $400 million in it.
Adding to this, 39% of Joby’s shares are owned by institutional stockholders, including the Vanguard Group, which has a 4.82% stake in Joby, or 33 million shares, and Baillie Gifford & Co., which owns 8.09% of Joby, or 56 million shares.
That is showing so much confidence by companies that have a lot of money, and whose job is literally investing in companies that they think are going to be successful and are going to give them massive returns.
Joby’s Position Against Competition
Joby is already a mid-cap company with a market cap of $4.39 billion. Of course, there are many other eVTOL manufacturers such as Archer Aviation (NYSE: ACHR), you have the German company Lilium GmbH (NASDAQ: LILM), Vertical Aerospace (NYSE: EVTL), and many others.
But, compared to these three, Joby’s market cap is the largest. Additionally, only Archer Aviation is aiming to take its air taxis to the mass market in 2025 just like Joby, while Lilium GmbH and Vertical Aerospace’s eVTOLs are still under development. Joby is also vertically integrated, meaning that the company designs and manufactures all of its aircrafts by itself in its 130,000 square feet production facilities in Marina, California.
Another catalyst will be the companys improved production capability now that Toyota has agreed to help it build the world’s first air taxi factory in Ohio. This would allow the company to produce 500 aircraft per year at the 140-acre site.
The company is also supported by the U.S. government, and received up to $325 million cin state and local incentives to support its scaling, and the U.S. Department of Energy has invited Joby to submit an application for a loan as a clean energy project.
Healthy Balance Sheet
A good thing to look at before making the decision to invest in a company is its balance sheet, which can tell you if the company has enough money to actually carry out what it says it will. And Joby appears to be up to the challenge.
In September 2023, the company had $1.1 billion in cash on its balance sheet, and what’s even better is that it was debt free. It also broke even in Q3 of 2023, making $1.5 million in the quarter, compared with a $79 million loss during the same period of last year.
JOBY Stock Forecast
Overall, there are a number of reasons to be bullish on JOBY stock, but that doesn’t mean that there are not risks associated with the company. Right now, it could be considered a pretty risky investment since it’s a pre-revenue company, and it likely won’t be profitable for years to come, as the company’s management expects revenues to slowly ramp.
In addition to that, air taxi services are a brand new category of travel that moves beyond the restricted operations of helicopters, so creating a market for this type of product might be very challenging at first.
But, the potential to capitalize on Joby’s first mover advantage could make JOBY stock a good opportunity. The next two years will decide whether JOBY stock will truly become the Tesla of the skies. Upcoming catalysts like the company being approved for commercial operations sometime around 2025 could make it one to watch.
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