Electric vertical takeoff and landing (eVTOL) aircraft, small aircraft that land and take off like helicopters, are being labeled by some as flying cars. Indeed, they are small like cars and will function in much the same way, since they will take a small number of passengers short distances. Moreover, because eVTOLs use electricity for fuel, while helicopters utilize jet fuel, eVTOLs are significantly cheaper and more environmentally friendly. And of course, like helicopters, eVTOLs enable travelers to completely avoid automobile traffic and get to their destinations extraordinarily quickly.
Multiple large companies are investing in eVTOLs, and the Federal Aviation Administration (FAA) appears to view the sector favorably. For long-term investors with high risk tolerance, here are three flying car stocks to buy.
Joby Aviation (JOBY)
Seeking Alpha reported that Joby (NYSE:JOBY) “has been flying prototype” eVTOLs since 2017. Moreover, the company has partnered with NASA, and its investors include JetBlue (NASDAQ:JBLU), Toyota (NYSE:TM), BlackRock (NYSE:BLK) and Uber (NYSE:UBER).
And indicating that the government is on board with Joby’s plan, the FAA recently granted the company permission to test its prototype plane.
Investment bank Canaccord Genuity has a “buy” rating and an $11 price target on Joby. According to the bank, Joby is “the best capitalized of the various public and private urban air mobility companies” and has launched partnerships with Delta (NYSE:DAL), Uber, and the Pentagon. Canaccord expects the FAA to allow Joby to start flying its eVTOLs commercially in 2025.
The company’s impressive list of partners and investors remove a great deal of the risk from JOBY stock.
Archer Aviation (ACHR)
Archer (NYSE:ACHR) “has developed electric air taxis that can transport four people, in addition to a pilot, 60 miles while traveling 150 miles per hour.”
The company is partnering with United Airlines (NYSE:UAL) and the Europe-based automaker Stellantis (NYSE:STLA), which “will help build Archer’s aircraft and will invest $150 million in the company.” Also noteworthy is that Stellantis recently reported that it had obtained a 10.6% stake in Archer. As is the case with Joby, Archer’s impressive partners validate the firm and its eVTOLs,
Investment bank Canaccord Genuity recently paid ACHR a high compliment, writing that “In our view, JOBY and ACHR are the closest to having their respective aircraft types certified by regulators, with years of flight tests under their belts.” The bank predicts that Archer will be the first to obtain final FAA approval to operate commercial flights in 2024.
Given Archer’s impressive bona fides, I believe that it’s one of the best flying car stocks to buy at this point.
Embraer (ERJ)
Embraer (NYSE:ERJ) is a less risky, more conservative way to play the flying car trend. Brazil-based Embraer, which produces many different types of aircraft and generated revenue of 4.5 billion Brazilian Real in 2022, equal to about $940 million, has launched an eVTOl subsidiary called Eve. ERJ is seeking to double its revenue by 2030.
Eve is able, of course, to access all of Embraer’s equipment, facilities, and expertise. Moreover, the subsidiary will be able to easily partner with the many airlines that buy planes from Embraer.
Eve intends to kick off its operations in 2026. The subsidiary has begun the process of obtaining certifications from the Brazilian government. Importantly, Eve is likely to face much less competition in Latin America than the U.S. based eVTOL start-ups. Finally, Eve will definitely have access to a great deal of capital from Embraer.
On the date of publication, Larry Ramer did not hold (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
