Investors are aware that the same pressures facing the automotive industry also affect the aviation industry. The environmental impact of burning fossil fuels to power transport has come under scrutiny for both. Therefore, electric aviation startups are beginning to garner the attention that electric vehicle (EV) firms have, and investors have grown acutely interested in the stocks of both industries.
Currently, the focus is squarely on electric vertical take-off and landing (eVTOL) aircraft. Many of the leading names are startups developing what are, essentially, EV helicopters. That said, the major names in aviation are also considering how electrification is set to disrupt their operations and are actively reacting.
Joby Aviation (JOBY)
Joby Aviation (NYSE:JOBY) is a pure-play eVTOL firm and stock with a lot of potential. The company is developing its business to encompass both public and private business lines. It has developed strong relationships with the government and will begin some operations at U.S. Air Force bases in 2024. The company is also developing significant commercial operations and plans to shuttle passengers to and from high-traffic areas including New York City airports.
Joby Aviation was the first firm to complete stages 1 and 2 of the certification process. Thus, it’s reasonable to assume that the company could be cleared before any others and receive full FAA approval to commence commercial operations.
At the moment, Joby Aviation continues to burn through mountains of cash as it approaches that goal. The firm posted a net loss of nearly $400 million in the first half of 2023. $286 million of that loss was incurred in the last three months. It’s clear that the company is spending money to make money.
That said, Joby Aviation remains well-funded. It also produced its first production prototype which is currently being flight tested.
Archer Aviation (ACHR)
Archer Aviation (NYSE:ACHR) is a direct competitor of Joby Aviation. Both firms are developing similar eVTOL aircraft targeting similar customer bases. And both firms are burning through piles of cash in order to do so.
In that regard, Archer Aviation is doing better given that its net loss of $181.4 million was $100 million lower than Joby Aviation’s. Archer Aviation’s Midnight eVTOL could end up being the first such vehicle delivered to a customer. The company expects to deliver the Midnight aircraft to the U.S. Air Force late this year or early 2024. It has also received FAA certification for its aircraft and is in the process of flight testing.
ACHR is on track to begin mass production in mid-2024 at its Georgia plant that it has co-developed with Stellantis (NYSE:STLA). The company has also signed contracts with the Department of Defense worth as much as $142 million. Like Joby Aviation, it seems that a lot more will be known about Archer Aviation as it begins operations in earnest over the next year or so.
Eve Holding (EVEX)
Eve Holding (NYSE:EVEX) is a competitor to the two firms discussed above and its stock should be considered along with theirs. That said, Eve Holding is further behind both Joby Aviation and Archer Aviation in terms of its development.
Joby Aviation is the leader, with Archer Aviation following close behind. Eve Holding is somewhere behind both. The company is focused on eVTOL aircraft and the Urban Air Mobility (UAM) ecosystem just as its peers are. However, unlike its two competitors, Eve Holding’s losses are narrowing, having gone from $107.2 million to $31.4 million from Q2 20222 to Q2 2023, respectively.
If you’re familiar with aircraft manufacturing, you likely know that Embraer (NYSE:ERJ) is competitive, but not among top-tier firms. Those top-tier firms have aligned themselves with Joby and Archer while Embraer is financing Eve Holding. That’s where EVEX stock slots relative to JOBY and ACHR shares. It has a puncher’s chance, but its competitors jumped out ahead of it and that’s why they’ve received attention and investment from leading firms.
On the date of publication, Alex Sirois did not have (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.
