The urban mobility sector teeters on revolution, promising a multi-billion-dollar market with pivotal investment, regulatory leniency, and consumer interest. Comparable to the EV industry’s growth, the flying car or vertical aviation market, led by companies like Joby Aviation (NYSE:JOBY) stock, envisions scalable electric vertical takeoff and landing (eVTOL) aircraft for short-distance travel.
Understanding that eVTOLs, or “flying cars,” represent emerging technologies, it’s evident that regulatory approval is paramount as these vehicles enter the market. Joby has made notable progress, securing FAA certification for its propulsion system in early February.
Subsequently, JOBY stock achieved a significant milestone by becoming the first eVTOL company to complete the third stage of the FAA-type certification process last February. This progress signals promising prospects for Joby’s share price as it moves closer to full-type certification.
Despite JOBY’s modest stock value of around $5 per share, here are three compelling reasons to invest now.
Final Guidelines Released
The Federal Aviation Administration issued final airworthiness criteria for Joby Aviation’s eVTOL aircraft, a first for the US air taxi segment. Joby’s Model JAS4-1 powered lift gained certification without requiring design changes, marking a milestone in the company’s pursuit of type certification. The FAA’s ruling also sets a precedent for other eVTOL developers following Joby’s lead.
Joby’s all-electric aircraft, the JAS4-1, boasts a maximum gross take-off weight of 2,177kg (4,800lb) and features six tilting rotors on a conventional wing and a V-tail, all constructed from composite materials. Designed for one pilot and four passengers, it serves commercial air taxi and defense purposes. The FAA classifies eVTOLs as powered-lift vehicles, requiring unique airworthiness criteria for each model.
The Model JAS4-1 combines rotorcraft capabilities for take-off and landing with airplane functionalities for cruising, utilizing electric engines to power six five-bladed composite variable-pitch propellers.
Hiring for Dayton Facility
Last March 5, JOBY stock commenced hiring for its Dayton operations, securing a vacant facility at Dayton International Airport for aircraft part manufacturing. The California-based company, specializing in electric air taxis, aims to produce up to 500 aircraft annually.
Converting the former U.S. Postal Service facility into a high-tech manufacturing center, Joby plans to start subtractive manufacturing of titanium and aluminum aircraft parts later this year. Didier Papadopoulos, Joby’s president of aircraft OEM, emphasized the growth of their Dayton workforce.
Joby intends to construct more extensive facilities on unused land at Dayton airport, adjacent to the acquired postal service building. The Dayton City Commission recently endorsed a ground lease with Joby for the former post office structure.
Negotiations continue between Joby and city officials regarding approximately 140 acres of neighboring vacant land. Joby plans to renovate the building independently without city assistance.
In September, Joby revealed Dayton as the chosen location for its expanded manufacturing hub, pledging a $500 million investment and the potential creation of 2,000 jobs.
Extensive Growth
JOBY stock prepared for its eVTOL aircraft by establishing urban air mobility infrastructure nationwide. In mid-January, it partnered with Atlantic to electrify California and New York aviation infrastructure. This move sets the stage for Joby’s anticipated air taxi service launch. Additionally, Joby secured exclusive rights from Dubai’s Road and Transport Authority for a six-year air taxi service in the UAE’s central city, slated to begin in 2026.
Financial figures are crucial in stock analysis, especially for startups like JOBY. Despite being pre-revenue, its partnerships hint at long-term potential. Progress in type certification also underscores future opportunities. While JOBY faces annual losses, it maintains a substantial cash balance, surpassing $1 billion as of December 31, 2023. With conservative spending, it has several years of financial runway, with the potential for future equity raises to fund research and development.
All these factors considered, JOBY stock remains a buy, at least in my book, for growth investors looking at this nascent sector.
On the date of publication, Chris MacDonald 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.
