Flying car stocks have been in the limelight in the last 12 to 24 months. During this time horizon, there has been sharp bullish and bearish moves. However, most investors look at flying car stocks as speculative ideas for short-term trading. Flying car names are also among the hot meme stocks.
I however believe that eVTOL stock have potential beyond just trading or speculation. In the coming quarters, some of the best flying car stocks are likely to be viewed as long term investment ideas. One reason is that most flying car companies are poised to commercialize eVTOL in 2025.
Once commercialization and geographic expansion happens, investor focus is likely to shift towards the long-term potential. The numbers are attractive on that front with the flying car industry likely to be worth $1 trillion by 2040.
Let’s therefore talk about three flying car stocks to buy before they hit mainstream.
EHang Holdings (EH)
EHang Holdings (NASDAQ:EH) stock has remained subdued in the last 12 months. However, considering the business developments, I am bullish on EH stock going ballistic.
Within China, the company’s certified EH216-S pilotless eVTOL commenced commercial operations in Guangzhou and Hefei in December 2023. In April, the flying car company secured Civil Aviation Administration of China certificate for mass production of its EH216-S eVTOL. This will support scaling-up of operations and EHang has already been securing orders for EH216. As the backlog swells, it provides healthy growth visibility.
Another positive to note is that EHang has completed demo flights in UAE, Spain, Costa Rica, Saudi Arabia, and Japan. As the company aggressively expands, there is visibility for stellar growth in the next 24 to 36 months.
For Q1 2024, EHang reported revenue growth of 178% on a year-on-year basis to $8.5 million. Top-line growth can potentially accelerate as the backlog is serviced. In Q1, the company sold 26 units of EH-216 as compared to 11 units in the prior year comparable period.
Archer Aviation (ACHR)
Archer Aviation (NYSE:ACHR) stock was in a phase of sustained correction. However, sentiments have changed significantly in the last one month and ACHR stock has surged by 45%. With the commercialization of eVTOL due in the U.S. in 2025, I expect the positive momentum for ACHR stock to sustain.
It’s worth noting that there has been multiple positive news for the flying car company in the recent past. First, Archer received an additional investment of $55 million from Stellantis (NYSE:STLA) after the completion of the flight test milestone.
Further, Southwest Airlines (NYSE:LUV) signed an agreement with Archer to “develop operational plans for electric air taxi networks utilizing Archer’s eVTOL aircraft at California airports.” I must add here that United Airlines (NYSE:UAL) is another investor and strategic partner in the company. These partnerships and investments underscore the potential Archer’s business holds.
Besides commercialization in the U.S. in 2025, Archer has local partnerships in the UAE, India, and Korea for expansion in the next 24 months. This will support healthy growth and stock upside.
Joby Aviation (JOBY)
Joby Aviation (NYSE:JOBY) is another stock that was in the correction mode in the last few quarters. However, in the last one month, the stock has trended higher by 23%. I expect this reversal rally to sustain as Joby makes steady progress towards commercialization of eVTOL.
In recent news, Joby received the U.S. Federal Aviation authorization to use its proprietary software (ElevateOS) to support high-tempo, on-demand air taxi operations. The eVTOL company has also reaffirmed its plans to launch commercial air taxi operations in 2025. I must add that Joby already has partnerships for expansion in the UAE and Saudi Arabia.
Last month, Joby acquired Xwing’s autonomy division. The latter is a leader in the development of autonomous technology for aviation.
Xwing has 250 fully autonomous flights and more than 500 auto-landings completed to date. It’s also the first company to receive an Air Force Military Flight Release in 2024. This acquisition will support in deepening of partnership with the U.S. Department of Defense.
On the date of publication, Faisal Humayun 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.
On the date of publication, the responsible editor did not have (either directly or indirectly) any positions in the securities mentioned in this article.
