The concept of electric air taxis, or eVTOLs, transitioning from science fiction to reality is advancing as battery technology improves. The critical question is whether a profitable industry can emerge from their production. Joby Aviation (NYSE:JOBY) is a pioneer in the electric vertical takeoff and landing sector, poised to reshape future transportation with a strong stock performance and significant milestones. This has some exciting implications for JOBY stock.
Let’s delve into why JOBY is a promising stock to invest in and how it could turn out for investors shortly.
Execution Will Be the Key
JOBY stock surged nearly 100% year-to-date, driven by growing confidence in the eVTOL sector. A $131 million contract with the U.S. Air Force, early delivery, and vital partnerships with NASA and the Air Force underline JOBY’s leading role in this industry.
Joby aims to dominate the skies with aerial ridesharing networks, partnering with industry giants like Delta and Uber. It’s delivered eVTOL aircraft to the U.S. Air Force and holds $1.2 billion in cash. With FAA approval on most certification plans, commercial flights are set for 2025.
For investors considering this stock now, it will be essential to watch how Joby executes its growth plans moving forward. Thus far, the company has made excellent progress in outlining its growth trajectory to investors. If Joby can bring its plans to life, this stock could have a big upside from here.
Strong Alliances and Partnerships
One of the key reasons why many investors remain bullish on Joby is the progress the company has made in creating alliances and partnerships with key industry players.
Joby Aviation boasts substantial backing from Toyota, Delta Air Lines, and Uber. Last quarter, the company bolstered its financial position with $280 million in new investments. Under a $131 million U.S. Air Force contract, Joby supplies its top eVTOL aircraft to Edwards Air Force Base in early 2024.
Additionally, Joby has inked a long-term deal with Toyota for critical powertrain and actuation components to manufacture its electric aircraft. This agreement strengthens the ongoing collaboration between the two firms, with Toyota being Joby’s largest external investor, having contributed approximately $400 million to the company. The partnership has encompassed various projects to support aircraft production and assembly.
Additionally, Joby’s CEO Joeben Bevirt has outlined how Delta’s airport and city authority relationships and its customer base were more vital than the investment. These connections are crucial for realizing electric air taxis. Bevirt expressed excitement about integrating air taxi flights with Delta’s services, enhancing the customer experience. Delta’s partnerships with the Port Authority of New York and Los Angeles World Airports are pivotal for vertiport development around Delta’s main hubs.
Joby Electric Taxis Will Fly in 2025
JoeBen Bevirt, CEO of Joby Aviation, is a proponent of the emerging industry of electric air taxis (eVTOLs), believing we’ll see this technology grace our skies within the next two years. Joby Aviation recently delivered an eVTOL to the Air Force. Bevirt is optimistic that his Santa Cruz-based company, largely backed by Toyota, can achieve its goal of starting commercial air taxi service by 2025. However, like many eVTOL startups, Joby is operating at a loss, with losses exceeding $400 million in 2021-2022. The timeline for profitability remains uncertain.
But that does not mean investors should shy away from Joby Aviation stock. Now is the perfect time to invest in this pioneering company for those who believe in this industry and that Joby has a shot of capturing significant market share.
Joby Aviation aims to alleviate urban congestion and pollution with its eVTOL aircraft, operating quietly and emitting zero emissions. The company’s air taxi service is expected to launch in 2023 in select U.S. markets and then expand globally. I think the company certainly has the potential to do so – it’s up to the individual investor whether they believe the company can execute over the next two years.
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.
