Flying vehicles are no longer exclusive to movie screens and the Jetsons. They are no longer science fiction but rather quickly becoming a reality. Profits or even revenues, on the other hand, still reside firmly in the realm of fantasy. Flying vehicles are technically called electric vertical takeoff and landing (eVTOL). The race to get approved and commercialized is well underway, with plans to sell these aircraft and launch commercial air taxi services. Here are two eVTOL players that risk-tolerant investors and speculators can keep an eye on to take flight and soar or crash and burn into 2024.
Joby Aviation Inc. (NASDAQ: JOBY)
Urban air mobility company Joby is developing eVTOL aircraft to operate as an air taxi company in 2024. Its eVTOL is designed to carry up to four passengers and a pilot. It can fly up to 150 and 200 miles per hour on a single electric charge. It can take off and land vertically, making it ideal for short-distance flights in an urban environment without airports and runways. The company has raised over $1 billion in funding from investors ranging from Intel Co. (NASDAQ: INTC) to partner Toyota Motor Co. (NYSE: TM).
Milestone Timeline
In 2020, Joby received its design organization approval (DOA) from the Federal Aviation Administration (FAA). It also partners with Uber Technologies Inc. (NYSE: UBER) for its air taxi service while acquiring Uber's Elevate division. Joby became the first eVTOL company to receive airworthiness approval from the U.S. Air Force in December 2020.
In 2021, Joby completed its first full-scale eVTOL aircraft and commenced flight testing. Its pre-production prototype flew over 5,300 miles, including a 154.6-mile flight on a single charge.
In 2022, Joby received its Part 135 Air Carrier Certificate, allowing Joby to operate a commercial air taxi service. Its partnership with NASA confirms the revolutionary noise footprint of its aircraft. It signed a deal with Delta Air Lines Inc. (NYSE: DAL) to deliver a home-to-airport air taxi service.
In 2023, Joby launched production and announced plans to build its first scaled production site in Dayton, OH, at the 140-acre site at Dayton International Airport. Longtime Toyota will support and advise. Construction is expected to start in 2024 and come online in 2025. The new production site can deliver up to 500 aircraft annually with over two million square feet of manufacturing space. Joby made its first delivery to the U.S. Air Force as part of its $131 million contract to deliver and operate aircraft for the United States Department of Defense.
On June 28, 2023, the FAA issued Joby a "Special Airworthiness Certificate" U.S. approval for its first production prototype, enabling it to begin flight testing for its air taxi company. The company issued a statement, "The aircraft is expected to become the first-ever eVTOL aircraft to be delivered to a customer when it moves to Edwards Air Force Base in 2024 to be operated by Joby as part of the Company's Agility Prime contract with the U.S. Air Force, worth up to $131 million."
Joby also landed a $100 million investment from Korea's SK Telecom as part of an expanded partnership. Joby stock spikes 40% on the news. Joby Aviation plans to launch commercial passenger operations of its air taxi service in 2025 through its partnership with Delta Air Lines.
Q2 2023 Earnings Report
Joby reported a Q2 2023 loss of 45 cents per share, missing consensus analyst estimates for a loss of 15 cents per share. Adjusted EBITDA for Q2 2023 was a loss of $83.3 million related to the costs associated with aircraft development, certification and manufacturing. The company didn't report any revenues.
Kerrisdale Capital Short Seller Report
On October 10, 2023, short-seller Kerrisdale Capital issued a 41-page bearish report on Joby, claiming the company is years away from generating meaningful revenues and likely will go bankrupt before burning through billions. The physical limitations of lithium-ion batteries make its eVTOL a "limited-use range-hobbled curiosity." Kerrisdale discloses they are short the stock. Shares have fallen nearly 15% from $6.58 since the release. JOBY has a 15.87% short interest.
Joby Aviation analyst ratings and price targets are at MarketBeat. Joby Aviation peers and competitor stocks are found on the MarketBeat stock screener.
Daily Descending Triangle Pattern
The daily candlestick chart on JOBY illustrates a descending triangle pattern. The descending trendline commenced at $11.98 in June 2023, after peaking on the announcement of the U.S. FAA special certification. Shares have since been cascading lower, falling through the weekly market structure low (MSL) trigger at $7.25. The flat-bottom horizontal triangle trendline has attempted to hold the support at $6.19. JOBY broke down through the triangle support as the weekly relative strength index (RSI) fell towards the 30 band. Pullback support levels are at $5.01, $4.58, $4.10 and $3.72.
Archer Aviation Inc. (NASDAQ: ACHR)
Archer Aviation is another eVTOL company based out of San Jose, California. Its eVTOL is designed to fly up to 100 miles with four passengers and a pilot with top speeds of up to 150 miles per hour. The company plans to deploy 6,000 aircraft by 2030. It landed an Air Force contract valued up to $140 million to deliver six Midnight eVTOL aircraft. They will be used for personnel transport, rescue operations and supply chain logistics. Archer partnered with United Airlines Holdings Inc. (NYSE: UAL) to build a network that will enable flights from Newark Airport to New York City in 10 minutes. United plans to purchase 100 eVTOLs.
High-Volume Manufacturing Facility Construction
On October 11, 2023, Archer announced that it had closed financing for its high-volume manufacturing facility construction in Covington, Georgia. Construction is set to begin in March 2024. Phase one of the facility is designed to produce up to 650 aircraft annually.
Stellantis Investment
On October 19, 2023, Archer Aviation announced that big automaker Stellantis NV (NASDAQ: STLA) had purchased 12.3 million shares at $5.68 on October 16, 2023. Stellantis owns 31.04 million shares total and a 15.1% stake in the company. Stellantis has invested $70 million in Archer.
Timeline Projection
Archer hopes to receive FAA-type certification for its Midnight eVTOL by late 2024. Between 2025 and 2028, Archer expects to build out the urban air mobility (UAM) platform "trunk" and "branch" operations and scale up to 2,000 aircraft per year. It also plans to retrofit heliports and regional airports.
After 2028, Archer plans to bump up manufacturing toward high-volume targets and accomplish a high rate of flight operations. Archer aims to introduce autonomous aircraft and continues innovating powertrain systems and acoustics. Archer signed a memorandum of understanding (MOU) with the Abu Dhabi Investment Office to make Abu Dhabi its first international launch partner when it plans to launch air taxi operations in 2026.
Short Seller Report
On August 15, 2023, short seller Grizzly Research issued a bearish report on ACHR stock. They point out that the company had announced that their small-scale manufacturing facility would be operational by the end of 2022 but kept changing it with no sign of "anything approaching production readiness." They believe earnings an FAA Production Certification, a permit for mass producing its eVTOL for commercial use, is much further away than 2028. They state, "… ACHR seems set up for a metaphoric crash landing."
Archer Aviation analyst ratings and price targets are at MarketBeat.
Daily Descending Triangle
The daily candlestick chart for ACHR is similar to JOBY with a descending triangle pattern. However, ACHR hasn't yet broken down through its flat-bottom triangle horizontal trendline at $4.77. The daily RSI is falling under the 40-band. The daily MSL trigger couldn't break out at $5.23. Pullback support levels are at $4.44, $3.88, $3.65 and $3.28.
