Joby’s rise was driven by a recent decision from the Federal Aviation Administration (FAA) to let it test eVTOLs directly from its production line. CEO JoeBen Bevirt said at the time the company would produce “tens” of vehicles this year, with commercial flights beginning in 2025.
Joby stock fell over 6% overnight, opening July 19 at $10.10, a market capitalization of about $6.3 billion. The company has yet to report any revenue.
eVTOLs are considered the perfect solution for getting wealthy people from vacation homes to airports.
Last year, Joby signed a deal with Delta Air Lines (NYSE:DAL) that could be worth as much as $200 million. The idea is that Joby eVTOLs would fly between wealthy estates in New York and Los Angeles and nearby airports.
Joby came public through a SPAC called Reinvent Technology Partners in 2021, sponsored by the founders of LinkedIn and Zynga. The stock traded at $10.62 per share on its first day but was at $4.40 per share when the Delta deal was announced.
American Airlines (NASDAQ:AAL) and United Airlines (NASDAQ:UAL) also announced plans for eVTOLs in 2021. American’s deal was with Vertical Aerospace (NYSE:EVTL), a British company. United signed an agreement with Archer Aviation (NYSE:ACHR). Defense contractor Northrop Grumman (NYSE:NOC) is also working on a VTOL, not necessarily electric, that will land on aircraft carriers. The Department of Defense has signed nine companies to design unmanned VTOLs that can travel long distances.
What Happens Next for JOBY Stock?
It will take more than tens of vehicles to convince skeptics that electric VTOLs are a transport revolution. But that revolution is coming.
As of this writing, Dana Blankenhorn 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.