Electric vertical takeoff and landing (eVTOL) aircraft, synonymous with flying cars, are gaining traction as viable transportation alternatives. Accordingly, it should be no surprise to investors that many flying car stocks surged last year. This rise was helped by a broader positive sentiment surrounding riskier investments coupled with the increasing likelihood of interest rate cuts being imminent.
Many of the same macro factors are likely to continue into 2024. As investors look to move out on the risk curve, flying car stocks could be one area of the market that receives outsized focus once again.
The fact that experts project a 58% compounded annual growth rate (CAGR) for this sector by 2040 is notable. Innovation in air transportation and vehicle technology will continue, and these companies are at the cutting edge of this disruption.
For those with the risk tolerance to handle the volatility that comes with the growth potential these flying car stocks have to offer, here are three options to consider.
Archer Aviation (ACHR)
Archer Aviation (NYSE:ACHR) stands out in the eVTOL race, aiming to deploy 6,000 vehicles by 2030. The company’s electric-powered vehicles resemble helicopters, positioning these vehicles well for intra-city travel. Notably, Archer has been a leader in forming strategic partnerships, with its United Airlines (NASDAQ:UAL) order of 100 vehicles standing out as a key catalyst for investors.
Additionally, ACHR stock has seen some stability of late, after announcing its Midnight eVTOL aircraft won the MUSE Design Awards’ “Transportation Design of the Year.” This recognition, resulting from the work of design professional Julien Montousse, reinforces Archer Aviation’s standing as a leader in air mobility.
Archer’s rally of more than 200% last year suggests investors are expecting some blue skies ahead. The company’s commercialization trajectory appears to be one key driver of this rally, with the company penciling in 2025 as its commercialization date. Given that’s only one year away, investors clearly are positioning themselves in the companies they think can take market share and grow fast.
Additionally, Archer has forged local partnerships in the United Arab Emirates and India, aiming to commercialize its flying cars by 2026. Given the global growth potential this sector provides, Archer remains a top option for investors researching flying car stocks.
Joby Aviation (JOBY)
Joby Aviation (NYSE:JOBY) competes with Archer Aviation in developing eVTOLs for commercial and public sale, positioning both companies as close rivals in the flying car industry. While the future of both companies remains uncertain, it’s also true that both companies could succeed given the markets each are chasing.
Notably, Joby Aviation secured a $131 million contract with the Department of Defense, mirroring Archer Aviation’s military partnerships. Additionally, Joby solidified its standing by conducting air traffic simulations with NASA’s Ames Research Center, showcasing commitment to integrating air taxis into existing aerospace systems. Distinguished by progress in the pursuit of its Federal Aviation Administration (FAA) certifications and a notable stock surge of 80% in 2023, Joby stands out among flying car stocks.
Financially resilient, the company defied expectations with a breakeven quarter and closed with $1.1 billion in cash reserves. This, coupled with technological strides and strategic alliances, makes Joby an appealing investment choice for those looking to delve into this space.
Eve Holdings (EVEX)
Eve Holdings (NYSE:EVEX) stands out among flying car stocks for its focus on European routes, diverging from the U.S.-centric approach of most flying car companies. Notably, the company signed a letter of intent with South Korean Urban Air Mobility (UAM) provider Motivation in September, paving the way for operations in East Asia.
Despite being pre-revenue, Eve Holdings, with third-quarter losses at $31.2 million, boasts improvement from the previous year’s $36.7 million loss. An additional consideration is its status as a subsidiary of Brazilian airplane manufacturer Embraer (NYSE:ERJ), potentially granting greater access to financing compared to competitors.
Importantly, Eve has secured a number of key commitments, including a notable 200-unit order from key investor United Airlines. Despite a recent 31% sell-off, EVEX stock has traded roughly flat over the past year. Investors note elevated short interest and low institutional investment, but the positive trend sees more buying than selling among institutions. For investors who can handle some potential turbulence, EVEX offers an interesting option in the flying car investment space.
On the date of publication, Chris MacDonald 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.
