Price pullbacks are healthy for the stock market, happening at a 15% correction every other year on average. The recent market correction offers flying car stocks to watch an opportunity for the big future play.

Whether one calls them air taxis, eVTOLs or flying cars, electrified air transportation is a natural outgrowth of miniature quadcopter technology. Across many variations, their main advantage is to take off and land vertically in urban zones without producing enormous noise like helicopters.

Not counting logistics delivery, air taxi service alone is projected to grow at a CAGR of 20.24%, from $3.68 billion in 2023 to $15.27 billion by 2031, per Kings Research. However, companies have to overcome many regulatory and technical challenges to make it happen. 

Here are the three flying car stocks to watch as the most likely to succeed in jumping over those hoops with flying colors.

EHang Holdings Limited ADS (EH)

Similar to Serve Robotics (NASDAQ:SERV), China’s EHang (NASDAQ:EH) develops its own autonomous aerial vehicles (AAVs) for urban air mobility. However, while Serve relies on Magna International (NYSE:MGA) to manufacture its grounded sidewalk robots, EHang manufactures its own drones like the EH216-S.

Therefore, EHang should not be viewed as a robotics-as-a-service (RaaS) company. More ambitious, EHang is forging partnerships with cities to pave the road for the emerging low-altitude economy rather than supplement existing delivery services. This includes AAV solutions for commercial (passenger and cargo) airlines, logistics (delivery) and aerial tourism. 

So far, the company established strategic partnerships with Shenzhen, Guangzhou, Llíria in Spain, Lyon in France and Dubai in UAE. With EHang’s lower range of up to 40km and payload of up to 260kg, the company is counting on mass production of cheaper AAVs in metropolitan areas.

In regulatory-friendly China, at the end of July, the company delivered 10 units to Xishan Tourism after having completed passenger-carrying flights and receiving Air Operator Certificate. To bolster its portfolio of AAVs, EHang also has variants EH216-F (firefighting), EH216-L (logistics) and the pilotless VT-30 for longer-range 2-passenger flights of up to 300 km.

Presently priced at $11.70, EH stock is widely perceived as a “buy” according to WSJ data with an average price target of $26.30 per share.

Lilium (LILM)

At the end of May’s EBACE2024 event in Geneva, German Lilium (NASDAQ:LILM), one of the top flying car stocks to watch, revealed its full-scale Lilium Jet eVTOL model. After extensive flight and engine testing, Lilium Jet is the prime candidate for scaled Regional Air Mobility (RAM) rollout. 

In July, the oil-rich Saudis were confident enough to forge a binding sales agreement for 50 Lilium Jets, with an option for 50 more. In fact, 2024 is looking to be the milestone year for Lilium as the company cements its international presence across the U.K., U.S., and China.

At the same time as EBACE2024 took place, UK’s Volare Aviation, managing chartered flights with helicopters and jets, ordered 4 Lilium Jets while reserving up to 12 more. Of particular note indicating Lilium’s seriousness is the company’s POWER-ON platform which makes it a compelling pick.

Just like Nvidia (NASDAQ:NVDA) tied its AI-training framework with its chips, Lilium’s February launch of POWER-ON makes it easy for companies to integrate eVTOL services. Dusting Dryden, eVolare founder, summed it up in highly favorable terms.

“…between their support and services organization – Lilium POWER-ON – their regulatory support with authorities, and their experience with ground infrastructure development, we fully trust Lilium to be the best eVTOL partner…”

Combined with the technical capabilities of Lilium Jet, and the company’s plan for up to 100-passenger eVTOLs, Lilium is likely to become a household name when thinking about air taxis of the future. At this incipient stage, this makes LILM of the top flying car stocks to watch.

Presently priced at $0.7767 per share, LILM stock is forecasted for an average price target of $1.94 according to WSJ.

Joby Aviation (JOBY)

What Lilium represents for Europe, Joby Aviation (NYSE:JOBY) represents for the US. In early 2020, Toyota (NYSE:TM) committed $394 million to Santa Cruz-based company, signaling a strong likelihood of its success given Toyota’s legacy track record.

Not only does Toyota provide Joby’s key actuator and powertrain components, but scaling operations as well courtesy of the Toyota Production System. This is critical to forge a large stake in the mobility air market early on. Joby’s first exhibition taxi flight happened in November 2023 in New York City. 

It is also notable that Delta Airlines (NYSE:DAL) picked Joby Aviation for home-to-airport air taxi services. Delta Airlines ranks first with nearly 25% market share as of Q2 2024. The company achieved a record operating revenue of $16.7 billion, with an adjusted figure of $15.4 billion. 

After the initial investment of $60 million in October 2022, Delta left a $200 million leeway as Joby Aviation crosses air taxi milestones.

So far, Joby applied to have its commercial passenger services in the US, the UK, Japan, and Australia. The latter is a part of the bilateral agreement between the US and Australia for FAA-type certification. By early 2026, the company will launch a commercial air taxi service in Dubai. 

Presently priced at $5.18, JOBY is forecasted to reach $7.40 as the average price target per WSJ. The high ceiling is $11 in the short term. 

On the date of publication, Shane Neagle 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.