Joby Aviation (NYSE: JOBY) stock is up 73% over the last year and 326% over the last three years, and the electric vertical take-off and landing (eVTOL) company is seemingly on an inexorable pathway to Federal Aviation Administration (FAA)-type certification and commercial launch in 2026. As such, investors might be tempted to think that the stock is poised for a “buy the rumor, sell the news” moment after its eVTOL receives certification and launches commercially.
However, I think that would be a short-term approach. Here’s why.
To understand why, you need to examine the company’s unique business model. Unlike its peers, such as Archer Aviation, Joby isn’t a company focused on being an eVTOL original equipment manufacturer (OEM). Instead, management plans to build what it calls a “vertically integrated transportation company that will deliver transportation services to customers, including government agencies such as the U.S. Air Force,” according to its SEC filings.
Consequently, its key milestones in the coming years are not just about achieving certification in 2026 and commercially launching; it also needs to establish itself as a transportation company. Consequently, there are many opportunities and pathways to growth for a company sometimes referred to as the “Uber of the Skies.”
The moniker is applicable, but it’s far from the complete story. Uber Technologies has invested $125 million in Joby and sold its air taxi division, Uber Elevate, to Joby in 2020. In addition, Joby will add the Blade air mobility business it acquired in the summer to Uber’s app.
However, Joby differs from its partner in that the company also manufactures the transportation equipment (eVTOLs) used in the service; that’s what management means by a vertically integrated transportation company.
The “vertical” approach doesn’t just apply to its transportation services strategy; Joby is also following a vertical manufacturing approach, whereby it’s building its eVTOLs in-house, with help from its partner and investor, Toyota, rather than sourcing from numerous external suppliers.
In theory, this approach will lead to a slower certification process as Joby isn’t leaning into aerospace companies with established expertise in the way that Archer Aviation, for example, is doing. However, the reality is that Joby is ahead in the certification race — an impressive achievement.
