Flying cars have long captured the imagination as a futuristic mode of transportation. But this sci-fi staple is now on the cusp of becoming a reality, making flying car stocks an interesting proposition for investors. After all, thanks to advancements in electric propulsion, autonomy and other key technologies, a new breed of air mobility companies aims to commercialize small passenger electric vertical takeoff and landing vehicles (eVTOLs), more colloquially known as “flying cars.”
While still early, the flying car industry has attracted billions in investment from corporations across automobiles, aerospace and tech. Morgan Stanley has estimated the total addressable market (TAM) for aerial mobility applications could reach globally $1 trillion by 2040 and $9 trillion by 2050. As costs come down and technology matures, flying cars hold the potential to fundamentally transform mobility and logistics.
For investors, this emerging ecosystem presents a highly speculative but intriguing opportunity through the pure-play flying car developers that are now trading publicly. Although commercialization timelines remain uncertain, those who gain an early foothold in leading flying car stocks stand to benefit from the upside if and when the promise of flying cars takes flight on a mass scale.
Joby Aviation (JOBY)
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Leading the pack in the flying car stocks is Joby Aviation (NASDAQ:JOBY), a trailblazer in the eVTOL space. With its sights set on launching an affordable air taxi service by 2025, this California-based upstart is basically aiming to revolutionize urban transportation, making it one of the more interesting flying car stocks.
With more than 1,000 test flights of its prototype completed, Joby has met critical development milestones on its path to certification. For instance, it has gained a Part 135 Air Carrier Certification from the Federal Aviation Administration (FAA) and delivered its first production aircraft to a $131 million contract with the U.S. Air Force.
As Joby’s aircraft nears final FAA certification over the next two years, its first-mover advantage in the niche flying car space is set to take off.
Importantly, Joby’s partnerships and balance sheet reinforce its production and commercialization capabilities. For example, Toyota (NYSE:TM) owns a $394 million stake in Joby and is providing manufacturing expertise to scale operations. Overall, the company has amassed a total funding war chest of $820 million from high-profile backers, further strengthening its position as one of the stronger flying car stocks.
Backed by significant financial resources and industry talent, Joby Aviation has its sights set on passenger flights in 2025. Therefore, for investors seeking early exposure in futuristic aviation, Joby represents one of the more intriguing flying car stocks on the runway path to commercialization.
Archer Aviation (ACHR)
Source: T. Schneider / Shutterstock.com
As an eVTOL innovator, Archer Aviation (NYSE:ACHR) is making strong headway toward commercialization.
On the regulatory front, Archer is on track for FAA certification by the end of 2024. This aligns with its timeline to launch commercial operations in 2025, likely making it among the first eVTOL companies with approved air taxi services.
Strategic partnerships also bolster Archer’s path to market. Key allies include United Airlines (NASDAQ:UAL), startup charging network BETA Technologies, and automaker Stellantis (NYSE:STLA). As Archer’s exclusive contract manufacturer, Stellantis will mass-produce Midnight aircraft at an Atlanta facility with an annual capacity for over 600 vehicles.
Government relationships further validate Archer’s progress. The company recently secured contracts with the U.S. Air Force worth up to $142 million. It also inked agreements to launch air taxi networks in India and the United Arab Emirates.
On the financial side, Archer maintains a healthy balance sheet with nearly $600 million in liquidity as of Q3 2023 to fund growth. This flying car stock has taken a disciplined approach to raise capital efficiently through debt and equity only when needed.
Given Archer’s measured pace of development, operational readiness efforts, and tactical partnerships, it remains an attractive pick to ride the growth in eVTOL aircraft.
Source: THINK A / Shutterstock.com
The sky’s the limit for Chinese electric vehicle (EV) pioneer XPeng (NYSE:XPEV), which is expanding into flying cars through its subsidiary XPeng Aeroht. With China pushing for global leadership in flying car standards, XPeng Aeroht is certainly primed for rapid growth and commercialization ahead of rivals.
The company plans to begin taking preorders for its modular, two-part flying car in late 2024, with deliveries slated for late 2025. This ambitious timeline is unmatched by competitors focused on the corporate market, like Supernal, which is targeting 2028 for production. XPeng Aeroht has already secured key milestones, such as a special flight permit from the Civil Aviation Administration of China (CAAC) to operate prototypes.
XPeng Aeroht’s flying car technology is progressing quickly, with a two-ton prototype already tested in 2022. The company is working closely with regulators on approvals needed for commercial operations.
Strategic partnerships will also aid XPeng Aeroht’s progress. In 2021, the company announced a deal with Guangzhou City to build flying car infrastructure and routes for public use. Partnerships with battery suppliers and avionics companies will be crucial as well.
Financial backing for XPeng Aeroht comes from both its parent company and outside investors. In 2021, the company raised over $500 million in Series A funding. With ample cash reserves from robust EV sales, Xpeng Motors can provide significant capital to develop and produce flying cars. As a pioneer in the world’s largest EV market, XPeng is leveraging its expertise to establish an early lead in flying cars.
On the date of publication, Andrea van Schalkwyk did not hold (either directly or indirectly) any positions in the securities mentioned. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
Andrea van Schalkwyk is a value investor who adheres to the principles of the renowned Warren Buffett and his mentor Benjamin Graham. He holds a Master of Engineering (MEng) from the University of Padua and an Executive MBA from the CUOA Business School.
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