Joby Aviation and Archer Aviation: Pioneering the Future of Urban Air Mobility
eVTOL Innovators Aim for Market Leadership Amid High Investments and Growing Opportunities in a $1 Trillion Industry
Joby Aviation (JOBY) and Archer Aviation (ACHR) continue to capture investors' attention as they pioneer advanced solutions in urban air mobility (UAM). A recent "buy" rating from Needham sparked a rise in their shares: Joby rose 11.87% to $9.04 per share, while Archer gained 18.44% to $9.56. This growth reflects market confidence in the potential of the eVTOL (electric vertical takeoff and landing) sector, projected to exceed $1 trillion by 2040.
Financial Results of Joby Aviation
Joby Aviation focuses on developing electric air taxis that have the potential to transform short-distance urban transportation. The company’s third-quarter 2024 achievements and financial indicators highlight its current standing.
Key Financial Indicators
Net Loss: $144 million in the third quarter, driven by significant expenses for research, certification, and prototype development. This reflects the company’s heavy investment in technological innovation and testing.
Operating Expenses:
Research and Development: $126.1 million, underscoring the company’s commitment to staying at the forefront of technology.
Sales and Administrative Expenses: $30.6 million.
Cash and Investments: $710 million at the end of the quarter. Total liquidity increased to $1.4 billion following the addition of $222 million from share placements and a $500 million investment from Toyota. This strong liquidity position allows Joby to continue developing its technology and preparing for commercial launch.
Operational Achievements
Completion of the first FAA-compliant subcomponent (aircraft tail section).
Near-completion of the fourth prototype, which will join the flight testing program.
First international demonstration flights took place in Japan at the Toyota Higashi-Fuji Technical Center. The company also plans to participate in the K-UAM Grand Challenge program in South Korea.
Risks and Challenges
Cash burn remains a significant challenge for the company. Joby is expected to require an additional $2 billion over the next year to maintain its growth momentum and achieve commercial readiness.
Financial Results of Archer Aviation
Archer Aviation is focused on production development and building a strong order portfolio, emphasizing rapid commercialization of its eVTOL aircraft. The third quarter of 2024 highlights significant progress in key areas.
Key Financial Indicators
Net Loss: $115.3 million, slightly higher than the second quarter’s $106.9 million loss. This increase reflects rising expenses for research, development, and certification, which are critical for a successful market entry.
Operating Expenses (GAAP): $122.1 million.
Liquidity Position: Cash and cash equivalents totaled $501.7 million, the highest level in the last 18 months. Archer plans to secure an additional $400 million from Stellantis to scale production and support further development.
Q4 2024 Guidance: Non-GAAP operating expenses are projected at $95–110 million.
Operational Achievements
Production Capacity: The factory in Georgia is preparing to start production in early 2025, aiming to produce two aircraft per month by the end of the year.
Certification: Archer completed the third phase of FAA certification and is actively progressing to the fourth, final phase. This is a key step toward commercial operations.
Commercial Initiatives: Archer signed a $500 million agreement with Japan's Soracle, increasing the company’s order book to $6 billion. Additionally, a consortium was established in the UAE to launch air taxi services by late 2025.
Risks and Financing
Like Joby, Archer faces high development and testing costs, requiring substantial investments. The company is actively collaborating with partners such as Stellantis to secure additional funding and scale production.
Comparison of Financial Indicators
Joby Aviation
Net Loss (Q3 2024): $144 million
Operating Expenses (GAAP): $156.7 million
Cash Position: $710 million
Market Cap: $4.3 billion
Stock Price (December 1, 2024): $9.04
Archer Aviation
Net Loss (Q3 2024): $115.3 million
Operating Expenses (GAAP): $122.1 million
Cash Position: $501.7 million
Market Cap: $1.88 billion
Stock Price (December 1, 2024): $9.56
Conclusion
Joby Aviation and Archer Aviation are at the forefront of innovation in the urban air mobility sector. Joby focuses on technological advancements and international demonstrations, while Archer emphasizes scaling production and strengthening its order portfolio. Despite significant financial losses and high expenditures, both companies are well-positioned to capture market share in the emerging UAM sector.
Investors should be prepared for long-term commitments, as eVTOL commercialization requires significant investments in research, development, and certification. However, the enormous growth potential of the UAM market, projected to surpass $1 trillion by 2040, makes Joby and Archer compelling opportunities for those looking to be part of the future of urban mobility.