Joby Aviation Extends Deal With Air Force, Analysts Maintain Hold Joby Aviation secures a $55 million contract extension from the US Air Force for up to nine eVTOL flying cars, bringing the total potential value to $131m.
This story originally appeared on MarketBeat
Joby Aviation (NYSE: JOBY), a leader in the electric vertical takeoff and landing (eVTOL) aircraft industry, recently received a $55 million contract extension from the US Air Force for up to nine of its semi-autonomous flying vehicles. This brings the total potential value of Joby Aviation's contract with the Air Force up to $131 million. This news is a significant milestone for Joby Aviation and the eVTOL industry.
Shares of Joby Aviation are up following the news, while analysts maintain a Hold rating on the stock. On a technical basis, Joby reached a price bottom in February, and this deal should confirm the next leg up.
The company recently completed the 2nd of 5 steps toward FAA certification for commercial operations.
Joby Aviation is an eVTOL aircraft manufacturer based in California. The company was founded in 2009 by JoeBen Bevirt and has since been working on developing and testing its electric aircraft technology. The company's aircraft are designed to be quiet and have zero emissions, making them ideal for urban transportation. The eVTOL aircraft are expected to travel up to 150 miles on a single charge and reach speeds of up to 200 miles per hour.
The Air Force's interest in Joby Aviation's eVTOL aircraft is part of the Agility Prime program, which aims to accelerate the commercialization of advanced air mobility technology. This program seeks to advance the development of eVTOL aircraft to meet future national security needs while also enabling the creation of a robust commercial market. The Air Force's investment in Joby Aviation's eVTOL aircraft is a significant step toward achieving these goals.
Under the terms of the contract, the first two of the potential nine Joby aircraft will be delivered to Edwards Air Force Base in California sometime in March of 2024. The Air Force plans to test the five-seat eVTOLs with AFWERX and the Air Force Test Center at Edwards Air Force Base. The Air Force also wants to train its pilots to operate Joby aircraft at an Air Force installation. This will provide valuable insights into the Advanced Air Mobility aircraft's maintenance information, operations, and use case validation.
"This next step of getting Air Force pilots trained and operating Joby aircraft at an Air Force installation is a significant milestone for the program, providing key insights to actual operations, maintenance information and use case validation for Advanced Air Mobility aircraft," said Lt. Col. Tom Meagher. Lt. Col. Meagher is the division chief for the organization researching vehicle uses, AFWERX Prime. Joby Aviation hosted four Air Force pilots at its manufacturing facility in Marina, California, just days ago. During this multiple-day training event, the pilots were the first to fly the new aircraft as sole pilot in command, taking the vehicle through the full flight envelope.
The deal with the Air Force is a significant win for Joby Aviation and the eVTOL industry. The company has been working on its eVTOL aircraft technology for over a decade and has spent considerable time and money developing and testing its aircraft. The Air Force's investment in Joby Aviation's eVTOL aircraft is a strong endorsement of the technology and its potential to revolutionize transportation.
However, there are also risks and challenges associated with the deal. Developing and manufacturing eVTOL aircraft is an expensive and complex process. Joby Aviation must continue investing significant resources to scale production to meet the Air Force's demand. Additionally, the eVTOL industry is still in its early stages, and regulatory and safety challenges need to be addressed before these aircraft can be widely used for commercial transportation.
Despite these challenges, several positive factors suggest a bright future for Joby Aviation and the eVTOL industry. For one, the Air Force's investment in Joby Aviation's eVTOL aircraft is likely to encourage other government agencies and private investors to invest in the technology. Additionally, the Agility Prime program, of which Joby Aviation is a part, is designed to accelerate the commercialization of advanced air mobility technology. This program seeks to bring together government agencies, industry and academia to create a robust ecosystem that will help advance eVTOL aircraft technology.
Another positive factor is the growing demand for electric and sustainable transportation solutions. As cities become more congested and concerns over climate change continue to mount, there is an increasing need for efficient and sustainable transportation solutions. eVTOL aircraft have the potential to provide a fast and environmentally friendly way to move people and goods around cities.
Joby Aviation's eVTOL aircraft also have the potential to revolutionize the aviation industry. The ability to take off and land vertically means that eVTOL aircraft can operate in areas where traditional aircraft cannot. This could open up new opportunities for transportation, such as flying people and goods to remote locations or even serving as air ambulances.
Looking ahead, there are several things to watch for in the future of Joby Aviation and the eVTOL industry. One is the company's ability to scale production to meet the Air Force's demand. As the industry grows, it will be necessary for eVTOL aircraft manufacturers to be able to produce aircraft at scale to meet demand and bring costs down.
Regulatory and safety challenges must also be addressed as the eVTOL industry grows. This will require collaboration between government agencies, industry and other stakeholders to develop standards and regulations to ensure the safe and efficient operation of eVTOL aircraft.
It will be important to watch how the market for eVTOL aircraft develops. While there is growing interest in the technology, it remains to be seen how quickly eVTOL aircraft will be adopted for commercial transportation. Factors such as cost, infrastructure and public acceptance will all play a role in determining the success of eVTOL aircraft.
Joby Aviation's $55 million contract extension with the US Air Force is a significant milestone for the company and the eVTOL industry. The Air Force's investment in Joby Aviation's eVTOL aircraft is a strong endorsement of the technology and its potential to revolutionize transportation. However, there are also risks and challenges associated with the deal, and it will be necessary for Joby Aviation and the eVTOL industry to continue to address these challenges to achieve success. As the industry continues to grow, watching how it develops and evolves will be necessary to determine possible profitability.
