Here’s Why Joby Aviation’s New $1 Billion Dubai Deal Could Cement Them as the “Uber of the Sky”

By Stocks News   |   1 week ago   |   Stock Market News
Here’s Why Joby Aviation’s New $1 Billion Dubai Deal Could Cement Them as the “Uber of the Sky”

Back in 2020, there was an analyst at the company I worked at who was completely fixated on one idea: air taxis.

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He genuinely believed that in just a few short years, we’d all be skipping traffic by booking on-demand flying vehicles like they were Ubers. Not only that, he was convinced this was the next big investment opportunity. He would pitch early-stage companies building electric vertical takeoff and landing (eVTOL) aircraft… companies with no revenue, no FAA approval, and no real plan for commercialization (unless you count slick animations and buzzwords). It felt less like a stock pitch and more like the kind of dream you have after falling asleep to a Star Wars marathon.

At the time, most of us thought it was a stretch. It’s not that we didn’t think air taxis could ever happen (maybe in the distant future, after Mars colonization and world peace), but trying to turn it into a near-term investment thesis (in the middle of a pandemic) just didn’t add up. The technology wasn’t ready. The regulations were a black box. And the timeline was optimistic at best (borderline delusional, if we’re being honest).

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But fast forward five years… and suddenly that idea doesn’t sound quite so far-fetched. Joby Aviation (one of the names that analyst couldn’t stop talking about) just hit a major milestone. The California-based eVTOL startup delivered its first air taxi to the United Arab Emirates and began piloted test flights in Dubai. Finally, a real aircraft, flying real missions, in the kind of heat that melts iPhones.

Even more impressive, Joby signed a deal with Dubai’s Roads and Transport Authority that gives it exclusive rights to operate air taxis in the city for six years. It’s already building out vertiports at Dubai International Airport, Palm Jumeirah, downtown, and the marina… part of a broader effort to make flying taxis a daily option. (Yes, a real transportation network, more than a billionaire weekend project.)

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On top of that, Joby’s aircraft completed what’s called a “transition flight”... meaning it took off vertically like a helicopter, shifted into forward flight like a plane, and then landed vertically again. It also managed to keep the cabin comfortable during 100+ degree heat, which is a strong signal the tech can hold up in the real world (not only in climate-controlled hangars).

So… what does all this mean? For one, the tech is much further along than most skeptics gave it credit for. Joby’s aircraft can carry four passengers and a pilot, hit speeds up to 200 mph, and run completely on electric power. No emissions, and a lot less noise than your average helicopter. A 45-minute car ride across the city? Joby says it’ll take just 12 minutes by air. (Bonus: no honking.)

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Financially, Joby’s come a long way from speculative startup territory. It’s raised over $2 billion in funding, with Toyota not only investing, but also acting as its manufacturing partner. Earlier this year, it secured a $1 billion deal with a Saudi firm for up to 300 aircraft, and it holds a $131 million contract with the U.S. Air Force. The company also has about $1.3 billion in liquidity… not bad for a company that used to get lumped in with “flying car” memes.

The stock is up more than 100% over the past year, with a current market cap around $9 billion. As you’d imagine, analyst opinions are still mixed (some remain cautious about the cash burn rate and long path to U.S. regulatory approval) but others are starting to come around. H.C. Wainwright, for example, reiterated a Buy rating and raised its price target from $10 to $11.50, after the Dubai tests.

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Of course, Joby still has a long way to go. It needs FAA certification in the U.S., more infrastructure, and proof that this model actually works at scale… not just in cities with oil money and a love for expensive experiments. (Let’s see how this plays out in L.A. traffic.)

Still, this isn’t a science experiment anymore. A major city is rolling out the red carpet. The aircraft exists. It flies. And people are getting onboard… literally and financially. So yeah… maybe that analyst from 2020 wasn’t totally off. Maybe he was just early. Very early.

At the time of publishing this article, Stocks.News holds positions in Uber as mentioned in the article. 

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