Innovation has always been a big driver of investment. Recently, many investors have paid close attention to the trends favoring artificial intelligence (AI), since it promises to boost productivity and lead to transformative improvements in efficiency.
However, AI stocks aren't the only ones that can get a big boost from favorable news. In the electric vertical takeoff and landing (eVTOL) aircraft industry, huge investments are ongoing to come up with alternatives to ground-based transportation.
Air taxis have huge long-term potential, and Joby Aviation (JOBY 4.90%) saw its stock post huge gains Wednesday after it reached a key milestone. Indeed, Joby's success is lifting interest levels throughout the eVTOL sector.
Joby gets a key approval
Shares of Joby Aviation soared 36% at midday on Wednesday. The eVTOL pioneer made a vitally important announcement that has it positioned to be a potentially major player in the fast-growing industry.
Joby said that it has received a special airworthiness certificate from the U.S. Federal Aviation Administration (FAA) for an aircraft built at its Marina pilot production line in California. With the certificate from the FAA, Joby will now be able to begin the flight-testing process for its first production prototype aircraft.
Joby also expects that it will become the first eVTOL aircraft in history to be delivered to a customer. That should happen in 2024, when Joby will move to Edwards Air Force Base and operate the aircraft as part of a contract it has with the U.S. Air Force.
Also sharing in the good news was Toyota Motor (TM 0.60%), which is the largest external shareholder in Joby and has played a key role in providing investment capital to fund the development of eVTOL aircraft.
The two companies expect to continue to collaborate, with a recent supply contract ensuring that Joby will be able to get the powertrain and actuation components it will need when it enters full production. Joby just appointed the CEO of Toyota's North America division, Ted Ogawa, to its board of directors.
Currently, Joby's intentions are to start offering air taxis to commercial passengers in 2025. A partnership with Delta Air Lines (DAL 0.08%) could offer passengers a way to get from their homes to nearby airports to board jets. At this point, investors see the sky as no limit to Joby's potential success.
Image source: Joby Aviation.
Big gains across the space
Other stocks in the eVTOL sector also did well on Wednesday. Lilium (LILM 4.28%) climbed 18%, while Archer Aviation (ACHR 1.00%) posted a 15% rise. Industry peers Vertical Aerospace (EVTL 3.49%) and Blade Air Mobility (BLDE 5.02%) had more modest gains of 4% to 5%.
Joby hasn't been the only company in the industry to see recent success. Just earlier this week, Lilium announced that it had received G-1 certification from the FAA, which is necessary in order for the company to receive a type certificate validation for its Lilium Jet.
Lilium had already received primary airworthiness authorization from its home regulator, the European Union Aviation Safety Agency (EASA). With cooperation agreements between the FAA and the EASA, Lilium expects to start global operations sometime in the future, and it believes it's the only company looking for dual certification in the U.S. and the European Union.
Given levels of traffic congestion across the globe, short-range air transportation has huge advantages over ground-based counterparts. That bodes well for eVTOL companies in general, and it'll be interesting to see how Joby and its peers move forward with their respective efforts.