What happened

Shares of electric air taxi start-up Joby Aviation (JOBY -2.17%) surged a whopping 57.9% this week through Thursday trading, according to data from S&P Global Market Intelligence.

On Wednesday, Joby achieved an important milestone, receiving a Special Airworthiness Certificate from the Federal Aviation Administration (FAA). That FAA approval means Joby can begin flying its actual production-line air taxi in a real setting.

On the heels of that approval, the company also received a fresh $100 million investment from a major South Korean telecom, lending even further confidence to the early-stage company.

So what

Although the company has flown its pre-production prototype already in a controlled setting, this new approval to fly production-line aircraft is a big milestone and will pave the way for Joby's first sale to a customer. That customer is the U.S. military; Edwards Air Force Base will be taking the aircraft in 2024 to be used in logistics applications. Joby's contract with the U.S. Air Force is worth $131 million, according to the press release.

The Special Airworthiness Certificate was celebrated by the company this week at its facility in Marina, California, with a presentation showing off the company's technology. In attendance were California Governor Gavin Newsom and Tetsuo Ogawa, CEO of Toyota Motor North America, who will also be joining the company's board of directors as of July 1. Of note, Toyota is Joby's biggest investor, having invested $400 million in the company.

And it's not just Toyota that is looking to get in on the air taxi business. The day after the FAA's special approval, South Korean tech giant SK Telecom got in on the game, investing $100 million in Joby on Thursday. The investment is a promising sign for Joby, as it could open up the Korean market. SK Telecom CEO Ryu Young-sang said in the release:

We will do our utmost to promote the demonstration and commercialization of urban air mobility in Korea, based on our partnership with Joby Aviation... This technology promises to greatly reduce customers' travel time and we look forward to turning Korea into a mobility powerhouse.

A Joby aircraft flies at sunset.

Image source: Joby Aviation.

Now what

These were two extremely positive developments for Joby, but before investors get too excited, realize that Joby is still very, very early in its development. And although meaningful revenues or profits won't come for at least a few years, Joby's market cap is still a not-small $6.7 billion.

Especially in the age of high interest rates, investors should be skeptical of paying too much for an early-stage tech company -- even if that technology looks very cool and potentially transformative.

Still, emission-free air taxis could be a very large market, especially as cities look to de-congest traffic and minimize emissions. Joby targets the much larger consumer market in the future, with the first planned consumer flights scheduled for 2025. Eventually, the company hopes to develop an air ride-sharing app for major cities. For instance, the company has a partnership with Delta to execute flights to and from big city airports.

With heavyweights like Toyota and SK Telecom behind it, Joby belongs on any tech investor's watchlist -- though, perhaps, not in the portfolio, especially after such a big jump.