Joby Aviation (JOBY 2.33%) is losing money and will likely continue to do so for years to come. But it doesn't mean that important progress on the business front isn't being made. And if the company can achieve this one big goal in 2025, the year will end up being a pivotal turning point for the upstart aircraft manufacturer.
Joby Aviation is a high-risk investment at this stage of its development, but here's why this year is so important.
What does Joby Aviation do?
Joby Aviation is building an airplane manufacturing operation. That in and of itself is a pretty audacious goal, given the capital-intensive nature of the business. It isn't attempting to take on the industry leaders, though. It is looking to jump into a burgeoning niche of the industry, vertical lift short-haul air taxis. The idea is right out of a science fiction novel.
Image source: Getty Images.
Essentially, the hope is that people will pay to fly above congestion in crowded cities. It already has an aircraft and is working toward getting approval from the Federal Aviation Administration (FAA) to use it domestically. The U.S. military has a couple of the aircraft that it is testing, too. It will likely take a few more years before U.S. approval is granted, but Joby Aviation is moving its business forward step by step.
Progress with the FAA is going to be vital for investors to watch for the consumer side of the business. What happens with the military could also be important, as that might be an attractive market, as well. But the really big event that might take place in 2025 isn't likely to happen domestically.
Dubai is where the action is for Joby in 2025
Right now, Joby is working with its partners in Dubai to build what it is calling a "vertiport." Presumably that stands for vertical airport. The end goal is to start testing the consumer air taxi concept in that country, with three more vertiports planned after the first one is completed. Joby also signed a partnership with Jetex, an executive transportation company, that could end up using Joby's air taxis to move customers around its collection of Jetex facilities in the Middle East.
NYSE: JOBY
Key Data Points
Joby is further along in its progress in Dubai than in the United States, which isn't surprising since U.S. regulations tend to be fairly strict -- which is why Dubai is the place to watch in 2025 if you own or are considering buying Joby Aviation stock.
The initial key step will be the first delivery of a Joby aircraft to Dubai, which is expected to occur by the middle of the year. That aircraft will then be tested in the market. And, according to the company, "We intend to carry our first passengers in the Emirate in late 2025 or early 2026." If Joby hits that goal it will have proven that its air taxi model isn't science fiction after all and that it is, in fact, a very real business.
Then Joby's real test begins
Achieving the first commercial flight will be a pivotal moment for Joby and for investors. It is the key to the company's future. But it is, in the end, just another stepping stone. Once commercial flights are running, investors will find out if there's actually enough demand for air taxis to make Joby a profitable company.
This isn't a stock for risk-averse investors, but if you have the fortitude to own it, keep close tabs on the company as the year progresses because 2025 could be an important turning point.
