Thematic investing has returned in a big way in 2025, with electric vertical takeoff and landing (eVTOL) stocks a hot idea at the moment. Joby Aviation (JOBY -5.88%) -- a leader in the space with major manufacturing partnerships -- has seen its stock rise over 100% this year. It recently surpassed an all-time high of $17.50 a share.
Investors are betting that electric air taxi networks can disrupt transportation in major cities. But does that make Joby Aviation a millionaire maker if you buy at all-time highs today? If you run the numbers, the answer is abundantly clear.
Air taxis in every global city
Electric air taxis are piloted vehicles with rotors similar to helicopters, but much quieter. Using electric batteries, these innovations make the technology much more workable in highly populated neighborhoods, which is why developers like Joby Aviation are investing heavily in the systems. Joby's aircraft that is currently going through Federal Aviation Administration (FAA) certifications will have four passengers and can fly upward of 200 miles per hour.
The company is working with partners like Delta Air Lines and Uber Technologies to build point-to-point networks for these air taxis in major cities. The pitch for customers is turning an hour-long drive in traffic into a 10 minute scenic ride above the city to places such as the airport. No traffic routes are operational yet, but there are plans to build these point-to-point networks in cities such as Los Angeles, New York, and Dubai.
Saving customers time should lead to healthy ticket prices for these air taxi rides. It is unclear the ceiling on what a customer would pay, but it is likely that each trip will cost hundreds of dollars per person, especially if the company caters to wealthier consumers.
This potential disruption of transportation systems is what has investors excited about Joby stock. It now has a market cap approaching $15 billion even though the company generates zero dollars in revenue today.
Image source: Getty Images.
A long production timeline
Joby management hopes to soon get its vehicles approved by the FAA, and then it will begin ramping up production and helping build taxi networks in its partner cities. It has a major investment from Toyota Motor, which is providing around $1 billion in funding along with its manufacturing expertise to help scale production.
Even if Joby gets its vehicle approved soon, its manufacturing capacity is still small. Even after its latest update on expanding its California facility, the company states that it will only have the ability to produce 24 electric air taxis a year. At this rate, it may only have a few hundred taxis in operation 10 years from now.
To get there, Joby Aviation has spent a ton of money -- over $135 million on research and development just last quarter. Free cash flow was close to negative $500 million over the last 12 months. Building transportation vehicles is difficult, expensive, and time-consuming, especially with new technologies such as electric air taxis.
Joby's cash burn is likely to continue for years, which will require even more fundraising from its capital partners. The company currently has around $1 billion in cash if you include its fundraising commitments from Toyota.
JOBY Free Cash Flow data by YCharts
Is Joby Aviation a millionaire maker?
If multiple electric air taxi routes are operational in every major city worldwide, there will be demand for thousands of electric air taxis to be produced every year. With around 100 metropolitan areas with over 5 million people in the world -- most of which have terrible traffic problems -- you could see cities utilize dozens of electric air taxis to help alleviate traffic. Wealthy customers would likely pay up for the service.
This presents a large addressable market for Joby Aviation. However, it is tough to see how this correlates to a rising stock price compared to its current valuation of $15 billion. Building air taxis is going to be a low-margin business, meaning even if revenue grows to over $1 billion or several billions of dollars a few years from now, Joby Aviation will still trade at a high price-to-earnings ratio (P/E). This is also a scenario where the pre-revenue company succeeds on its risky business strategy. A lot can go wrong when you are burning $500 million a year and generate no sales.
Joby Aviation is likely not a millionaire-maker stock, even if it succeeds in building the electric air taxi industry from scratch.
