Joby Aviation, which plans to create and operate a commercial fleet of aerial taxis by 2024, will begin trading on Wednesday, putting the public’s faith in the company to the test.
Since its creation in 2009, Joby has generated over $700 million in private finance and marketed its concept to construct a new type of passenger drone to companies including Uber Technologies Inc. and Toyota Motor Corp. A combination with a special purpose acquisition business announced this week will bring in more than twice that amount.
Joby is the most well-known among a slew of newcomers that includes Volocopter GmbH and Beta Technologies Inc. They’re competing against Airbus SE, Boeing Co., and Lockheed Martin Corp. by attempting to use battery technology improvements to develop a more environmentally friendly mode of urban transportation that isn’t reliant on earthbound traffic. They must mass-produce the devices, overcome regulatory hurdles, and make the economic model work in order to bring science fiction to life.
Since last year, the development of SPACs has allowed a new type of stock to list on the world’s most prestigious exchanges. The procedure permits businesses, some of which have no revenue, to avoid the scrutiny of an initial public offering and receive funds from investors who signed a blank check. Aerospace businesses have been particularly enthusiastic about the model.
Joby will receive $1.6 billion in new funding as part of a merger with Reinvent Technology Partners, a SPAC. JOBY will be the ticker symbol for the stock on the New York Stock Exchange.
Joby ramped up employment in anticipation of the sale, and today employs over 800 people. It showed two Bloomberg reporters a “final airplane design” in June and said it would start manufacturing the cars next year.
Joby announced last month that it has completed a flight of almost 150 miles on a single battery. The business has been working with the US Federal Aviation Administration for several years and expects to be certified in 2023. It will begin training pilots to operate the five-seat craft while it works toward that goal.
Flying cars are surrounded by a lot of hoopla. The market for electric vertical transportation is expected to be worth $1 trillion by 2040, according to Morgan Stanley. However, according to Robin Riedel, a McKinsey & Co. partner who leads the firm’s aerospace group, a regulatory green light is far from certain. According to him, getting FAA permission for a novel aircraft for the first time can take a year or more. “Until someone has really done it, every certification is a risk,” he said. “The devil is in the details,” as the saying goes.
Another component of the puzzle is locating suitable landing and take-off locations. Joby worked out a deal with SoftBank-backed Reef Technology Inc. and Neighborhood Property Group earlier this year to obtain access to the rooftops of some parking garages and other structures in North America and Europe. At those locations, Joby plans to build helipads and charging stations.
Joby intends to form partnerships in order to establish a taxi business. After selling its own flying vehicle unit to Joby late last year, Uber has announced that it will offer Joby’s air service to its customers as well as providing ground transportation to Joby departure and arrival sites.