While the market is focused on the race for Federal Aviation Administration (FAA) certification between Joby Aviation (NYSE: JOBY) and Archer Aviation, the real long-term battle could be between Joby and Boeing‘s (NYSE: BA) electric vertical take-off and landing (eVTOL) subsidiary, Wisk.
The difference between Wisk, Joby, and Archer is that the latter is focused on becoming an original equipment manufacturer (OEM) selling to third-party companies, while Wisk and Joby aim to be vertically integrated transportation companies, manufacturing, owning, and operating their own air taxis.
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Further complicating matters, Joby and Archer are initially developing a piloted eVTOL, while Wisk is focused solely on an autonomous eVTOL. Given the extra complexity and more complicated regulatory pathway, Wisk is likely a few years behind.
Joby is also collaborating with Nvidia to develop an autonomous eVTOL, but in a piecemeal fashion, with the autonomous functions assisting piloted flight. The battle royale here is between Wisk’s straight to autonomous flight model vs. Joby’s piloted eVTOL first and ongoing development to potentially autonomous eVTOL in the future.
Joby’s approach to achieving certification for its piloted eVTOL, while simultaneously developing autonomous aids for pilots, is a great way to hedge against the risk that Boeing’s Wisk will receive certification a few years later. It’s a significant threat because autonomous eVTOL air taxis are likely to be significantly cheaper than piloted options.
Joby’s recent equity raise ($1.2 billion) eased funding concerns, and investors shouldn’t automatically conclude Boeing has deep pockets to fund Wisk indefinitely. Boeing’s cash flow generation has been challenged by the 737 MAX production ramp, ongoing issues with fixed-price defense contracts, and the need to fund the development of a new generation of narrow-body aircraft.
Moreover, Joby offers investors a pure way to play the eVTOL transportation-as-a-service theme, and if it can pilot eVTOL and become certified first, it will have an opportunity to secure vertiports and key partnerships, such as it’s already doing with Uber Technologies and Delta Air Lines. Those benefits may prove crucial over the long term.
