Executive Summary / Key Takeaways

• Joby Aviation is advancing its vision of urban air mobility through a vertically integrated model, focusing on certifying its electric vertical takeoff and landing (eVTOL) aircraft and establishing operational capabilities and infrastructure.
• The company is making tangible progress across certification (record Stage 4 momentum, TIA testing expected within 12 months), manufacturing (scaling production, building conforming parts with Toyota's support), and commercialization (targeting early 2026 launch in Dubai, securing international partnerships, preparing U.S. operations).
• Joby's differentiated technology, including its unique aircraft design optimized for low noise and efficiency, coupled with strategic partnerships and a strong balance sheet ($812.5 million cash, cash equivalents, and short-term investments as of Q1 2025), underpins its competitive positioning.
• While significant R&D expenses and operating losses persist ($163.3 million loss from operations in Q1 2025), the company's 2025 cash use guidance ($500M-$540M) reflects focused investment towards commercial launch, supported by recent funding including a Toyota tranche.
• Key factors for investors to monitor are the pace of FAA certification, successful execution of manufacturing ramp-up, the timeline and scale of initial commercial operations in Dubai and other markets, and managing cash burn against future revenue generation.

Setting the Stage for a New Era of Mobility

Joby Aviation, Inc. (NYSE: JOBY) is not merely building an aircraft; it is constructing the foundation for a new transportation paradigm: urban air mobility (UAM). Founded in 2009, the company has dedicated over a decade to the research and development of its electric vertical takeoff and landing (eVTOL) aircraft, aiming to deliver air transportation as a service. This vision positions Joby within the nascent but potentially transformative eVTOL industry, seeking to offer a faster, quieter, and more sustainable alternative to traditional ground-based urban travel.

Joby's strategy is fundamentally rooted in vertical integration. Unlike some competitors who rely heavily on external suppliers for major components or partners for operations, Joby intends to design, manufacture, own, and operate its aircraft. This approach, management contends, provides end-to-end control over the customer experience, optimizes for safety, comfort, and value, and is expected to generate greater economic returns over time as production scales and unit economics improve. The company's journey has progressed from early prototyping and flight testing to the critical stages of regulatory certification, manufacturing scale-up, and laying the groundwork for commercial operations in key markets globally.

The competitive landscape is populated by a mix of startups and established aerospace players. Direct competitors like Archer Aviation (ACHR), Lilium NV (LILM), and Vertical Aerospace (EVTL) are also vying for position in the eVTOL space, each with varying technological approaches and go-to-market strategies. Indirect competition comes from enhanced ground transportation, traditional helicopters, and future autonomous systems. Joby distinguishes itself through its vertically integrated model, its advanced stage of development and testing, and strategic partnerships that span manufacturing, demand generation, and infrastructure development. While precise, directly comparable market share figures for all niche competitors are not publicly detailed, Joby's advanced certification progress and manufacturing capabilities suggest a leading position among its direct eVTOL peers.

The Technological Core: Engineered for Urban Skies

Central to Joby's investment thesis is its proprietary eVTOL aircraft design. The piloted, all-electric aircraft features six tilting propellers, enabling vertical takeoff and landing like a helicopter but transitioning to efficient forward flight like a plane. This design is optimized for urban routes, targeting a range of up to 100 miles on a single charge and speeds of up to 200 mph. The company highlights that over 99% of urban routes in major cities are significantly shorter than this, allowing for higher aircraft utilization through faster turnaround times.

The technological differentiation offers tangible benefits. The all-electric powertrain is designed to be clean and quiet, a critical factor for operating within dense urban areas. Management emphasizes the aircraft's low noise profile, describing it as quiet during takeoff and near silent when flying overhead, allowing it to blend into city background noise. This low noise is attributed, in part, to a low disk loading resulting in substantially lower outwash speeds, a characteristic validated by work with NASA. The aircraft is designed to transport a pilot and up to four passengers, or an expected payload of up to 1000 pounds.

Joby's commitment to technological leadership extends beyond its initial aircraft. The company is actively investing in future technologies, leveraging its vertically integrated platform. The acquisition of H2FLY, a pioneer in hydrogen-powered flight, has enabled Joby to explore extended-range capabilities. A record-breaking 561-mile hydrogen-electric flight demonstrated the potential to connect cities over greater distances, utilizing the same core aircraft platform with modifications to the powertrain. Similarly, the acquisition of Xwing's Autonomy Division is aimed at integrating autonomy technology, which management believes can expand government contract opportunities and enhance safety features in civil products through future block upgrades. These R&D initiatives, while contributing to current operating expenses, are strategically intended to broaden the aircraft's mission set, open new markets, and reinforce Joby's long-term competitive moat by building upon its existing certification and manufacturing expertise.

Building the Pathways to Market

Joby is pursuing a multi-pronged commercialization strategy, recognizing that different markets and customer segments may require distinct approaches. Management outlines three primary paths to generating revenue: direct sales, partnered operations, and direct operations.

The direct sales model focuses on selling aircraft to customers, including government agencies like the U.S. Air Force and potentially other businesses. This path offers the opportunity for near-term cash generation and recurring revenue from associated training and maintenance services. Joby has already delivered two aircraft to the DOD under the Agility Prime program and is actively pursuing additional government contracts, including opportunities in hybrid and autonomous technologies. Recent MoUs in Saudi Arabia with Mukamalah and Abdul Latif Jameel explore direct purchase and distribution agreements, respectively, signaling potential for this model in international markets.

Partnered operations primarily target markets outside the U.S. where Joby may work with local entities through joint ventures, sales, or leases to leverage local expertise and relationships. This approach allows for international expansion while potentially limiting Joby's direct capital commitments. Progress in markets like Japan (partnership with ANA (ALNPY) and Toyota), Korea (participation in the K-UAM Grand Challenge), the UK (partnership with Virgin Atlantic announced March 2025), and Australia (applied for certification Q2 2024) falls under this strategic pillar, often leveraging bilateral agreements between the FAA and local civil aviation authorities for certification validation.

The direct operations model involves Joby owning and operating the air taxi service itself, initially targeting high-density metropolitan areas in the U.S. This is a more capital-intensive approach but is expected to yield higher margins and a stronger market position over time. Joby is collaborating with strategic partners like Delta Air Lines (DAL) and Uber (UBER) on demand generation and infrastructure development, including efforts to electrify heliports in key U.S. markets like New York and Los Angeles. Operational readiness is being built through the use of the Part 135 operating certificate and the in-house developed ElevateOS operating system, designed for high-tempo on-demand air taxi services.

The most concrete near-term commercial target is the launch of passenger operations in Dubai, likely in early 2026. This follows an exclusive agreement with the RTA and involves partnership with Skyports for vertiport infrastructure development. Joby plans to send an aircraft to Dubai in mid-2025 for in-region flight testing, a critical step towards operational readiness in that market.

The Certification Ascent

Achieving regulatory certification is paramount for Joby's commercial aspirations. The company has been methodically working through the FAA's five-stage type certification process for its aircraft. A significant milestone was reached with the signing and subsequent publication of the Stage 4 G-1 certification basis in March 2024, which outlines the specific requirements for the aircraft's certification.

Joby has demonstrated consistent progress in Stage 4, reporting record momentum in Q1 2025, moving the Joby side to 62% complete (up 12 percentage points from Q4 2024). This involves submitting and gaining acceptance on numerous test plans covering various aircraft systems and structures. The company is also focused on building FAA-conforming parts and test articles, essential for the later stages of testing. As of Q3 2024, 35% of composite components being manufactured were for FAA conforming builds, and the company completed its first major conforming subassembly (the tail).

A critical upcoming milestone is the commencement of Type Inspection Authorization (TIA) flight testing with the FAA, which Joby expects to begin within 12 months of February 2025. This phase involves FAA pilots evaluating the aircraft's performance and handling qualities. Joby has been preparing for this through extensive internal flight testing with its growing fleet of aircraft (five in the test fleet as of Q1 2025, with four expected to be actively flying soon) and engaging FAA pilots in simulator testing.

The publication of the Special Federal Aviation Regulation (SFAR) in October 2024 was another key development, laying out the operational rules and pilot qualification requirements for eVTOL aircraft. Joby views the SFAR favorably, noting it provides a clear pathway for pilot training using simulators and confirms expected energy reserve requirements align with their design.

International validation of the FAA type certificate is being pursued in parallel through bilateral agreements with regulators in the UK, Japan, Australia, and the UAE, leveraging the rigorous work being done for FAA certification to expedite market entry in those regions.

Scaling Production and Managing the Burn

Transitioning from prototype development to scaled manufacturing is a significant undertaking. Joby has established a pilot production line in Marina, California, and is expanding this facility to double its manufacturing footprint. The company is also bringing an additional facility online in Ohio to produce aircraft components. Supported by its manufacturing partnership with Toyota (TM), Joby is refining its production processes, aiming to achieve a production capacity equivalent to one aircraft per month by the end of 2024 and ramp up further thereafter. The focus is increasingly on building conforming parts that meet FAA specifications, a necessary step towards obtaining a production certificate.

Financially, Joby remains in a pre-revenue phase focused on significant R&D and operational build-out. For the three months ended March 31, 2025, the company reported minimal revenue ($25,000) from flight services, consistent with the prior year period. Operating expenses totaled $163.3 million, an increase from $145.9 million in Q1 2024, primarily driven by increased personnel costs to support engineering, software development, manufacturing, and certification efforts, as well as higher material costs for prototype development. Research and development expenses rose to $134.3 million from $115.6 million, while selling, general, and administrative expenses decreased slightly to $29.0 million from $30.3 million.

The net loss for Q1 2025 was $82.4 million, an improvement from the $94.6 million net loss in Q1 2024. This improvement was largely driven by a significant gain from the change in the fair value of warrants and earnout shares ($71.0 million in Q1 2025 vs. $39.0 million in Q1 2024), partially offset by the higher operating loss and a decrease in interest income ($9.9 million vs. $12.3 million).

Cash flow used in operating activities for Q1 2025 was $111.0 million, compared to $106.6 million in Q1 2024, reflecting the ongoing investment in operations and R&D. Investing activities provided $31.6 million, primarily from the net effect of purchases and sales/maturities of marketable securities, while financing activities provided $2.0 million, mainly from an at-the-market offering and stock option exercises.

As of March 31, 2025, Joby held a substantial liquidity position with $812.5 million in cash, cash equivalents, and short-term investments. This was supplemented by the closing of the first $250 million tranche of Toyota's $500 million investment in May 2025, with the second tranche expected later in 2025. The company also has $164.9 million remaining available under its at-the-market offering as of March 31, 2025.

Joby's guidance for 2025 anticipates a use of cash, cash equivalents, and short-term investments between $500 million and $540 million. This spending is allocated towards continued progress on certification, ramping up manufacturing facilities and production, investing in infrastructure and vertiports, pilot training, and software development, all aimed at supporting the planned commercial launch. Management views this spending as disciplined and necessary to transition to commercial operations.

Competitive Dynamics and Strategic Positioning

Joby operates in a highly competitive and rapidly evolving market. Its vertically integrated model stands in contrast to some competitors like Archer, who may rely more heavily on partnerships for manufacturing and operations. Joby's technological focus on a quiet, efficient aircraft with a target range suitable for urban routes differentiates it from players like Lilium, which targets regional travel with a different design approach, or Vertical Aerospace, which also focuses on urban transport but with potentially different cost structures due to less vertical integration.

Joby's strategic partnerships, particularly with Toyota for manufacturing expertise and investment, and with Delta and Uber for demand generation and infrastructure, are key competitive assets. The Toyota partnership provides invaluable know-how for scaling production efficiently, potentially giving Joby a cost advantage once manufacturing matures. Collaborations with Delta and Uber aim to secure early demand and integrate air taxi services into existing travel networks, addressing a critical challenge for market adoption.

While Joby's certification progress is significant, the pace of regulatory approval remains a key variable and a potential vulnerability. Competitors like Archer have also reported progress, and the race to be first to market with a certified aircraft is intense. Delays in certification could impact Joby's timeline for commercial launch and potentially cede early market share to rivals.

The high capital requirements of developing, certifying, and manufacturing eVTOL aircraft act as a significant barrier to entry, favoring well-funded players like Joby. Its strong balance sheet, bolstered by recent funding rounds and the Toyota investment, provides a competitive advantage in funding its operations through the pre-revenue phase and investing in the necessary infrastructure and production capabilities. However, continued high cash burn necessitates successful execution of commercialization plans to generate revenue and move towards profitability.

Risks on the Horizon

Despite the progress, significant risks remain. The most prominent is the timeline for receiving FAA type certification. Any unforeseen delays could push back the commercial launch, impacting revenue generation and increasing cash burn. Scaling manufacturing from prototype to high-volume production is another complex challenge, requiring significant capital investment and operational expertise. While Joby is leveraging Toyota's experience, achieving cost-effective, high-quality production at scale is not guaranteed.

Market adoption of urban air mobility is still unproven. Consumer acceptance, pricing sensitivity, and the development of sufficient vertiport infrastructure are critical factors that could impact demand. Competition from other eVTOL developers and alternative transportation methods could also limit market share and pricing power. Regulatory risks extend beyond initial certification to ongoing operational rules, airspace management, and potential changes in policy that could affect the business model. Macroeconomic factors could impact consumer demand for premium air taxi services and the availability of future funding if needed. Tariffs and global trade policies, while not materially impacting the company to date, could increase costs for raw materials and components as manufacturing scales.

Conclusion

Joby Aviation is at a pivotal juncture, transitioning from a decade of intensive development to the cusp of commercial reality. The core investment thesis rests on its ability to successfully certify its differentiated eVTOL aircraft, scale its manufacturing capabilities with the support of partners like Toyota, and execute its multi-pronged commercialization strategy in key global markets, starting with Dubai in early 2026.

The company's vertically integrated approach and technological advantages, particularly its focus on quiet and efficient urban flight, provide a strong foundation and potential competitive moat. Significant progress in FAA certification, including momentum in Stage 4 and the expected commencement of TIA testing, underscores the tangible steps being taken towards regulatory approval. While substantial operating losses and cash burn are expected to continue as the company invests heavily in its build-out, the strong balance sheet, reinforced by recent funding, provides the necessary runway to pursue its ambitious goals. Investors should closely monitor the pace of certification, the successful ramp-up of manufacturing, the execution of initial commercial operations, and the company's ability to manage its cash resources effectively as it navigates the final stages before launch and seeks to validate the long-term economic potential of urban air mobility.