Price declines are healthy for the stock market, as they decline by 15% every two years on average. The recent market correction offers flying car stocks an opportunity to make a big future play.
Whether you call them air taxis, eVTOLs or flying cars, electrified air transport is a natural evolution of miniature quadcopter technology. In many variants, their main advantage is that they can take off and land vertically in urban areas without generating enormous noise like helicopters.
Excluding logistics deliveries, air taxi service alone is forecast to grow at an annual rate of 20.24%, from $3.68 billion in 2023 to $15.27 billion in 2031, according to Kings Research. However, companies will have to overcome many regulatory and technical challenges to achieve this.
Here are the three flying car stocks to keep an eye on, as they have the best chance of overcoming these hurdles with flying colors.
EHang Holdings Limited ADS (EH)
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Similar Serve Robotics (NASDAQ:SERV), China’s EHang (NASDAQ:EH) develops its own autonomous aerial vehicles (AAVs) for urban air mobility. However, Serve relies on Magna International (NYSE:MGA) to produce its ground-based walkway robots, EHang manufactures its own drones such as the EH216-S.
Therefore, EHang should not be considered a Robotics-as-a-Service (RaaS) company. More ambitiously, EHang is forging partnerships with cities to pave the way for the emerging low-altitude economy rather than complementing existing delivery services. This includes AAV solutions for commercial (passenger and cargo) airlines, logistics (delivery) and air tourism.
So far, the company has established strategic partnerships with Shenzhen, Guangzhou, Llíria in Spain, Lyon in France and Dubai in the United Arab Emirates. With EHang’s shorter range of up to 40 km and a payload of up to 260 kg, the company expects to mass produce cheaper AAVs in metropolitan areas.
In regulation-friendly China, the company delivered 10 units to Xishan Tourism in late July after completing passenger flights and obtaining the Air Operator Certificate. To expand its AAV portfolio, EHang also has the EH216-F (firefighting), EH216-L (logistics) variants and the unmanned VT-30 for long-distance flights with 2 passengers of up to 300 km.
Currently trading at $11.70, EH stock is generally viewed as a “buy,” with an average price target of $26.30 per share, according to WSJ data.
Lilium (LILM)
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At the end of May, the EBACE2024 event in Geneva hosted a Lilium (NASDAQ:LILM), one of the top flying car stocks to watch, has unveiled its full-scale Lilium Jet eVTOL model. After extensive flight and engine testing, Lilium Jet is the prime candidate for scaled Regional Air Mobility (RAM) deployment.
In July, the oil-rich Saudis were confident enough to sign a binding purchase agreement for 50 Lilium jets with an option for 50 more. Indeed, 2024 looks set to be the milestone year for Lilium as the company consolidates its international presence in the UK, US and China.
At the same time that EBACE2024 was taking place, Volare Aviation from the UK, a provider of helicopter and jet charter flights, ordered 4 Lilium Jets and reserved up to 12 more. Of particular note is the company’s POWER-ON platform, which proves Lilium’s seriousness and makes it a compelling choice.
Just like NVIDIA (NASDAQ:NVDA) has linked its AI training framework to its chips. Lilium’s POWER-ON, launched in February, makes it easy for companies to integrate eVTOL services. Dusting Dryden, founder of eVolare, summed it up very positively.
“…with their support and service organization – Lilium POWER-ON –, their regulatory support with authorities and their experience in ground infrastructure development, we have full confidence that Lilium is the best eVTOL partner…”
Combined with Lilium Jet’s technical capabilities and the company’s plans for eVTOLs that can hold up to 100 passengers, Lilium is set to become a household name when it comes to the air taxis of the future. At this early stage, this makes LILM one of the top flying car stocks to keep an eye on.
The current price per share for LILM is $0.7767, and the average price target is $1.94, according to WSJ.
Joby Aviation (JOBY)
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What Lilium represents for Europe, Joby Aviation (NYSE:JOBY) stands for the USA. Early 2020 Toyota (NYSE:TM) has committed $394 million to the Santa Cruz-based company, suggesting a high probability of success given Toyota’s track record to date.
Toyota not only supplies Joby with key actuator and drive components, but also scaling operations thanks to the Toyota Production System. This is critical to capture a large share of the mobility air market early on. Joby’s first exhibition taxi flight took place in New York City in November 2023.
It is also noteworthy that Delta Airlines (NYSE:DAL) has selected Joby Aviation for home-to-airport air taxi services. Delta Airlines ranks first with a market share of nearly 25% in the second quarter of 2024. The company posted record operating revenue of $16.7 billion, adjusted for $15.4 billion.
After the initial investment of $60 million in October 2022, Delta left $200 million in leeway while Joby Aviation achieves milestones in the air taxi space.
So far, Joby has applied to start its commercial passenger services in the US, UK, Japan and Australia, the latter being part of the bilateral agreement between the US and Australia for FAA certification. The company will launch a commercial air taxi service in Dubai in early 2026.
Currently, JOBY’s price is $5.18, and the average price target is $7.40 according to WSJ. The short-term upper limit is $11.
As of the publication date, Shane Neagle did not hold (directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the author and are subject to InvestorPlace.com’s disclosure policies.
At the time of publication, the responsible editor had neither directly nor
indirectly) positions in the securities mentioned in this article.
