Joby Aviation Stock Climbs on Tokyo eVTOL Project Selection
The U.S.-based air taxi developer was chosen for a key urban air mobility initiative, signaling progress in the crucial Japanese market.
Shares of Joby Aviation Inc. (NYSE: JOBY) gained over 4% in morning trading after the company was selected to participate in a key project to bring "flying car" services to one of the world's most populous cities.
The Tokyo Metropolitan Government announced it had chosen a consortium featuring Joby's electric vertical takeoff and landing (eVTOL) aircraft for its "eVTOL Implementation Project (Phase I)." The selection represents a significant vote of confidence from a major international government and a crucial step toward commercializing air taxi services in the lucrative Japanese market.
Joby's stock price climbed to $14.90, a gain of 4.05%, boosting its market capitalization to approximately $13.6 billion. The move highlights investor optimism about the company's progress in navigating the complex technical and regulatory path to launching its futuristic transportation service.
The project, which will also feature aircraft from Japanese manufacturer SkyDrive Inc., is being led by a powerful group of local partners, including Nomura Real Estate Development, airline giant ANA Holdings, and East Japan Railway Company. According to the official announcement, the first phase is scheduled to run from 2025 to 2027.
During this period, the group will conduct feasibility studies for potential routes and vertiport locations, develop takeoff and landing sites, and work to build public acceptance through events and mock-up exhibitions. The initiative is a core part of Tokyo's broader ambition to launch commercial urban air taxi services by 2030.
A Crowded Sky
The selection provides Joby with a key foothold in Asia, but it also underscores the intensifying competition in the nascent eVTOL sector. Tokyo's government is hedging its bets, having also selected a rival team for a parallel project. That effort is led by Japan Airlines Co. and Sumitomo Corp., and will feature aircraft from Joby's primary U.S. competitor, Archer Aviation Inc.
Both Joby and Archer are among a handful of leaders in a capital-intensive race to get their battery-powered, multi-rotor aircraft certified and into commercial service. Joby, which is backed by Toyota and has a close working relationship with the U.S. Air Force, is widely seen as being in the final stages of its FAA certification process in the United States, a critical and costly milestone for the industry.
Wall Street's Divided Outlook
The news from Tokyo appears to bolster the bull case for Joby, but analysts remain divided on the stock's long-term trajectory given the significant execution risks ahead. The company faces immense hurdles in scaling manufacturing, finalizing regulatory approvals, and proving the economic viability of its air taxi model.
Wall Street's sentiment is mixed. Earlier this month, analysts at Needham maintained a "Buy" rating and a street-high $22 price target, citing the company's progress toward commercial readiness. However, a recent note from JP Morgan reiterated a "Sell" rating with an $8 price target, highlighting potential challenges. The consensus rating among analysts is a "Hold," with an average price target of around $12.50, suggesting that many are waiting for more concrete operational and financial results before turning more positive.
For Joby and its investors, the Tokyo project is a tangible sign of progress beyond U.S. borders. The coming two years will be critical as the company works with its Japanese partners to lay the groundwork for what it hopes will become a new pillar of urban transportation, while simultaneously navigating the final, and most challenging, stages of its U.S. certification.