Friday, December 8, 2023
Stocks To Buy

3 Flying Car Stocks to Buy for the Future of Transportation

Flying cars, a concept that seems to only exist in movies, may soon become reality. There are dozens of flying car companies, some of which are making impressive progress in the field. One day, we might ditch our usual commute and instead fly to work.

Although flying cars are far from being practical, investment in certain companies could be extremely profitable. The flying car industry was valued at around $220 million in 2022. Over the next two decades, experts forecast that the industry will surpass more than $1.5 trillion. This represents a compound annual growth rate (CAGR) of over 55%.

Flying cars have the potential of revolutionizing transportation permanently. They can become the new norm, and change transportation as we know it. Flying cars are more environmentally friendly, while they also reduce travel time and increase productivity.

Although it will likely take time before we use flying cars in our everyday life, here are the three best flying car stocks to look out for.

Embraer (ERJ)

Embraer (NYSE:ERJ) is a multinational Brazilian aerospace corporation. The company designs and manufactures aircraft and systems, ranging from commercial aviation to executive aviation and defense and security. In addition to working on flying cars, Embraer has many other already successful segments.

Year to date, the stock price of Embraer has gone up nearly 40%, and the company has stronger financials than most competitors. For instance, it was able to bring in $120 million in gross profit during the last quarter of 2022. Its ability to keep a significant amount of cash (over $2 billion) and control its losses places Embraer in a favorable position to win the race to the development of the flying car.

Embraer’s subsidiary, Eve (NYSE:EVEX), has the ambitious goal of creating a practical flying car. By 2026, the company plans to build a flying taxi factory in San Paulo. The vehicle will resemble a helicopter, and Eve already has 3,000 preorders. The company plans to finish its prototype of the vehicle by 2023.

Embraer has already proved itself as a successful company, being one of the most prominent aviation companies in Latin America. Building a successful prototype of its flying car would bring it one step closer to winning the flying car race, which could cause the ERJ stock price to increase multiple-fold.

EHang (EH)

EHang Holdings (NYSE:EH) is a Chinese flying car company with a favorable outlook. EHang was the first eVTOL company to go public and is an industry leader in China.

Year over year as of June 2023, the company posted revenue growth of over 23%. It is worth noting that EHang is not profitable, however, this is typical in the eVTOL space. During the second quarter of 2023, the company lost around $75 million.

The main selling point for EHang stock is the progress that it has made in the eVTOL space. It recently developed EH216, an air taxi with a maximum speed of 80 miles per hour. EHang sells each unit for $300,000 and is attempting to use the product for several purposes. In addition to serving as an air taxi, EH216 has been certified as a fire-fighting drone and for transporting medical supplies. The company has 19 testing sites in 17 Chinese cities and has conducted over 8,000 trial flights.

Joby Aviation (JOBY)

Joby Aviation (NYSE:JOBY) is an American flying car company that is an industry leader in the eVTOL space. Its stock has gone up over 100% year to date. It has the potential for even more growth, based on the company’s strong financials and developmental progress.

It is worth noting that the company is losing money continuously, and at the same time has no revenue.

However, this makes sense for a company that has yet to commercially develop its product. When it does, it can easily make up for the current losses. Joby is not at risk of bankruptcy anytime soon, as it continuously receives large investments and it has a staggering $1.2 billion cash on hand. Joby also partnered with Toyota (NYSE:TM), which will help provide it with key equipment for the development of its aircraft. On top of that, Toyota invested $400 million in the company, giving it a stake of over 10%. This partnership not only provides Joby with a significant amount of funds to use for development, but also Toyota’s equipment and expertise.

Joby also has other key investors, such as Baillie Gifford, which owns around 8% of the company.

Joby is expecting to provide the U.S. military with its eVTOL starting in 2024, while also making progress with its air taxi. After the Federal Aviation Administration provided Joby certification for test flights, the company expects to provide commercial flights starting in 2025.

On the date of publication, Tomas Levani did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the Publishing Guidelines

Tomas is a self-taught investor with a passion for ESG investing. He has managed the portfolio of a small investment fund, interned at a Fortune 500 investment company, and started his own research firm. Through his freelance writing, he now aims to find favorable investments in companies with a mission of bettering the world.

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