Could Joby Aviation Be a Once-in-a-Decade Investment Opportunity?

Joby Aviation (NYSE: JOBY) is in the business of making flying taxis. It's not the kind of taxi most people would have in mind -- a white or yellow cab -- but rather a small electric aircraft that takes off vertically like a helicopter and flies forward like a plane. This is called an electric vertical takeoff and landing (eVTOL) craft, and one day, you might take one to an airport to save time.

The core value proposition of air taxis is, indeed, saving time, which could resonate strongly in areas where congested urban traffic devours a large portion of it. With increased urbanization, the total addressable market for urban air mobility (which includes eVTOLs) could be enormous. Morgan Stanley, for example, projects the global urban mobility market to reach $1 trillion by 2040 and $9 trillion by 2050. That's the base case, too, not the bullish one.

As the frontrunner of the eVTOL market in the U.S., Joby seems like a once-in-a-decade opportunity -- if you follow Morgan Stanley's predictions. The potential could be enormous, but how likely is it that Joby will turn this air-taxi vision into a real, thriving business?

Image source: Joby Aviation.

The air-taxi dream is moving closer to commercialization

There's compelling evidence right now that Joby can make a business from its vision. Perhaps the most persuasive is the dominant lead it has taken in the race to commercialize its eVTOL aircraft in the U.S.

Joby is progressing quickly through the Federal Aviation Administration's (FAA) regulatory process, and it could very well obtain the much-coveted FAA type certification in the not-too-distant future. The company is already in the fifth and final stage of the process, with for-credit flight testing expected later this year.

Indeed, Joby has more real-world proof of its aircraft than any of its eVTOL peers. It has logged more than 50,000 miles across its eVTOL fleet; it has demonstrated that its eVTOLs can achieve a piloted transition; and it has even showcased its S4 eVTOLs in flight in and around Manhattan. It has five of these aircraft in service, with 12 more in production, and it plans to begin flights in Texas this September through the White House's eVTOL Integration Pilot Program (eIPP).

Joby also has several strategic partnerships. Perhaps the most notable is its relationship with Toyota (NYSE: TM). Over the years, Toyota has committed about $894 million total in Joby; more recently, it entered a strategic manufacturing alliance with the eVTOL company to help it scale aircraft production. That might seem small, but it's actually hugely significant: Once it has certification, Joby will need a fleet of aircraft, and Toyota's expertise can help it avoid problems with manufacturing mishaps that a less experienced company inevitably falls into.

Both its progress and its partnerships -- which also include Delta and Uber -- give Joby more credibility than the typical aviation start-up. But let's round out this picture: Joby is burning cash badly, and it won't earn significant revenue this year. Regardless of its FAA progress, the company can't afford setbacks or delays -- or else investors could suffer dilution to raise funds.

Data by YCharts

The future, however, is looking less murky, and Joby's place in it is also looking more permanent. The stock looks like a long-term buy today, as long as you can stomach the ups and downs that inevitably come with it.

Steven Porrello has positions in Joby Aviation. The Motley Fool recommends Delta Air Lines and Uber Technologies. The Motley Fool has a disclosure policy.