Key Takeaways
- Joby Aviation’s primary commercial focus remains its battery-electric S4 aircraft, aimed at urban air taxi services, with FAA certification being the most critical near-term catalyst.
- The company’s involvement in hydrogen is strategic and long-term, managed through its subsidiary H2FLY, which recently demonstrated the potential of liquid hydrogen-electric propulsion for longer-range applications.
- The eVTOL sector is fundamentally pre-revenue and capital-intensive. Joby, like its peers, is not yet profitable and success hinges on navigating a complex path of certification, manufacturing scale, and infrastructure development.
- While passenger services remain the ultimate goal, contracts with the U.S. Department of Defense provide crucial early revenue, operational experience, and technological validation.
- The competitive landscape is fierce, with rivals like Archer Aviation also advancing towards certification, making manufacturing efficiency and speed to market decisive factors for success.
Recent excitement surrounding hydrogen-powered aviation has, perhaps inevitably, become entangled with the ambitions of the electric vertical take-off and landing (eVTOL) sector. While Joby Aviation is a central player in the latter, its approach to propulsion is more nuanced than speculative headlines might suggest. The company’s primary path to commercialisation is firmly rooted in battery-electric technology for its flagship S4 aircraft, but its acquisition of hydrogen pioneer H2FLY signals a calculated, long-range hedge on an alternative technological future.
Understanding Joby’s strategy requires separating the immediate, core business objective from its long-term research and development ventures. The journey towards launching a commercially viable air taxi service is paved with regulatory milestones and manufacturing challenges, a reality that grounds the more futuristic discussions of hydrogen flight.
Hype versus Hydrogen Reality
The conversation around Joby and hydrogen stems from its subsidiary, H2FLY. In 2023, H2FLY completed the world’s first piloted flight of a liquid hydrogen-powered electric aircraft.1 More recently, in July 2024, the company announced that its powertrain technology could support a theoretical flight distance of 523 miles, a significant figure that showcases hydrogen’s superior energy density compared to today’s lithium-ion batteries.2
This is a notable technological demonstration. Hydrogen offers the potential to unlock longer routes and heavier payloads, pushing eVTOL aircraft beyond short urban hops into the realm of regional transport. However, this remains a research track, distinct from Joby’s commercialisation roadmap. The S4 aircraft, which is currently undergoing FAA type certification, is powered by batteries. The hydrogen technology from H2FLY represents a powerful, but parallel, path for potential future aircraft platforms, likely aimed at different markets such as cargo or inter-city travel. The immense infrastructure challenges of producing, storing, and distributing green hydrogen mean that its widespread adoption in aviation is a prospect for the next decade, not the next year.
The Core Business: Certification and Production
Joby’s immediate future will be defined not by hydrogen, but by three more prosaic elements: certification, manufacturing, and early revenue contracts. The company is in the final stages of the FAA type certification process, a gruelling and expensive undertaking required to operate commercially in the United States.3 This remains the single most important catalyst for the company and the entire sector.
Simultaneously, Joby is scaling its manufacturing capabilities. It has established a facility in Marina, California, and is building a larger plant in Dayton, Ohio, capable of producing up to 500 aircraft per year.4 Proving it can build its S4 aircraft consistently and to aerospace-grade standards is as critical as the design itself.
Financially, the company operates in a pre-revenue state typical of deep-tech industries. An examination of its recent financial reports underscores the capital-intensive nature of its mission. Profitability is not an immediate prospect; the focus is on managing cash burn while hitting crucial development milestones.
| Financial Metric | Q1 2024 | Commentary |
|---|---|---|
| Total Revenue | $0 | Primarily pre-revenue, with minor income from government contracts. |
| Net Loss | ($94.6 million) | Driven by high R&D and administrative costs for certification and manufacturing scale-up. |
| Cash & Short-Term Investments | $924 million | Capital runway to fund operations through anticipated certification. |
Source: Joby Aviation Q1 2024 Shareholder Letter.5
While awaiting commercial launch, Joby has secured valuable contracts with the U.S. Department of Defense. These agreements provide early revenue and, more importantly, allow Joby to accumulate operational flight hours in a real-world setting, generating data that is invaluable for the final certification push.
A Crowded Competitive Sky
Joby does not operate in a vacuum. The race to commercialise eVTOLs is intense, with several well-funded competitors also progressing through certification. This competition keeps pressure on timelines and budgets, making first-mover advantage a significant factor.
| Company | Primary Propulsion | Target Market | Certification Status |
|---|---|---|---|
| Joby Aviation ($JOBY) | Battery-Electric | Urban Air Mobility / Regional | Stage 4 of 5 with FAA |
| Archer Aviation ($ACHR) | Battery-Electric | Urban Air Mobility | In ‘for credit’ testing with FAA |
| Vertical Aerospace ($EVTL) | Battery-Electric | Urban & Regional | Targeting certification with UK CAA |
Each company is pursuing slightly different designs and go-to-market strategies, but all face the same fundamental hurdles of regulation, public acceptance, and economic viability. Success will likely come to those who can navigate the certification process most efficiently while demonstrating a clear path to profitable, high-volume manufacturing.
A Hypothesis on a Dual Mandate
Joby’s two-pronged approach—battery-electric for now, hydrogen for the future—is a pragmatic strategy in an uncertain technological landscape. Investing in the company is a long-duration bet on its ability to execute on its core plan while retaining a valuable option on a future powertrain technology.
Herein lies a speculative hypothesis: the most significant near-term value from the H2FLY acquisition may not come from a Joby-branded hydrogen aircraft. Instead, Joby could license the advanced hydrogen-electric powertrain technology to established aerospace manufacturers for use in regional aircraft or, more lucratively, adapt it for long-endurance, unmanned defence surveillance platforms. This would create a high-margin revenue stream completely independent of the passenger eVTOL market, de-risking the company’s overall profile long before its air taxis are a common sight over city centres.
References
- Joby Aviation. (2023, September 7). H2FLY Completes World’s First Piloted Flight of a Liquid Hydrogen-Powered Electric Aircraft. Retrieved from https://www.jobyaviation.com/news/h2fly-liquid-hydrogen-flight/
- Electrive. (2024, July 16). Joby Aviation completes demonstration flight with hydrogen aircraft. Retrieved from https://www.electrive.com/2024/07/16/joby-aviation-completes-demonstration-flight-with-hydrogen-aircraft/
- Joby Aviation. (2024). Certification. Retrieved from https://www.jobyaviation.com/certification/
- Joby Aviation. (2023, September 18). Joby Selects Dayton, Ohio, as Site of First Full-Scale Aircraft Production Facility. Retrieved from https://www.jobyaviation.com/news/joby-selects-dayton-ohio-manufacturing-facility/
- Joby Aviation. (2024, May 7). Q1-2024 Shareholder Letter. Retrieved from https://ir.jobyaviation.com/financials/quarterly-results/default.aspx
- @StockSavvyShay. (2024, October 15). [$JOBY UNVEILS HYDROGEN-POWERED AUTONOMOUS AIRCRAFT AFTER RECORD 9-HOUR TEST FLIGHT]. Retrieved from https://x.com/StockSavvyShay/status/1939660499286945887
