Flying electric vehicle stocks are here

We’ve successfully cloned sheep, CRISPR can be used to edit genes, but nothing feels quite as futuristic as flying taxis.

Over the past few months, several flying electric vehicle companies/electric vertical-takeoff-and-landing vehicle (eVTOL – aka electric helicopters) companies have been going public – mostly through SPACs.

Funding the takeoff – flying electric vehicles

Electric, flying taxis may seem a long way off, but experts at Deloitte estimate that it could be a $115b industry employing more than 280k people by 2035.

After raising a record $1.3b in private investments in 2020, several of these flying taxi companies took advantage of the SPAC frenzy to go public over the past few months:

• Joby via SPAC, Reinvent Technology Partners ($RTP) – backed by Uber
• Archer Aviation ($ACIC) via Atlas Crest Investment ($ACIC) – investors include United Airlines
• Lilium, a german eVTOL company, via Qell Acquisition Corp ($QELL)… Lots of flying taxi companies going public via SPACs – you get the point

Birds aren’t the only obstacle

Investors are being sold on the potential benefits of eVTOLS – i.e. cheaper to operate than traditional helicopters, lots of use cases in transportation/shipping… But we’re still years away from ordering one through our phones.

If flying taxis are going to take off, they’ll have to overcome these hurdles:

• Infrastructure – companies will need to develop landing protocols and charging stations
• Safety – years of testing will be required to meet safety thresholds
• Regulation – the success of eVTOL companies may depend on air traffic regulations

Those aren’t the only obstacles. Stock prices in the flying taxi space have proven to be volatile:

• EHang ($EH), a Chinese eVTOL company, has seen its stock fall 70% since Wolfpack Research, a shorter seller, accused EHang of fraud.
• Wisk Aero, another eVTOL startup, filed a lawsuit against Archer Aviation for allegedly stealing their secrets that sent its stock crashing 30%.

For investors… Let’s not fly too far ahead of ourselves

Investors have used SPACs to take early-stage companies public before they’re ready, and that could end up being the case here. eVTOL companies are still in the prototype phase, and they’re nowhere close to turning a profit yet – or even pulling in sales.

Until flying taxi companies launch a usable product, investors can only guess how profitable the industry can become – until then, it remains a highly risky investment.