Before we dig into flying car stocks, I want to talk a bit about anticipating the future, especially in pop culture.
If you were raised on The Jetsons, or, like me, mostly caught it in syndication, you’re familiar with the concept of “retro-futurism,” or at least the bones of it. It’s basically a look back at the future that humanity was promised decades ago, like Disney’s Tomorrowland, the aforementioned Jetsons, the World’s Fair, etc.
A recent Apple TV+ show, Hello Tomorrow!, is a good encapsulation. So is, to a lesser extent, something like Back to the Future Part II, which was made in the late ‘80s but set in 2015. The relevance, for this article, is comparing the future we were promised with the future we actually have.
Sure, we all have supercomputers in our pockets that leave the Apollo program in the dust, but we don’t have pills that replace meals, robot maids, or, much to the chagrin of the online community, hoverboards.
But one place we’re getting surprisingly close is flying cars. They may not resemble the wheel-less, energy-driven flying cars of The Jetsons (they’re mostly industrial-sized drones with a passenger compartment), but there are a lot of companies putting billions of dollars to work to bring some version of the flying car to market.
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And these aren’t just “crackpot” inventors, or over-capitalized hobbyists; these companies have investments from major auto manufacturers, partnerships with airlines, regulatory approvals (of varying stripes) and enough potential (projected 58% CAGR through 2030) that it warrants asking whether we should buy the hype and start investing in flying car stocks.
A final point on retro-futurism: the reason I bring it up is that we often don’t get exactly what we’re promised, but fortunes have been made getting “close enough.” No pills for dinner, but we do have a miracle weight-loss injectable GLP-1; no Rosey the Robot, but we do have Roomba; no Her (yet), but ChatGPT is inescapable these days; and Alphabet (GOOGL), one of the most dominant tech companies on the planet, still wants to turn search into the Star Trek computer.
So, let’s take a look at a handful of companies trying to revolutionize transportation and see which, if any, of the flying car stocks might be worth investing in.
Each of these companies is working on electric vertical take-off and landing (eVTOL) vehicles that are only possible now because of advances in battery technology. These vehicles are essentially scaled-up versions of rotor-based drones that are intended to move one or a few people autonomously or under manual control.
3 Flying Car Stocks to Consider
Xpeng’s (XPEV) X2 is a good example, and it’s already received special permitting to allow it to operate on a limited basis in China and the UAE. Per the company, the X2 “will be suitable for future low-altitude city flights and is perfect for short-distance city journeys such as sightseeing and medical transportation.” The vehicle itself weighs just over 1,000 lbs., can fly for 35 minutes, and reaches a top speed of about 80 mph.
The vehicle is expected to cost about $138,000 with deliveries beginning in 2026.
As for the stock, it’s down 18% so far in 2024 and has faced middling ratings from analysts as a weaker Chinese economy and the potential for tariffs could weigh on the company (most notably the EV arm).
Closer to home, both Archer Aviation (ACHR) and Joby Aviation (JOBY) are among a handful of flying car companies working on similar vehicles.
Archer’s Midnight eVOTL is aiming for deployment as an air taxi service in 2025, with the express goal of turning a 60- or 90-minute cab ride into a 10- or 20-minute air taxi ride.
Rapid commercialization is at the forefront for Archer, as they’re envisioning a service more than a product. Midnight boasts a range of up to 100 miles, with rapid charging between flights or as needed, and with top speeds of up to 150 mph. United Airlines is their largest corporate partner, and Midnight is likely to be an extension of air travel, ferrying passengers to and from airports, and potentially cutting down on time spent in TSA lines and the like.
Last year, the companies announced plans to shuttle passengers between Chicago’s O’Hare and Vertiport Chicago (the Archer “hub,” as it were), which is likely a solid test case for the business proposition as a whole.
The company also recently signed a memorandum of understanding with Southwest (LUV) to develop an air taxi network in California airports where Southwest operates and has established an agreement to sell up to 100 Midnight vehicles to Soracle Crop., a joint venture between Japan Airlines and Sumitomo.
As for the stock, it’s up 30% so far in 2024 and 144% in the last month.
Joby Aviation is also working on an air taxi service (for JFK airport) and is undergoing FAA testing for certification. The firm also received a $131 million contract from the Department of Defense. The Agility Prime DoD contract is targeting delivery of up to nine aircraft to the U.S. Air Force and other federal agencies, with the first vehicle delivered in September of last year.
Toyota is a key business partner, having invested roughly $400 million in the company, and Joby is looking beyond airport transfers. Management hopes to eventually save one billion people one hour per day, becoming something of the Uber of the skies.
As for the stock, it’s up 31% so far in 2024, but still well off its all-time highs reached in 2021.
Each of these companies is still in the early innings, but the idea of flying cars and the investing case for flying car stocks are gaining traction more broadly (Needham just initiated coverage on both Joby and Archer).
Investing in any of the three of these flying car stocks is a highly speculative prospect due to the company-specific risks. An accident or failure to secure FAA certification could easily be a death blow for a company, or even the industry as a whole. So, in the interest of diversifying away from any one company in particular, we’ve identified two ETFs with the most exposure to flying car stocks.
ARK Autonomous Technology & Robotics (ARKQ) and ARK Space Exploration & Innovation (ARKX) ETFs each have exposure to Archer and Joby (as well as firms like Blade, but none to Xpeng), but only a small portion of either fund would meet the flying car criteria (less than 10% of the fund total). Both funds are far more allocated towards military drone makers Kratos (KTOS) and AeroVironment (AVAV), not necessarily a bad proposition, but certainly a different angle on flying technology.
Personally, I can’t imagine flying cars being ubiquitous, and Xpeng’s offerings seem more likely to become toys of the wealthy than common sights in the skies. Archer’s and Joby’s plans, on the other hand, seem feasible at least, assuming travelers are willing to get on board.
Given the limited exposure you’d get from a (more responsible) investment in either of the two funds above, a small stake in a firm like Joby seems like a reasonable way to invest in flying cars, especially given their big-picture goals.
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