It’s been a miserable time for eVTOL investors in recent years, beginning in February 2021, when EHang’s share price, the then darling of the industry, “crashed and burned” after a damning report published by Wolfpack Research.
Other stocks like Joby, Archer, Vertical Aerospace and Lilium followed as their opening Stock Market SPAC price of USD10, then gradually sunk lower and lower. In recent times, Lilium and Vertical Aerospace have even found its share price dropping close to or below USD1, an important pivotal point in the history of any share price. For if it remains below USD1 for a period of time, a company can be booted off the equity market.
This week the financial website, seekingalpha.com, shone a ray of light on the industry after pointing out these eVTOL companies, overall, have enjoyed a much-needed share price rise where, for example, Archer and Joby have surged to over 60 percent gains in recent months. In fact, Joby’s value has risen 93.5 percent in less than two months.
Archer’s Midnight Assists a Share Price Revival (credit Archer)
The seekingalpha website points to various potential reasons for these price upticks.
Full certification for the top eVTOL companies leading to commercial operations in a few years time remains on track. To assist in clambering over this pivotal hurdle, the present FAA Acting Administrator, Billy Nolen, is soon joining Archer as the company’s Chief Safety Officer and Michael Peter Huerta, who served as Administrator of the FAA between 2013 to 2018 as well as Acting U.S Secretary of Transportation under President Donald Trump for 11 days in 2017, is hooking-up with Joby Aviation.
In fact, the FAA said in an update this week, it is “planning for integration of these aircraft into the airspace and collaborating internationally”. This latest news adds to an operational blueprint released by the agency in May.
The cynic might suggest some share values have fallen to such lows that an uptick was on the cards. A dead cat bounce, perhaps? Even so, let us revel in the present optimism.
Examples (as of June 12th)
Archer: Recent low of USD1.65 (Dec 27th) — Today USD3.54.
Joby: USD3.76 (April 25th) — Today USD7.11.
EHang: Up 11.55 percent over past 6 months — Today USD11.28.
Eve Air Mobility: USD5.54 (March 13th) — Today USD8.31.
During times of economic pessimism, political shenanigans and civil unrest, the world requires “a great white hope”. Could the nascent flying taxi industry be that promise? In a week’s time, the Paris Airshow begins where the top eVTOL companies have their aircraft on display. To add excitement, Volocopter is offering flying demonstrations of its two-seater Volocity. How will the media respond? Almost certainly very favourably, as they seek a distraction away from the global problems, pointing to the future as a possible resolution.
Volocity All Set For Paris (credit Volocopter)
Meanwhile, just one year away, the Paris Olympic Games begins where Volocity remains on the media radar with promises of over 1,000 potential 15 minute flights for the public at a price of EUR110. Unfortunately, Volocopter has chosen not to seek investment via the Stock Market and instead relies on private finances. This means the public cannot buy the company shares.
Meanwhile, some of the leading eVTOL companies look set to continue enjoying their share price revival over the coming months. And while EHang has been claiming for over a year now, its EH216 AAV is “over 90 percent” towards full certification from the CAAC, if “the full 100” occurs and commercial operations begin, this will be a massive boost for the industry.
seekingalpha enthusiastically writes, “eVTOL aircraft, given their optimised ranges in the 20 to 50 mile range for journeys, are in a strong position to take a share in the ground vehicle-based ridesharing sector. Based on our estimates, around 15 percent of rides hailed to and from airports and 5 percent of longer-distance regional trips could be replaced by eVTOL aircraft, potentially reaching 45 million monthly active riders within the next decade. At a target ticket price of USD107 for an airport-ranged flight, we estimate that the TAM for eVTOL travel in urban metros could be worth nearly USD58 billion by 2033.”
Extraordinary financial figures, indeed, but no-one can deny the incredible potential both the eVTOL and drone industries offer. It is whether that potential can unfold given the many hurdles still to overcome.
Can EHang Achieve “The Full 100”? (credit EHang)
While a concern remains for Lilium and whether it can attract sufficient investment to actually bring its Jet to market, Joby, Eve Air Mobility, EHang, AutoFlight and Archer, for example, look favourites to reach the finishing line.
seekingalpha remarks, “In our view, Joby and Archer are the closest to having their respective aircraft types certified by regulators, with years of flight tests under their belts and final approvals expected in 2024 and 2025. Meanwhile, Eve Air Mobility, which is backed by Embraer, has yet to fly an aircraft, but amassed a massive USD8.3 billion order backlog. All three are well capitalised.”
It continues, “By contrast, Lilium and Vertical Aerospace look much farther away from reaching certification. As such, both are started at HOLD ratings in contrast to the BUY ratings assigned to Joby and Archer.The latter are assigned ambitious price targets of USD8 and USD9 respectively. The upside projected for Eve Air Mobility, Lilium and Vertical Aerospace are comparatively far more modest.”
So, let us hope when this short-term share price rise ends and values drop again, the lows become higher and the highs higher. For now, investors should enjoy the moment, even though many still find their equity values residing in negative territory.
