Q2 2024 Earnings Summary
- Joby Aviation is making significant progress towards FAA certification of its battery-electric aircraft, reaching 37% completion on Stage 4, and expects to accelerate progress in the back half of the year, paving the way for commercial operations.
- The company plans to launch commercial operations in Dubai next year, with infrastructure breaking ground later this year and first flights in the first half of next year, and is making significant progress in international markets like Japan, Korea, UK, and Australia, indicating strong international expansion opportunities.
- Joby's hydrogen-electric program demonstrated over 500-mile range in test flights, with minimal incremental spend, potentially expanding its addressable market to regional services and significantly increasing value for customers.
- Joby Aviation's focus may be diluted by exploring multiple new technologies simultaneously, such as hydrogen propulsion and autonomy, which could distract from their primary goal of achieving FAA certification for their battery-electric eVTOL aircraft, potentially delaying time to market.
- The company has not yet demonstrated transition flights with their production-conforming aircraft, and is not prioritizing flying time, which could indicate potential delays or challenges in the flight test process necessary for FAA certification.
- Joby Aviation may face difficulties entering the European market due to potential challenges in achieving EASA certification, as EASA may have higher safety standards than the FAA, potentially limiting access to a significant market.
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Commercialization Timeline
Q: When will commercialization begin, especially in Dubai?
A: Joby plans to start commercial operations in Dubai next year, with first flights in the first half and commercialization toward the back half of the year. They've seen strong support from the government and momentum in infrastructure development. Additionally, they're making progress in Japan, Korea, the UK, and Australia, leveraging bilateral relationships with the FAA. -
Certification Progress
Q: How is progress on FAA certification and timeline to type certificate?
A: The company has made significant progress on Stage 4 of FAA certification, with 37% complete, marking more progress this quarter than any previous one. They expect to accelerate further and are moving into more complex systems like flight control and propulsion. They aim to achieve type certification by late 2025. -
Production Ramp-Up and Cost Reductions
Q: What lessons have been learned to help ramp up production?
A: Joby has been fine-tuning their manufacturing processes, seeing double-digit yield improvements and exceeding the target of producing one aircraft a month on multiple fronts. These efficiencies have led to cost reductions and quality improvements. Their partnership with Toyota continues to pay dividends in optimizing production. -
Hydrogen Aircraft Development
Q: What is the vision for the hydrogen aircraft?
A: The hydrogen-electric program is seen as a game-changer that can dramatically improve sustainability and performance. They retrofitted their battery-electric aircraft with a hydrogen-electric system, delivering substantially more range. The spend on this program is extremely small, but it opens up large adjacent markets by enabling regional services. -
Flight Testing and Production-Conforming Aircraft
Q: Where are you in the flight test process with production-conforming aircraft?
A: Joby has been focusing on making progress in Stage 4, building certified software and hardware, converting test assets into conforming assets, and progressing test plans with the FAA. While they haven't prioritized extensive flight testing recently, they expect to see all their airplanes flying in the next quarter. -
EASA Certification and European Market
Q: What's the outlook for EASA certification and entering Europe?
A: Joby continues to work with EASA and the FAA to align on the path toward certification. Their focus remains on the FAA, and they've seen steps toward greater alignment. They expect to have a closer path to EASA certification after completing work with the UK CAA and others. -
Production of Additional Aircraft
Q: Why continue building production-conforming aircraft beyond certification needs?
A: The aircraft being built have multiple purposes, including maturing the quality management system, supporting the path toward a production certificate, and serving for DoD applications and international demonstrations. This strategy helps refine scalable processes and meets demand from various stakeholders. -
Focus Amid Expansion Efforts
Q: Are you straying from focus on certifying the aircraft?
A: Management asserts they remain extremely focused on certifying the battery-electric aircraft and are making fantastic progress. They see opportunities to build on this platform by layering incremental technologies, while still prioritizing certification efforts. -
Definition of Core Markets
Q: What do you mean by "core markets"?
A: All markets discussed are considered potentially core markets. Joby is leaning into opportunities in Dubai and also actively working on potential services in the U.S. with partners like Delta and Uber. There's no special meaning to the term, and they are excited about all these markets.