Joby, Archer Navigate eVTOL Uncertainty As FAA Delays, Market Shifts Persist

The promise of electric vertical takeoff and landing (eVTOL) aircraft once had Wall Street dreaming of a trillion-dollar market. Now, reality is setting in.

JPMorgan analyst Bill Peterson warns that commercialization is proving longer, tougher, and less lucrative than once imagined.

FAA Roadblocks, Regulatory Chaos

The biggest question facing the industry: When will the FAA start issuing type certificates for eVTOLs?

Peterson's answer: Not anytime soon.

2025 is likely off the table, and without regulatory harmony between the FAA and Europe's EASA, certification could face greater hurdles than expected. That's bad news for eVTOL players hoping for a smooth takeoff.

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UAE Dreams Face Reality

The UAE was supposed to be an early eVTOL success story, offering a regulatory sandbox and deep-pocketed backers. But according to Peterson, the rollout there is shaping up to be far different than expected, at least in the early stages. Investors betting on a quick overseas launch may need to adjust their timelines.

A Shrinking Market With A Lifeline

Once pegged as a trillion-dollar opportunity, the eVTOL market is facing contraction. Diversification beyond passenger transport has delivered mixed results, and expectations for total addressable market size have declined from the sky-high projections of three to four years ago, the analyst notes.

While the passenger market struggles to get off the ground, defense is emerging as a more immediate and potentially larger opportunity.

The big question: Can eVTOL players do it all? Pivoting to military contracts could bring in revenue faster, but it also means navigating government procurement hurdles and shifting priorities away from commercial operations.

JOBY Vs. ACHR: The Valuation Gap Tightens

One of the more interesting developments in the eVTOL space?

The valuation gap between Joby Aviation Inc (NYSE:JOBY) and Archer Aviation Inc (NYSE:ACHR) is narrowing. Archer has gained traction as investors assign more value to its defense potential and creative revenue pathways. While some worry that Archer's piloted flight timeline has slipped, JPMorgan sees the real differentiators between the two as:

• cash burn
• dilution risk
• defense opportunities, and
• eventual real-world performance.

Peterson remains Neutral on Archer and Underweight on Joby – signaling that while the hype has cooled, the industry's next chapter is still being written.

One thing's clear: eVTOLs aren't taking off as fast as investors once hoped.

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Image created using artificial intelligence via Midjourney.