Two helicopters at sunset

We first wrote about (and flew) drones last year. Say the word to most people and they will immediately think of keen hobbyists, their deployment in military circumstances or, maybe, the possibility of getting a parcel delivered easily at home. However, we argued in our work that the “holy grail” for the drone industry could lie in the transportation of people. While your author would be conceptually keen to use such a service, the reality has always seemed too hard to conceive. The good news: there is progress.

Joby Aviation, a US eVTOL (electric vertical take-off and landing) aircraft business based in Santa Cruz, has issued two significant press releases in the past month. The first saw it announce that it had received the required certification that allows it to start testing its first full production prototype, likely next year at a US military base. Joby’s pre-production prototypes have been in the air since 2019 and have flown over 30,000 miles. Subsequent to this news, Joby announced that it had submitted all required certification plans to the Federal Aviation Authority, specifying the tests, analyses and design reports required to demonstrate the safety of their vehicles. Commercial services are likely to begin in 2025, according to Joby, making it the first business in the US to do so.

Shareholders in Joby were rewarded with a 50% increase in its price over the past month, making the business worth over $6bn, despite the fact that the business has no revenue and will unlikely be profitable until at least the end of this decade. Other listed businesses received a similar uplift. Joby is far from being the only player seeking to exploit the eVTOL opportunity. Archer Aviation says its manufacturing facility should come on line in the middle of next year, while Electra Aero is hoping to have a prototype available in 2025.

The attraction for consumers (and presumably investors) is that eVTOL aircraft could absorb segments of the transport market that are currently too slow, inefficient, or alternatively too costly. Regional trains and flights might fall into the former category; expensive helicopters or jet charters into the latter. However, as ever, we caution about the importance of separating hype from reality. Beyond valuation levels for public investors, some plans just don’t look as if they will fly. One such story that caught our eye last week was an announcement from privately-owned Alef Aeronautics that its ‘flying car’ – priced at a mere $300,000 – had received approval for testing. Able to seat just two people and with an airborne range of 110 miles, demand is likely to prove niche for now, in our view.  

On the topic of flying, your author will be on a plane (an Airbus A320, not an eVTOL) this Friday, heading away for an early summer vacation. The Future Trends Blog will return in late July.

13 July 2023

The above does not constitute investment advice and is the sole opinion of the author at the time of publication. Past performance is no guide to future performance and the value of investments and income from them can fall as well as rise.

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Alex Gunz, Fund Manager

Congratulations to Fund Manager Alex Gunz for his Future Trends Blog being the runner up for Best Blog at the Investment Week Investment Marketing and Innovation Awards 2023!


The document is provided for information purposes only and does not constitute investment advice or any recommendation to buy, or sell or otherwise transact in any investments. The document is not intended to be construed as investment research. The contents of this document are based upon sources of information which Heptagon Capital LLP believes to be reliable. However, except to the extent required by applicable law or regulations, no guarantee, warranty or representation (express or implied) is given as to the accuracy or completeness of this document or its contents and, Heptagon Capital LLP, its affiliate companies and its members, officers, employees, agents and advisors do not accept any liability or responsibility in respect of the information or any views expressed herein. Opinions expressed whether in general or in both on the performance of individual investments and in a wider economic context represent the views of the contributor at the time of preparation. Where this document provides forward-looking statements which are based on relevant reports, current opinions, expectations and projections, actual results could differ materially from those anticipated in such statements. All opinions and estimates included in the document are subject to change without notice and Heptagon Capital LLP is under no obligation to update or revise information contained in the document. Furthermore, Heptagon Capital LLP disclaims any liability for any loss, damage, costs or expenses (including direct, indirect, special and consequential) howsoever arising which any person may suffer or incur as a result of viewing or utilising any information included in this document. 

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