The eVTOL market was $10.9 billion in size in 2022, and market analysts predict this value could very well increase to $24.1 billion in 2024.
However, because many of these companies are start-ups operating in a new sector, their share prices have faced and will continue to succumb to massive swings in the market. A world with elevated interest rates and continued macroeconomic uncertainty will drive valuations downward. Below are 3 flying car stocks to buy
EHang (EH)
I’ve written extensively about China’s top eVTOL vehicle start up, EHang (NASDAQ:EH), and for good reason. The infrastructure of many Chinese cities is both modern and sophisticated. Public transportation in these cities is also ubiquitous. Adding a flying car to the mix would just add to people’s choices in terms of getting around these huge metropolises. EHang was able obtain airworthiness certification from China’s Civil Aviation Authority, paving way for the start up to launch its homegrown EHang AAV.
Outside of manufacturing its flagship AAV, the company has also made successful partnerships in the city of Guangzhou. In particular, EHang will work with Guangzhou Greater Bay Technology to develop battery systems for eVTOL aircraft. Internationally, EHang has focused in on entering the United Arab Emirates market. A recent partnership with Abu Dhabi Investment Office will kick start the process of bring eVTOL aircraft to the country’s capital city.
EHang shares have risen more than 6% YTD.
Embraer (ERJ)
Embraer (NYSE:ERJ) is Brazil’s largest aircraft manufacturer and remains a solid diversification play for investors interested in the flying car space. The company has been building eVTOL vehicles for some years now. However, a new partnership with the aircraft manufacturer’s subsidiary Eve (NYSE:EVEX) will expand the company’s opportunities. Eve recently signed an agreement with Japan’s public helicopter charter service company AirX to sell up to 50 eVTOLs. More deals like this are likely in the works.
ERJ’s share price has risen 38.5% on a year-to-date basis, trouncing all major market indexes and even several tech giants. The company is also just trading at 22.6x forward earnings, which creates an opportunity for both growth and value investors.
Lilium (LILM)
Lilium N.V. (NASDAQ:LILM) is the final entry on this list, and the eVTOL aircraft startup is based in Germany. Germany as well as Western Europe more broadly are full of diverse arrays of public transportation networks. Bringing electric flying vehicles to the region would not only add another mode of transportation to the region’s inhabitants but will also be in line with the European Union’s efforts to decarbonize.
The Lilium Jet is the start up’s flagship product that investors are anticipating, and production of this eVTOL aircraft has already begun in December 2023. Lilium is also likely to diversify its customer base and branch out internationally having already received various indications of interest worldwide for its Lilium Jet product in Europe, the U.S. and China.
Because of how nascent the flying car market still is, Lilium trades just under a $1/share as of the end of April. Still, the long-term opportunity embedded in the sector will likely send shares higher, making the stock one to buy if prices plunge again.
On the date of publication, Tyrik Torres did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
Tyrik Torres has been studying and participating in financial markets since he was in college, and he has particular passion for helping people understand complex systems. His areas of expertise are semiconductor and enterprise software equities. He has work experience in both investing (public and private markets) and investment banking.