Joby's Manufacturing Expansion Faces Steep Certification and Financial Hurdles

What happened

Joby Aviation announced plans to double its U.S. manufacturing capacity, targeting production of four aircraft per month by 2027, amid claims of unprecedented support for advanced air mobility and over $1 billion in potential sales. However, this optimistic press release contrasts sharply with the DeepValue report, which notes that Joby remains effectively pre-commercial with minimal revenue—$136 thousand in 2024 and $22.6 million in the first nine months of 2025—against net losses of $608 million and $808 million, respectively. The report highlights that FAA type inspection authorization flight tests are now expected to begin in 2026, pushing meaningful commercial service into the later 2020s, far beyond earlier timelines. Joby's cash burn remains deeply negative, with recent equity raises providing liquidity but not addressing the core need for certification before scaling production. Thus, while the manufacturing expansion signals long-term ambition, it must be critically assessed against persistent regulatory delays, high funding risks, and an unproven urban air mobility market.

Implication

The manufacturing plan increases fixed costs and capital commitments without near-term revenue upside, as FAA certification delays to 2026 mean production facilities may remain underutilized for years. Joby's aggressive cash burn—over $100 million per quarter recently—necessitates further equity raises, likely diluting shareholders and straining balance sheet health. The touted $1 billion in potential sales is non-binding and hinges on regulatory approval, infrastructure build-out, and consumer adoption, all of which face significant uncertainty. Given the high price-to-book ratio of over 13x and negative free cash flow, the market's premium valuation relies on speculative milestones rather than fundamentals. Consequently, this news reinforces the need for a cautious, wait-and-monitor approach, as execution risks outweigh the strategic promise of expansion.

Thesis delta

This announcement does not shift the core investment thesis from 'WAIT,' as it amplifies rather than mitigates key risks. Manufacturing expansion adds capital intensity and execution complexity without addressing the critical certification delays or cash burn highlighted in the DeepValue report. The thesis remains unchanged: investors are paying for a long-dated, binary option on an unproven market, with this news underscoring the gap between forward-looking plans and current operational realities.