The air taxi market is projected to grow to $1 trillion. What smaller companies could take off?
The world’s largest cities are overcrowded, and there is no end in sight to their growth. This makes alternatives to traditional ground transportation increasingly necessary. One of them is air taxis. In fact, JPMorgan sees the air taxi market reaching $1.0 trillion by 2040, versus just over $3.5 billion in 2023.
What are the smaller companies vying for a share of it?
Sky traffic
Today, 56% of the global population — about 4.4 billion people — live in cities. The World Bank estimates that by 2050, this number could rise significantly, with seven in 10 people calling cities home. This growing urbanization is putting immense pressure on city infrastructure. For instance, the 32-kilometer trip from Newark Airport in New Jersey to downtown Manhattan can take more than an hour by car due to traffic.
This is why the idea of expanded urban air mobility with electric vertical takeoff and landing (eVTOL) aircraft is gaining traction.
Currently, helicopters have a monopoly in the urban air mobility market, JPMorgan points out. However, they are noisy, which limits the number that can fly. The up-and-coming mode of transport is electric, meaning eVTOL aircraft are more environmentally friendly and quieter.
There is also a difference in cost. According to flyingcarsmarket.com, a light helicopter like the Bell 407 costs $2.5-3.0 million, while a medium-sized helicopter like the Airbus H145 starts at $10 million and a heavy-lift helicopter, such as the Sikorsky S-92, can exceed $27 million. In contrast, eVTOL aircraft are expected to cost between $1 million and $5 million.
The first known eVTOL aircraft is considered to be Project Zero, unveiled by the Anglo-Italian helicopter manufacturer AgustaWestland in 2011. However, its battery lasted only 10 minutes. Since then, companies like Germany’s Volocopter (now nearly bankrupt), Uber, and Airbus, not to mention NASA, have entered the race. Startups have proliferated, as well.
In October 2024, the U.S. Federal Aviation Administration (FAA) approved eVTOL aircraft to operate in national airspace alongside conventional airplanes and helicopters.
«A new era of aviation is here,» the FAA declared at the time. TechCrunch called it «a win for the burgeoning industry.»
Archer and Joby: The two front-runners
For U.S.-based eVTOL aircraft manufacturers Archer and Joby Aviation, this year could be a turning point. That is because the FAA is expected to approve both companies’ aircraft for commercial flights in 2025, enabling them to start sales to clients, as reported by Barron’s.
Archer intends to offer air taxi services in New York, allowing passengers to reach downtown Manhattan, for example, in just a few minutes for around $100 per person.
«We are trying to improve urban air mobility for trips of around 20-50 miles (30-80 km),» said Archer founder and CEO Adam Goldstein. «That is trips that take 60-90 minutes on the ground that we can replace with a five-to-ten-minute flight in the air.»
Founded in 2018, Archer had raised more than $1 billion from investors by 2023. The company has over $6 billion in indicative orders, with partners including Southwest Airlines, United Airlines, and automaker Stellantis. Moreover, in December, the company signed a multiparty agreement with key UAE and Abu Dhabi entities to make it the first commercial air taxi operator in Abu Dhabi. The emirate plans to launch the first flights by the year-end. Archer is also working to secure certifications to launch passenger services in other major cities worldwide.
Joby has secured orders worth more than $17 billion, which makes it the leader in the air taxi sector, notes Sergey Glinyanov, a senior analyst at Freedom Finance Global. The company is at the second-to-last stage of FAA type certification and, once approved, it will be ready to launch commercial operations, Greg Bowles, head of government affairs at Joby Aviation, told TechCrunch.
Joby has received almost $900 million in investment from Toyota Motors and received FAA approval to begin training pilots for its air taxis, a critical step toward launching commercial flights.
However, these accomplishments did not prevent JPMorgan from downgrading both companies on January 10: The bank took Joby from «hold» to «sell» and Archer from «buy» to «hold» while raising their target prices — by 20% to $6.00 per share and by 50% to $9.00 per share, respectively.
The issue is that both stocks are rising too much and too fast, Barron’s says. JPMorgan analyst Bill Peterson said that they were trading as if type certification had already been completed. Both companies are likely seen as «speculative tech beneficiaries» of Donald Trump’s new term in the White House, with investors expecting the new administration to support the commercial space and eVTOL sectors.
Needham analyst Chris Pierce warns that neither Archer nor Joby will turn a profit before 2028, although by the end of the decade, each could generate more than $4 billion in annual revenue.
According to MarketWatch, among the nine analysts covering Joby, there are five «buys,» two «holds,» and two «sells.» Their average target price is $8.06 per share, 2.5% above the current market price. Archer has seven «buy» ratings and two «holds,» with an average target price of $11.33 per share, implying upside of almost 24%.
EHang Holdings: A pioneer from China
InvestorPlace has highlighted China’s Nasdaq-listed EHang Holdings among the companies that could compete for the $1 trillion market. Unlike peers’ products, its autonomous EHang EH216-S has already received all necessary regulatory approvals for flights, including the world’s first type certificate, production certificate, and standard airworthiness certificate for an autonomous eVTOL aircraft — all granted by the Civil Aviation Administration of China.
Its aircraft has only two passenger seats and is fully autonomous, which requires the company to set up its own flight control centers at the same time, says Glinyanov.
Last month, EHang completed a demo flight of its air taxi in Shanghai and announced sightseeing routes in the city — the first step before launching full-scale air taxi services. The company has also conducted demo flights in Saudi Arabia, the UAE, Spain, Costa Rica, and Japan. Additionally, it has partnered with KC Smart Mobility to operate eVTOL aircraft in Hong Kong and Macau.
«Clearly, EHang is establishing a strong base for stellar growth in the next few years,» pointed out InvestorPlace.
EHang stock is up almost 70% over the last year. Ten analysts rate it a «buy,» while one has it as a «hold.» Their average target price is $152.50 per share, more than eight times the current market price.
EHang is one of the few sector companies generating relatively stable and gradually growing revenue, notes Glinyanov. At the end of 2024, EHang reported that its preliminary top line for the 2024 fourth quarter was CNY162 million (approximately $22.5 million), up 187% year over year, with the full-year figure at CNY454 million, up 287% year over year.
Eve: Strongly supported by parent company
Another air taxi maker is Eve Air Mobility, a subsidiary of Brazil’s Embraer. Eve has a $1.44 billion market capitalization on the New York Stock Exchange.
In November, the National Civil Aviation Agency of Brazil published airworthiness certification criteria for Eve’s air taxi, which covered its structure, control systems, propulsion, and batteries. Based on these criteria, Eve expects to receive type certification and approval to launch full-scale service from the local regulator in 2026, says Glinyanov.
He believes the company is likely to launch sales in the U.S. at the same time as its peers or slightly later.
The company’s advantage lies in the support of its parent company, as noted by JPMorgan in 2023. Eve was part of Embraer for nearly four years after its creation, before being spun off in 2020. Embraer at the time stated that it would continue working with its subsidiary following the spin-off.
«This represents, in our view, a significant competitive advantage versus peers, as it will allow Eve to leverage Embraer’s know-how and existing development infrastructure, reducing its short-term capex and opex,» JPMorgan said at the time.
In December, Eve signed a letter of intent with helicopter operator Helicopters Inc. for up to 50 eVTOL aircraft. In total, the company has letters of intent for almost 3,000 units from 30 clients across 12 countries. It has order commitments (both confirmed and unconfirmed) of about $14 billion, Glinyanov says, citing data from the analytics firm Cirium.
Out of the nine analysts covering Eve, six have «buy» recommendations, while three rate it a «hold.» Their average target price of $6.33 per share suggests upside of more than 30%.
Vertical Aerospace: The UK player
The British firm Vertical Aerospace, with a market capitalization of $110 million on the Nasdaq, boasts an order book of about $6 billion. It plans to certify its VX4 air taxi by 2028.
«Currently, Vertical is focused on obtaining approval from local regulators in Europe and the UK, but it also aims to enter markets in the U.S., Brazil, Japan, and others,» says Glinyanov.
Vertical has two «buy» ratings, one «hold,» and one «sell» among coverage analysts. Their average target price is $7.58 per share, implying 52% upside.
XTI Aerospace: A high-risk investment
Another company highlighted by Glinyanov is XTI Aerospace, which has a market capitalization of just $8.85 million. This company is suitable only for investors with a very high risk tolerance, however. XTI plans to begin testing a full-scale aircraft in 2026. Among the downsides, it lacks high-profile investors, has limited financial resources, and is currently involved in a legal dispute with aerospace technology developer Xeriant, says Glinyanov. Xeriant accuses XTI of fraud and unfair competition, among other things, without disclosing further details. All of this makes XTI stock rather unattractive, Glinyanov concludes.
The two analysts who cover XTI both have «buy» recommendations. Their average target price is $13.50 per share, almost three times the current price.
For investors
«There are several other nonpublic players in the market. Major aerospace companies like Airbus and Textron also have their own projects but are keeping them under wraps, waiting for the right moment to enter the market,» notes Glinyanov.
Chris Pierce from Needham expects air taxis to be launched in the U.S. by 2028, which aligns with the FAA’s Innovate 2028 plan.
One major hurdle for the sector is complicated regulation. To begin operations, air taxis need to obtain type certification, while their pilots need to undergo specialized training. Additionally, rules for the safe operation of air taxis — especially in densely populated areas — still need to be developed, TechCrunch points out.
«The policy part, the infrastructure part, and the regulation parts are lagging behind the technology,» in the view of Farhan Gandhi, director of Rensselaer Polytechnic Institute’s Center for Mobility with Vertical Lift, as quoted by JPMorgan.
This new mode of transport will also require dedicated infrastructure. For example, although Archer’s helicopters plan to use existing helipads for now, growing demand will necessitate the construction of new «vertiports» — something that may prove difficult in heavily populated urban areas.
