Joby Aviation (NYSE: JOBY) is delaying the commercial service launch of its electric vertical take-off and landing (eVTOL) services until 2025, in part, because of regulatory hurdles, the company’s founder and CEO JoeBen Bevirt said Thursday.
Bevirt told investors that hurdles with the Federal Aviation Administration (FAA)—as well as Joby’s focus on being vertically integrated—are the reasons for delaying the launch from 2024 as it initially predicted.
In certifying its launch vehicle, Joby said it would need to wait for the FAA to publish its special federal aviation regulations (SFARs), which is necessary for eVTOL companies to have a clear pathway to certification. It’s a change from what Joby said earlier this year when the FAA published its modified regulatory approach to type certification. At the time, Joby said it didn’t expect any delays, but Bevirt told investors that the volume of work ahead was more than anticipated.
“We originally believed we would certify our aircraft with the FAA under Part 2117A,” Bevirt said. “That path would not have required any new or modified rulemaking on the operational side. The FAA has advised the sector that we will be certifying our aircraft under the 2117B path instead. This means that to operate our aircraft, we will need SFARs in place, and the FAA has advised that they don’t expect these to be finalized until late 2024. We, therefore, don’t expect commercial passenger service to start until 2025.”
Still, the CEO was conciliatory towards the FAA and thanked them for their leadership, what he described as a “nascent sector.”
The other point of contention that the company said would delay its commercial launch is its different approach to vertically integrating its development and launch programs.
“We have focused on vertical integration, and this is a huge asset, but it also means that we’re taking on a heavy lift,” Bevirt said. He explained that the company was investing in evolving its manufacturing process to make it more efficient. That would allow Joby to build powertrain components and digitize its construction system, as well as other things—such as prototyping and testing—more quickly than its competitors, Bevirt said.
“We are building a next-generation aviation company. This is hard work, but it is going to pay massive dividends,” he said.
Despite the setback, the company’s third quarter reflected the major highlight of Delta Air Lines’ $60 million upfront equity investment in the startup to launch a home-to-airport service.
Joby’s chief financial officer, Matthew Field, shared with investors that the tie-up with the major airline was unique in the aviation industry, particularly because Delta could invest further up to $140 million through warrants tied to operating milestones. For Joby, it gives them an added boost as they try to earn certification for their vehicle.
As for spending, the company said its overall loss for the quarter was $79.2 million. The company continues to grow its personnel to support operations and research and development costs to build, test, and launch its production aircraft. Joby said it now will hire nearly 1,400 workers around the globe.
