Helicopters Out, eVTOLs In?

Understanding the eVTOL Landscape

In this podcast, Motley Fool contributors Travis Hoium, Lou Whiteman, and Rachel Warren discuss various topics including retail sales, what eVTOLs are, how they plan to make money, and their favorite eVTOL stocks. The discussion provides insights into the current state of the eVTOL market and its potential future.

Retail Sales Insights

The podcast begins with a discussion on retail sales, particularly focusing on the Black Friday shopping season. Rachel Warren highlights that while online sales reached a record $11.8 billion, many consumers bought fewer items, indicating a more cautious approach. She also notes that global online sales hit $79 billion, showing that the trend is not limited to the U.S. Despite the overall positive numbers, there is a concern about the impact of inflation on consumer spending.

Lou Whiteman adds that while the top-line numbers are impressive, the volume of purchases has decreased. He points out that the shift in shopping patterns, with events like Black Friday extending into a longer season, complicates data interpretation. However, he emphasizes that there is still a significant portion of consumers who are spending robustly, even if others are struggling.

The Rise of eVTOLs

The conversation then transitions to eVTOLs, or electric vertical takeoff and landing aircraft. Lou Whiteman explains that these are flying cars that have been developed for commercial use. They resemble small airplanes with wings for stability but can take off and land vertically like helicopters. He mentions that several companies, including Joby and Archer, are leading the charge in this space.

Business Models and Revenue Streams

When discussing how eVTOL companies will make money, Lou Whiteman outlines two main models: selling the aircraft directly or operating air taxi services. Joby, for example, plans to operate its own air taxi service, while Archer focuses on selling the aircraft to airlines and other customers. Both companies are working with major partners such as Delta Air Lines and Stellantis.

Rachel Warren adds that while the business models are still evolving, there is potential for growth in areas like cargo delivery and government defense contracts. She also notes that regulatory frameworks are being developed to support the integration of eVTOLs into the existing aviation system.

Investment Opportunities

When asked about investment opportunities, Lou Whiteman expresses confidence in Joby, citing its strong business model and management team. Rachel Warren, on the other hand, prefers Archer, highlighting its potential and the strength of its partnerships. Both agree that the eVTOL market is still in its early stages, with significant opportunities for growth.

Conclusion

The podcast concludes with a discussion on the future of eVTOLs and their potential impact on transportation. While challenges remain, the industry is moving forward with promising developments. Investors are advised to keep an eye on key players and the evolving business models in this exciting sector.