I have been dreaming about flying cars since I was a child, watching the cartoon “The Jetsons.” For those old enough to remember, the Jetsons were the cartoon family of the future, and they owned a flying car. That was imagined back in the early 1960s, so shouldn’t we have flying cars by now? Or at least a “flying option” for traffic jams?
One of the exciting new technologies coming to market are electric vertical take-off and landing aircraft, otherwise known as eVTOL vehicles. Also referred to as air taxis or flying taxis, these battery-powered electric vehicles hover and fly much like a helicopter and can carry from two to six passengers, including a pilot. Some predict that eVTOLs could disrupt the $49 billion helicopter industry, but the real disruption may be adapting these vehicles for personal use.
Who Makes Flying Cars?
There are several companies making my dream of flying cars a reality. The largest of these companies is Joby Aviation (JOBY). You can watch their cool demo video here. Joby acquired Uber’s Elevate business in December of 2020. More recently, Joby acquired another company called Xwing, an industry leader in autonomous aviation. That’s right, not only will there be cars be flying around, but they won’t even need pilots.
There are currently 49 ETFs that hold a position in JOBY, including the Alger 35 ETF (ATFV ), the WisdomTree Battery Value Chain and Innovation Fund (WBAT ), the SPDR S&P Transportation ETF (XTN ), and the ARK Space Exploration and Innovation ETF (ARKX ), which all hold positions sizes above 2%. Joby was also recently added to the ROBO Global Robotics and Automation Index (ROBO) in its latest rebalance. You can read VettaFi’s Zeno Mercer’s analysis of the company on ETF Trends.
Another player in the flying car race is Archer Aviation (ACHR). It is based in San Jose and aims to deploy 6,000 eVTOLs by 2030. There are currently 36 ETFs that hold this company, with its largest holders being ARKX, the SPDR S&P Aerospace and Defense ETF (XAR ), the ARK Autonomous Technology and Robotics ETF (ARKQ ), and WBAT. Archer recently received FAA certification authorizing it to operate as a commercial airline. The firm will be working with United Airlines, which just purchased 100 eVTOL aircraft from Archer to fly from Manhattan to Newark next year.
The Ultimate in Range Anxiety
An all-electric eVTOL flies solely on battery power and currently has a range of only 60 miles. That means current versions are only suitable as an alternative for intra-city transportation for urban air mobility (UAM) or as taxi services. While land-based EV’s have the issue of “range anxiety” trying to find a charging station, range anxiety is even more acute when you are in the air!
Another company called Alef Aeronautics has built a car that is “road legal” but can also travel in the air. You can pre-order an Alef Model A here for an expected price of $299,999. This vehicle looks more like what Detroit would build. It is designed to drive on the street and take off vertically when needed to fly above traffic. Plus, it seems perfect for the morning commute!
ETFs a Great Way to Play
ETFs are a great way to gain exposure to nascent disruptive themes like flying cars. We know the future of transportation will likely be electric, autonomous, carbon neutral, and shared. However, which companies will ultimately become the winners in flying car technology is still hard to say.
Many large companies, including Boeing, Airbus, Rolls Royce, and Hyundai, are pursuing this technology, as well as smaller, pure players. Furthermore, today’s flying cars will look very different from those of the future. Will they be more like helicopters, cars, or both?
With so many unanswered questions, diversified exposure in an ETF is likely the best way to go before dreams of the future play out in reality. Despite the promise and hype, Joby and Archer are down significantly year-to-date.
Some ETFs are specifically focused on the future of mobility and transportation. They include the SPDR S&P Kensho Smart Mobility ETF (HAIL ), the First Trust S-Network Future Vehicles & Technology ETF (CARZ ), and the SmartETFs Smart Transportation and Technology ETF (MOTO ). Although none of these provide any exposure to flying cars, they offer other imaginings of the future of transportation.
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