Electric Flying Vehicles Will Be A $1 Trillion Market In The Coming Years, According To JPMorgan

According to JPMorgan, there is a $1 trillion market opportunity for electric flying cars, and one company in particular, Eve, is ready to take off.

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As it was established by Brazilian aircraft manufacturer Embraer, the firm, which creates electric vertical takeoff and landing vehicles (eVTOLs), has better knowledge, analyst Marcelo Motta noted in a note on Wednesday. Eve listed on the New York Stock Exchange in May of last year.

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He noted that 89% of the corporation is owned by Embraer.

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The services agreement between the company and Embraer, according to Mott, "represents, in our view, a significant competitive advantage vs peers as it will allow Eve to leverage on Embraer's know-how and existing development infrastructure reducing its short-term Capex and Opex." Mott also initiated coverage of Eve's stock with an overweight rating. His $8 price objective implies a 46% increase from Tuesday's closing price.

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According to him, Eve also has the most potential orders in the market, with 2.8 billion eVTOLs, or around $8 billion in value, from customers like United Airlines. United stated in September that it had contracted with the business to buy 200 electric air taxis and had the option to buy 200 more. Additionally, United is putting $15 million into Eve.

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According to Motta, the young eVTOLs market has enormous development potential. By 2040, the total addressable market for passenger transportation might be $1 trillion, and when cargo and military activities are factored in, that number rises to $3 trillion.

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According to Motta, this sector may potentially be larger than the $35 billion annual helicopter market and provide benefits for safety, lower noise emissions, and lower operational costs.

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Despite this, he does not anticipate Eve becoming profitable in the near future.

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Since the company should have a negative bottom line and negative FCF until 2027 or 2028, Motta predicted that corporate events such as new orders and certification milestones will have a more immediate impact on Eve's share price than quarterly profitability.

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Eve stock has decreased 24% so far this year.