Toyota to invest $500mn in flying taxi start-up Joby

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Toyota has said it will invest $500mn and raise its stake in Joby Aviation as the carmaker boosts its backing for the air taxi start-up that aims to launch commercial services as soon as next year. 

The investment from the Japanese company, which is Joby’s largest external shareholder, is tied to a wider strategic alliance to help the US group commercialise and manufacture its air taxis. 

JoeBen Bevirt, Joby’s founder and chief executive, said he was looking forward to building a manufacturing alliance with Toyota to “really scale this new model of transportation”.

Founded in 2009, the California-based company listed on the New York Stock Exchange in 2021. It is among several start-ups and aerospace incumbents hoping to make the vision of emission-free “urban air mobility” a reality through the launch of “electric vertical take-off and landing” (eVTOL) aircraft.

Several start-ups have been forced to tap investors for more funding in recent months and push back certification milestones as the challenges of developing these aircraft have become clearer. There are also other hurdles, such as building the necessary infrastructure and winning public acceptance.

Joby, however, is among the better-capitalised players in the sector and had raised more than $2bn prior to Toyota’s latest commitment.

Its aircraft is the first eVTOL to have had its certification plans accepted by the US aviation safety regulator, the Federal Aviation Administration, and it is now working towards full approval.

Bevirt said the company was focused on launching its first commercial service in Dubai next year. A pilot production line in Marina, California, is up and running with plans to increase production capacity to one vehicle a month by the end of this year. 

The new investment from Toyota, which will be in two tranches, “builds on nearly seven years of collaboration” between the two companies, said Bevirt. It will take Toyota’s total commitment to close to $900mn. The investment would increase Toyota’s stake in Joby, whose other backers include asset manager Baillie Gifford, to more than 20 per cent, he added.

The start-up has been working with engineers from Toyota as part of an earlier agreement to improve its processes. The car company has also been supplying components for some of Joby’s systems. Details of the wider manufacturing alliance would be released at a later date, Bevirt said.

Toyota’s investment is part of the carmaker’s wider strategy of betting on multiple technologies and its belief that it will need to provide consumers with an array of cars at various price-points.

As part of that bet, the world’s largest carmaker by sales is investing in core technologies — such as electric vehicles, hydrogen cars and next-generation internal combustion engines for hybrids — as well as initiatives such as air taxis, through Joby.

“Air mobility has the potential to significantly change the way people move and live in the future mobility society, and its commercialisation has been one of Toyota’s dreams since its founding,” the company said.

Toyota also has a long history of investment and research in aeronautics, going back to its founder, Sakichi Toyoda, who offered a ¥1mn price in 1925 for anyone who could invent a storage battery that could power long-range cars and aeroplanes.