All right. Good morning, everybody. I'm Savi Syth, the Raymond James' Global Airlines and Advanced Mobility Analyst. And next up, we have Joby, which is a pioneer in vertical takeoff and landing, or eVTOL, vehicles, and is one of the leaders in certifying this aircraft here in the U.S. Joby started with a team of seven in 2009 and has grown to a team of over 1,700 today. And I'm excited, actually, to welcome Joby's executive chairman, Paul Sciarra, who is one of the first outside investors of Joby. Many of you probably know Paul as kind of the co-founder and former CEO of Pinterest, as well as his kind of role in the leading venture capitalist firm, Andreessen Horowitz. But Paul, it's very exciting to have somebody who's actually invested in Joby as well as part of the team here.
Yeah, well, thank you, Savi, for having me. This is my first time to the conference, so it's really great to be here and in turn to have you guys here to listen to a little bit of the story. And as Savi was mentioning, look, this is a story that goes back quite a while. JoeBen, the founder and CEO of the company, has been thinking about electric aviation for multiple decades. And for the past 10 years, we've been designing, developing, and now certifying and manufacturing what we think is the best eVTOL aircraft on the market. My own involvement, as Savi said, started way back 10 or 12 years ago when the team was like seven people in Joby's backyard. Obviously, we've made incredible strides since.
And as I think we'll talk about, this year is pivotal, I think, both for Joby and the broader eVTOL industry as we really shift gears from development and certification into commercialization.
That's a very good point. It's definitely becoming a lot more tangible and a lot more exciting here. So you talked about it a little bit, but kind of could you provide a background? So what got you interested in Joby and what attracted you to the company?
Yeah, so if you flashback to sort of 2012, that was a moment where I think Tesla was showing what was possible with EVs on the ground. This fundamental shift in prime mover from combustion engine to electric motors and batteries or some other energy source was obviously a really big deal for that industry. And the question that I was asking myself was, look, what are the other areas of transportation that have an opportunity to be impacted by that shift in prime mover? Maybe the sort of obvious shift was to sort of aviation from ground vehicles. And back then, there were very few folks that were really working on this category. You had a company that was funded by Larry Page. It was then known as Zee.Aero, then became Kitty Hawk, then became Wisk, part of Boeing. And then there was the tiny team at Joby.
And the work that they had already done in terms of laying the technical building blocks for this sort of aircraft had already been done: extremely torque-dense electric motors, the right kind of lightweight materials, and a new way of thinking about controls that made designs that were before very difficult to manage, say, like the V-22 Osprey on one side, a lot easier. And if you sort of pulled all those together, the feeling was, look, you've got an opportunity to really build an aircraft that can change the way that transportation is thought about.
If you can get folks from A to B five to 10 x faster, if you can do that at similar costs to driving on the ground, if you can do that in a way that's extremely quiet so you can operate in and around cities and get people ever closer to the places that people want to go, you've got an opportunity to really shift the transportation grid from one that's traditionally been 2D on the ground to sort of 3D, and that's the sort of journey that we've been on since.
Interesting. So could you talk about some of the key aspects of kind of Joby's vision here, which you've laid out a little bit, but the business model and the strategy in kind of approaching kind of the opportunity that you see?
Yeah, so I think there are a few things that really sort of differentiate the Joby model from some of the other folks that are out there, and it certainly starts with the aircraft. For us, we always knew that the traditional aerospace supply chain would be poorly suited to delivering on the technology that was necessary for these sorts of aircraft, and I know that some folks sort of think that the aerospace technology supply chain is like the automotive supply chain. It's not. There is a lot of profit margin that ends up in the suppliers and the aerospace side of things. They are often the reason why programs are delayed, and they are often the reason why aircraft are so expensive.
So we wanted to make sure that we were doing a lot of that work in a vertically integrated way, building and designing most of the components that go on the vehicle. That wasn't because we wanted to reinvent the wheel. That wasn't because we wanted to make our lives more difficult, but because we knew that to get to the right performance specifications and to be able to correctly scale manufacturing at scales that will be larger than what you've seen in aerospace traditionally, we really had to do that work ourselves. Now, that's not to say it's easy.
It takes more people, takes more capital, but we think the end result of that vertical integration builds real competitive moats, competitive moats in terms of our ability to build the best aircraft and competitive moats in terms of being able to scale the production to meet the demand that we see out there. So that's always been a really critical piece of our vision. When it comes to how we commercialize, there are a number of different paths. And we've already talked previously and on recent sort of calls about what those look like. So in certain markets in the U.S., we think it's right to sort of vertically integrate to be both the aircraft builder and the operator. So that's what it's going to look like here in the U.S.
But outside of the U.S. and with certain customer bases, there's going to be a different model, one that looks more like a sale or lease model with sort of support on the back end. And we've already talked about how that service will build out in a vertically integrated way here in the U.S. and what those revenue opportunities are for sale and lease over time.
So I do want to kind of touch on some of those different aspects of it, but maybe first we can talk about what the Joby vehicle looks like and what differentiates it.
Yeah, so you can think about the Joby aircraft as a little bit like an Osprey, but with six tilting motors and propellers instead of the sort of two that you see on that. So it's a fuselage with a wing. And the reason for that configuration is that it creates both redundancy. You can fail a number of those stations and still maintain nominal flight, but it also allows for more careful control, avoiding some of the operational issues that have been problematic in tilt rotor designs in the past. So, I mean, for folks that don't know what the category looks like, it takes off and lands like a helicopter with the propellers up at 90 degrees. And then it transitions into forward flight mode as they move to zero degrees.
Then you're taking advantage of aerodynamic lift coming off the wing, and that allows for greater range, greater speeds, and lower noise profile than would be possible with just a scaled-up drone design, for example. All of the things that we did in terms of the design were really around three goals. First, ensuring that it was fast. Second, ensuring that we could move as many people per given unit of time as possible. And lastly, making sure that it was quiet, because one of the principal problems with the operation of small aircraft and helicopters in and around cities or, frankly, anywhere in the world is the noise. And we spent a ton of time making sure that this is an aircraft that will seamlessly blend into the background. And you don't have to just trust us on that. We've done 13,000 flight hours on the aircraft.
We've had our numbers sort of validated by NASA. This will blend into the background noise in any place where it's operating.
So you bring up a point. You've flown several kind of full-size models of the aircraft over the years. You just announced plans to build a certification-conforming aircraft. How did the different iterations compare, and kind of what's changed along the way?
The fundamental aircraft design hasn't changed from the first full-scale demonstrators that we were flying back in 2017. We've done refinements across that design. Now, as Savi was mentioning, a lot of the work is about building the FAA-conforming aircraft that is suitable for the final stages of certification, FAA TIA flight test. Now, that doesn't mean you're changing the design, but you are building it in a different way and in conjunction with a set of documentation that you've already gotten agreed to by the FAA on the other side. You can think about TIA flight test as sort of the last lap in certification. As Savi said, we announced that that's a process that we're going to be starting within the next 12 months.
So when I talked about why this is a sort of pivotal year for Joby and sort of for the industry as a whole, I think this is the year where the final laps in certification, the beginnings of commercialization really start.
Just on the kind of you talked about kind of production and giving a lot of thought to needing to build it in-house because maybe the aerospace suppliers cannot handle it. So how are you kind of approaching production? Along those lines, you have a kind of strong partner in Toyota that's also a strategic investor. What has kind of Toyota brought to the table for Joby? Kind of what was the reason for partnering? If you look across the industry, I think you do see a lot of automotive companies partnering with some of your competitors as well. Kind of what's the attraction here from a Toyota perspective in wanting to partner with Joby?
So, I mean, when you think about the partners set, and I want to talk about Toyota, but there's a number of other really sort of important partners that we've brought onto the company over time. So one is Delta, obviously the U.S. sort of preeminent airline. We're working with them really closely on infrastructure, particularly in and around airports where Delta already has a presence. We know that just like Uber, lots of trips on our aircraft are going to start or end at an airport. And if we can seamlessly connect your commercial flight to your Joby flight that gets you to your final destination, we think that's real value add and real demand generation across the overall platform, as well as obviously providing this critical infrastructure. The second important partner, which I guess I already referred to, is Uber.
So Uber is a significant investor in the company. Joby flights will be available, bookable on the Uber application sort of from day one. And Uber can also provide the first and last mile ground transportation to and from your Joby flight. So we're extremely pleased to have the largest ride-sharing platform as a critical demand funnel and partner as we sort of roll out this service sort of globally. But lastly, and it's important to sort of reference Toyota, we started that relationship, gosh, going back six years now, with an initial investment from Toyota Ventures that increased to a significantly larger investment from Toyota proper. And they recently made another $500 million capital commitment just before the end of last year, so bringing their total investment to the company to almost $900 million. So a very significant partner and shareholder in the business.
Look, these are the folks that know this business best. They've been working shoulder to shoulder with us on manufacturing and certification. We take it as a really strong vote of confidence to have that investor sort of double down on their investment ahead of, obviously, this sort of critical period for Joby and the overall industry. Toyota is, I think, undisputed one of the best companies at manufacturing complex regulated hardware at scale. We knew that when we thought about building these aircraft, we would have to think in automotive volumes as opposed to sort of traditional aerospace volumes. That means a different set of processes, a different underlying supply chain, and really a different way of thinking about core manufacturing layout. Toyota has been sort of with us in that journey for now more than four years.
And I think you'll hear announcements soon about a sort of additional lean from Toyota in terms of allowing us to get to ever higher volumes of scale above what we can already produce from our facilities both here in California and in turn in our sort of facility in Ohio. I mean, vis-à-vis why automotive companies are interested, and I think this is probably global sort of beyond Toyota, but I think that automotive companies are thinking about a world of autonomy and ride-sharing that perhaps doesn't require as many personally owned automobiles as the broader industry can produce. That's obviously been exacerbated by the supply influx from new automotive manufacturers in places like China. So what does that mean for an automotive company?
It means they have to think about where they're going to apply the manufacturing capacity and know-how that they've built out over hundreds of years. And maybe that's to another important category of transportation that's going to be higher growth than the core business that they've done for a very long time. I think what differentiates Toyota from many of the other automotive manufacturing companies that are out there is Toyota has a very stable management. It's got a balance sheet and a cash flow statement that can support continued investment. And it's got a history of making big, important bets, whether it's the hybrid powertrain, the power of the Prius, that really play out over a long time. And that is not the case for many other automotive manufacturing companies that have had significant management changes, do not have the ability to invest forward for future growth.
We couldn't be more pleased with the partnership that we've had with Toyota. We're very excited in the short term to talk to you about how that's going to evolve as we move into the next phase of manufacturing scale.
Look forward to hearing more on that. And maybe this is a good opportunity to talk a little bit more about what's the commercial opportunity there? It's probably a good thing that Delta is kind of combined with Uber now. And so that will make a much more seamless combination for you. But what's the TAM? This is a room full of investors. That's what we're trying to understand is what's out there to kind of go and address in the near term and in the longer term.
Yeah, so I think when you think about the sort of, I'm going to take the longer term and then sort of work back into the earlier term. When you think about the longer term, what is the value proposition for end consumers? Look, getting you to your destination 5x-10x faster, doing that at costs that are similar to driving on the ground, and for geographies, it's about building a new transportation mode that doesn't require the same fixed investment in new bridges, new roads, and new tunnels. Now, oftentimes, this has been talked about as an urban problem, and certainly, it is, right, over congestion in and around cities, but it's also applicable to more rural areas where the problem isn't overcrowded infrastructure, but it's non-existent infrastructure, and we think about this broader opportunity over time as being able to address both of those.
In addition, and it's obviously been an area that's been talked a lot about sort of recently in the industry, and Joby, I think, was also sort of at the forefront of this. It's not just about the consumer business, but it's also about government customers and companies that are already running aircraft operation that want a new mode of transportation, a replacement for helicopters that have the same sort of characteristics, the same value proposition as what we offer on the consumer side of things. So look, folks have pegged the numbers, 10 years, trillions of dollars. I mean, I think all of that is work that you guys can go look at. But I think what's really important in the very short term is who are the companies that are going to get to the finish line? The finish line is obviously certification, the ability to carry passengers.
But it's not just the aircraft. You also need to have the pieces of infrastructure, the complements to that in place to make it work. So that means pilot training. That means maintenance. That means infrastructure. And Joby has been methodically sort of building out all of those pieces for a very long time. You're not going to be able to sell aircraft if you can't train pilots to use them. You're not going to be able to sell aircraft if you can't help those folks maintain them. You're not going to be able to sell aircraft if those folks can't do useful things with them. And Joby has been squarely focused on ensuring that we get to that finish line, that we've got the capital, that we've got the partner set, and we've got the capabilities in-house to make that happen.
You did kind of allude to this a little bit. Defense has become an increasingly kind of an added opportunity. Civil is still kind of the biggest focus. But could you talk about Joby's participation with the kind of Department of Defense and maybe kind of how you're thinking about future opportunities?
Yeah. And sorry, I was smiling as you were asking the question. For Joby, this hasn't been a sort of new thing. And I say this because I was helping Joby back eight years ago when we started opening up conversations with various groups in defense about how they could apply eVTOL and hybrid VTOL to their mission sets. Joby's been working with a variety of groups inside of the DoD for quite a while. Started with DIU, a smaller group inside of DoD, translated to AFWERX, a Department of the Air Force. And we've now expanded the customer sets that we're talking to to Army, Marines, other branches of government, sorry, of the military. And Joby's relatively unique in the category of not only starting that work so early, but actually delivering on it.
So we have two aircraft, the second one that was sort of recently delivered to Edwards Air Force Base for essentially customer evaluation. We've already trained DoD pilots on how to operate this vehicle. And we've already trained DoD maintainers on how to maintain it over time. This was really important learning for Joby as a company because you can think about it as a sandbox where we're learning the things that are going to be necessary for commercial operation at a small scale before we have to do it at a large scale post-certification. But it's also opened up a number of interesting opportunities about how to replace an aging fixed-wing and rotorcraft fleet across the various departments of defense. And to give you some sense of the size and scale of that opportunity, the Army has the largest rotorcraft fleet anywhere in the world.
That's state-of-the-art technology, circa 1960, 1970, I think, if you're being generous. So there are lots of opportunity to essentially deliver something that is better and more performant. One of the things that has been really important for that set of customers is longer range. And under DoD contract, we already demonstrated that our aircraft can be an extensible platform for a wider range of missions. So we took the same aircraft, the fundamental architecture, lots of probably 80%-90% of the same components. And instead of batteries, we put a hydrogen fuel cell. But that could also be a gas turbine on the other side. And we demonstrated that that aircraft can do not the 100 mi of range that we've been talking about on the commercial side, but more than 550 mi of range.
So significantly longer distances with essentially the same underlying technology built on the same platform. And Joby is the only company to have shown that that's possible. And what that means, I think, is that we've got really great visibility. Sort of what I've joked about is like we were doing defense tech before it was hot because we've always known that the opportunity set isn't just the consumer side, but there's also going to be government customers that are important. And we've been delivering on that opportunity now for more than six years.
So you kind of I think it's H2FLY that did the acquisition that helped you do the hydrogen.
H2FLY, a company out of Germany that was developing aviation-grade hydrogen fuel cell systems. But as I said, what was important about that demonstration is to show that fundamentally, the aircraft that we're building can be repurposed in different variants to do other important mission types. Now, that's short-term important for government customers, but it's long-term important for the consumer market as well. Look, if we can take a battery electric network that we've built in and around a small city and then connect it, same infrastructure, same underlying aircraft, same underlying pilots on longer distance trips, so think San Francisco to L.A., that obviously is a big TAM extension without a lot of additional technical risk and with relatively minimal certification burden.
So look, over the long arc of the company, and I want to be clear, we are laser-focused on making sure that we get this core product out there. But I do think that we've got an opportunity to build what really is a sort of next-generation Boeing, an opportunity to kind of take core new aviation technology, certify it more quickly, and get it into market faster than the traditional sort of incumbents in the category.
I just wanted to maybe quickly touch on some of the other companies that you've bought along the way to help you with kind of the long haul into new avenues. I know Xwing was one that you kind of purchased. Could you talk a little bit about some of those strategic investments you've made?
Yeah. So Xwing's a good point. And it's sort of something that I didn't touch on in terms of the operating model. So when we were designing this aircraft, everyone asks, like, why do you need a pilot? Why don't you just go full autonomous? And the answer is that it's not really a technical problem, but it's frankly an air traffic control problem and also a customer acceptance problem. We're going to be asking people to get into something that looks very different than what they're used to. And to sort of do that also without a pilot may, I think, in our view, sort of be a step too far.
But we do think that over the long arc, there are important opportunities in a sort of step down from the highly trained pilots that we currently have in aircraft to first a highly trained operator, and then down the line to sort of taking the pilot out. And as Savi mentioned, we made an important acquisition of a company that is building a tech stack around autonomy. Now, our approach there is going to be very similar to what you've seen with H2FLY, the work in hydrogen hybrid, where we probably want to trial that work with defense customers on a no or low-cost basis before we essentially move that over to consumer market. That's sort of been our model when it comes to sort of new technology.
And that's the same approach that we're going to be taking vis-à-vis the work that Xwing is doing as we start to sort of integrate that into this aircraft versus more traditional ones.
Makes sense. And you mentioned kind of taking advantage of the battery charging infrastructure to kind of go these long distances. I do want to take a moment to talk a little bit about I think it was a couple of years ago that Joby made kind of specifications freely available to a universal charging interface that I think you've been working on for over 10 years. Could you talk a little bit about that standard and what's different about it? I know some of the others in the industry are kind of looking at a standard called CCS. And what are the advantages? And why did you kind of make Joby's technology kind of freely available?
Yeah. So look, I think it's consistent with the sort of strategy that we laid out. And consistent, I mean, you guys are investors. You know the sort of EV progression. It is one thing to sort of build the vehicle, but it's also important to build the complements in order to make that increasingly useful to end consumers over time. Look, there is a reason why Tesla in the early days had to go out there and build the Supercharger Network because they knew that was an enabler to create value for the core business. We've thought about this the exact same way. And our approach is certainly modeled on that, right? We want to make sure that we get out there with a sort of correct standard. We want to do the work initially to sort of site those chargers.
And we've already done some of that with government customers on one side. So it's not something that we don't know how to do. But then we want to make sure that that sort of proliferates over time. So the GEACS charging standard that Savi was referencing, that's an open-source standard that we're certainly very excited about. But it's going to take, obviously, some time for sort of things to cohere. And I think this is also the reason why being in a pole position is important for a new category. It's not just about the sort of earlier revenue opportunity, but it's also an ability to get out there early and set the infrastructure standards, set the charging standards, set the certification standards, set the pilot training standards. And if we're successful in doing that, we think that builds important competitive moats over the short, medium, and long.
I was actually talking to Savi last night. I mean, I'm sure you guys remember. Like the very early days of EV, there were lots of different companies that were out there. There was Tesla. There was Better Place. I don't know if you remember those guys. There was Fisker in a sort of earlier pre-two bankruptcy sort of iteration, and what distinguished the company that was the winner was not only the company that built the best technology, but that got it out there and began to scale it successfully, and we think the same dynamics are really going to play out here. It's about getting to certification. It's about getting to manufacturing scale. It's about getting to operational scale early.
And if we're successful in doing that, we think that builds even a bigger moat than you saw on the EV side of things because we've got this big knotty thing called FAA certification that I think gives us even more of a head start.
Got it. I've been dominating your time. I do want to give a chance for any audience questions if there are. One question over there.
Interesting perspective from you as opposed to some management. The pilots, I think I might have asked this before, how much additional training or what type of pilots do you look for? It's a different aircraft, but it has a lot of similarities, right?
So, repeat the question. Very good question. Sort of, sorry, repeat the question?
Yes.
Yes, so the question was around pilot training and pilot training requirements. Very big question that I would have been struggling to answer if we looked back six years ago, but we've been doing the work with the FAA to sort of set the pilot training requirement standards, and we recently, sort of in the past two, three years, sort of got that codified, so your point is very accurate. When you think about the operations of this aircraft, for 95% of its operating time, it's essentially like a fixed-wing aircraft, not a helicopter, and the control set is really simplified, so people talk about helicopter piloting as sort of the equivalent of jazz drumming and doing different things with your feet, different things with your hand, like it's extremely complicated, and the overall pilot workload is really high. We wanted to make sure that the workload was really low.
So it's a single inceptor, single throttle on one side, no pedals to speak of, and entirely fly-by-wire in terms of the core control. We actually learned a lot of important lessons from the F-35 development, which was a derivation of the earlier Harrier work that was done in VTOL. And one of the challenges that they had was the transition for the pilot between the vertical takeoff mode and the forward flight mode. So we took all of the learnings, totally cribbed it, frankly, to kind of make these operations and this sort of pilot control very similar. So getting to the core of your question, 2,000 hours fixed-wing time plus a training supplement for this aircraft. Not helicopter pilots, not V-22 pilots, vertical lift pilots. And that's going to be really important as we think about building out the pilot pool. That's going to exactly.
And then the cost, how do you think and how have you conceptualized costs for customers? I think I asked this before. I'm not sure how you come to your cost analysis. Cost for usage, for consumers.
So I think there's a sort of theoretical question of how do you help define value for the consumer. And to be quite honest, that's really difficult, right? I mean, even premium airline service, which some people think, "OK, that's the sort of analog." Look, it's a better seat, but it doesn't get you to where you're going faster. The fundamental value proposition is being able to save people time versus some transportation alternative. And there aren't a lot of examples of how you actually quantify that for sort of end consumers. But getting to your point, how do we think about cost in terms of the core business? Look, we want to be at Uber Black pricing at a per-seat mile basis to start with. And then we want to drive down to Uber X. And we are probably leaving surplus consumer value on the table, but that's OK.
Do you have thoughts of any of your partners subsidizing it early on so that the costs can remain low? So Delta, for example, if they're going through a Delta flight, do you get a better deal on that because you're going on a maybe Delta flight or Uber or?
I think there are lots of opportunities. What I'll say is this. There are lots of opportunities to build synergy and subsidy for end consumers, and that's both on the economic side and in the sort of surplus value that I was talking about. I mean, I'll be quite frank with this group. To me, the question is not going to be demand. The question is going to be, can we build enough aircraft to service that demand? Look, when we think about these markets, like getting from Manhattan to JFK in seven minutes versus an hour and a half on the ground, there is a lot of demand for that sort of opportunity at extremely high price points.
The question that we're going to have to deal with and the things that we've been focused on vis-à-vis Toyota and others is how do we scale production to both drive down unit cost and meet that large demand, not just here in the U.S., but globally.
In the last year, probably you know Elon Musk. What are his thoughts on EV, not necessarily just EV flight? I'm sure you've heard.
Well, what I think is true is that Elon believes that this sort of shift from two dimensions of transportation to three dimensions is important, right? I think that has informed his work on, say, Boring Company, which takes the opposite direction from the axis that we're sort of working on. Look, I think Tesla has a lot on their plate at current. So I don't think we're going to be in a sort of competitive position. And in fact, and people ask me this about autonomous vehicles and the rest of it, these feel like important complements to the aircraft and the service that we're delivering. Look, if you can get more seamlessly to your Joby flight on an autonomous vehicle, whether it's a Waymo or a Tesla autonomous fleet, that's actually a value add to the proposition that we're doing.
Because even if they can lower the pain of getting to where you want to go, they can't get you there faster, and that's the thing that we can uniquely offer.
This was a great line of questioning. I know we're a little over time here. So I appreciate everybody's attendance, and we'll have a breakout where you can continue this discussion in the Cordova Forum. Thank you, everyone. Thanks, Paul.