Toyota to invest $500 million in electric air taxi company Joby Aviation

Toyota Motor said Wednesday it will invest another $500 million in Joby Aviation to support certification and commercial production of Joby’s electric air taxi.

The Japanese automaker's new funding is on top of $394 million in prior investments it made in Joby and is part of a strategic alliance on commercial manufacturing. The investment will be in the form of cash for common stock, with the first tranche set to close later in 2024 and the second next year.

Electric vertical takeoff and landing aircraft (eVTOL) have been touted as the future of urban air mobility, though they face hurdles to win over regulators.

Joby said it continues to make progress towards commercialization and certification and recently broke ground on an expanded facility in California.

"We share Joby’s view that sustainable flight will be central to alleviating today’s persistent mobility challenges," said Toyota Motor North America CEO Ted Ogawa.

Toyota is already Joby's largest external shareholder, said Joby CEO JoeBen Bevirt in an interview. "This will further cement their incredible collaboration with Joby," he said. "Both companies are very committed to shaping this next generation of transportation as we move to the air for our daily transportation needs."

Toyota engineers are working side-by-side with the Joby team in California and last year the two companies signed a long-term agreement for Toyota to supply key powertrain and other components for Joby aircraft.

Automakers have taken interest in the sector.

Chrysler-parent Stellantis said in July it would invest an additional $55 million in Archer Aviation after making prior investment and equity purchases.

Airlines are looking at developing transport services using battery-powered aircraft that can take off and land vertically to ferry travellers to airports or on short trips between cities, allowing them to beat traffic.

In 2022, Delta Air Lines said it was investing $60 million in Joby for a 2 per cent equity stake, in a partnership that aims to initially offer passengers air taxi transport to and from airports in New York and Los Angeles. At the time, the goal was to launch service in 2024. Bevirt told Reuters Tuesday the company is "definitely targeting the next few years" for deployment.