TOYOTA CITY, Japan - Toyota Motor Corporation (NYSE:TM) and Joby Aviation , Inc. (NYSE:NYSE:JOBY), a developer of electric air taxis, have announced today that Toyota will invest an additional $500 million to support the certification and commercial production of Joby's electric air taxi. This move is part of the companies' shared vision of air mobility and will bring Toyota's total investment in Joby to $894 million.
The investment will be made in two equal tranches, with the first expected to close later this year and the second in 2025, subject to regulatory approvals and other conditions. The funds are designed to facilitate Joby's progress towards commercialization, as the company recently rolled out its third aircraft and began expanding its manufacturing capabilities in California.
JoeBen Bevirt, founder and CEO of Joby Aviation, emphasized the significance of Toyota's knowledge and support over the past seven years. Tetsuo "Ted" Ogawa, Operating Officer at Toyota, expressed excitement for Joby's certification process and the shift to commercial production.
Toyota's commitment to Joby reflects the founding family's long-standing dream of air mobility for personal travel, aligning with the company's broader transformation into a mobility company. Since 2019, Toyota has not only provided financial backing but also shared its manufacturing expertise to support Joby's development.
The companies have a history of collaboration, with Toyota engineers working alongside Joby's team and a long-term agreement in place for Toyota to supply key components for Joby's aircraft. The initial connection between the two entities was facilitated through an investment by Toyota Ventures, Toyota's venture capital arm.
The shares to be sold in the investment will not be available for public sale in the United States except under certain conditions, as per the Securities Act of 1933. This press release does not constitute an offer to sell these securities.
Based on a press release statement, this additional investment by Toyota underscores the growing interest in electric air mobility solutions as a sustainable alternative to traditional transportation and indicates a strong partnership aimed at bringing such innovative technologies to market.
In other recent news, dockworkers' strike at U.S. East Coast and Gulf Coast ports has posed a significant risk to European automakers, potentially disrupting their operations. The strike has halted around half of the nation's ocean shipping, with companies like BMW (ETR:BMWG) and Volvo (OTC:VLVLY) developing contingency plans in response. General Motors (NYSE:GM) and Ford (NYSE:F), which import parts, have also prepared for potential impacts. In other developments, top U.S. automakers, including General Motors and Ford, experienced a dip in Q3 sales due to economic strain and reduced selling days. Toyota also reported an 8% decline in sales, while Hyundai (OTC:HYMTF) saw a 5% rise in quarterly sales.
Toyota has reported a decrease in global production for the seventh consecutive month due to a typhoon, a certification scandal in Japan, and a production halt for two SUV models in the U.S. The company's production numbers fell to 709,571 vehicles in August, with domestic output in Japan experiencing a 22% reduction. In other recent developments, Japan's industrial production is expected to have declined in August, primarily due to reduced overseas demand and interruptions from Typhoon Shanshan. Toyota and semiconductor company Renesas were among the major factories affected.
Lastly, Toyota and its affiliate Toyota Industries (OTC:TYIDF) are facing a proposed class action lawsuit in the United States, filed by forklift purchasers. The lawsuit accuses Toyota of cheating on emissions tests for nine different engines used in its forklift trucks. The plaintiffs are seeking unspecified compensatory and punitive damages, as well as full refunds for the affected forklifts.
InvestingPro Insights
Toyota's substantial investment in Joby Aviation aligns with its strategic vision of transforming into a comprehensive mobility company. This move is particularly noteworthy given Toyota's current financial position and market performance.
According to InvestingPro data, Toyota boasts a market capitalization of $239.51 billion, reflecting its status as a major player in the global automotive industry. The company's P/E ratio of 7 suggests that it is trading at a relatively low earnings multiple, which could indicate potential undervaluation. This is further supported by an InvestingPro Tip highlighting that Toyota is "Trading at a low P/E ratio relative to near-term earnings growth."
Despite the significant investment in Joby Aviation, Toyota maintains a strong financial position. The company's revenue for the last twelve months stood at an impressive $288.35 billion, with a healthy revenue growth of 18.3% over the same period. This robust financial performance provides Toyota with the flexibility to make strategic investments in emerging technologies like electric air taxis.
It's worth noting that Toyota has a long-standing commitment to shareholder returns. An InvestingPro Tip reveals that the company "Has maintained dividend payments for 45 consecutive years," demonstrating its ability to balance growth investments with consistent shareholder rewards.
For investors seeking more comprehensive insights, InvestingPro offers 8 additional tips for Toyota Motor Corporation, providing a deeper understanding of the company's financial health and market position.
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