The latest on a stock I've been following with 'moonshot' potential; General Motors is stepping back from robotaxis; The brand-destroying debacle at Jaguar

1) If you've been following along with me in 2024, you'll recognize the name Joby Aviation (JOBY). I've written quite a bit about the air-taxi company here in my daily e-mails this year.

It's a highly innovative American company, so I'm rooting for it to succeed. And the stock has many characteristics of the "moonshots" I've written about previously (see my January 17 e-mail)... some of which have turned out well – like Tesla (TSLA) – and others, after soaring, crashed – like Virgin Galactic (SPCE) and iRobot (IRBT).

For context, here are links to four e-mails in which I've discussed Joby this year:

• Two potential moonshots (part 1) (January 18)
• Two potential moonshots (part 2) (January 19)
• Joby Aviation (JOBY) pitch (April 23)
• Joby Aviation just soared 28% on a big vote of confidence (October 3)

Additionally, for the first time I'm sharing the 20-slide presentation I gave in July at the Value Investing Seminar in Italy on Joby and catching moonshots – you can check it out right here.

Joby's stock has been on a wild ride this year...

It fell from around $6 per share in January to hover around $5 per share for a few months... before spiking in July... pulling back again... nearly doubling in November... and pulling back once again since then to close yesterday at $7.63 per share. Through yesterday's close, it's up 36% since my first mention of it this year on January 18.

In the chart below, you can see all the big moves:

While such volatility may scare away some investors, it's exactly what I've seen in the past with moonshot stocks.

In other words, it's a feature, not a bug – at least if you're going to play in this sandbox (and, to repeat what I've said many times previously: these types of stocks are highly speculative, aren't for most investors, and should be sized appropriately).

This October 30 article in the Wall Street Journal highlighted the risks: Electric Air Taxis Are Already Coming in for a Hard Landing. Excerpt:

Electric air taxis may not need a lot of runway to land, but they still need a lot of cash to take off.

Lilium, a startup that develops electric vertical takeoff and landing vehicles, or eVTOL, announced last week that its principal German subsidiaries will apply for self-administration proceedings, the rough equivalent of the U.S.'s Chapter 11 bankruptcy...

While the article mostly bashes Lilium, it also casts shade on the entire sector:

Wall Street analysts' lofty promises of a $1 trillion market for noiseless Jetsons-style air taxis that would rival Uber cars never held much water. Even if the technology itself lives up to the hype, it seems unlikely that the economics would work for trips under 80 miles, especially since there can hardly be enough helipads to service a dense network. The eVTOL use case is probably much smaller, centered on replacing the current $50 billion helicopter market...

Lilium's predicament is a good reminder of why startups selling a hypothetical product in a hypothetical market have long been the domain of private markets and governments. Air taxis still need faith, not rational market calculus, to levitate.

I think the WSJ article makes some fair points that both the technology (in fact, dozens of technologies that are required) in this space as well as the business model of the air-taxi market are unproven.

That said, I think it's great news for Joby, the market leader, that lousy copycat companies are falling to the wayside.

When trying to catch moonshots, it's a smart idea to invest in the market leader – just look at the examples I cited in my presentation on Tesla, Apple (AAPL), and Netflix (NFLX).

2) Speaking of Tesla, which has been promising full self-driving technology for years, it's interesting to see that legacy automaker General Motors (GM) is heading in the opposite direction. This WSJ article from earlier this week has more on the story: General Motors Scraps Cruise Robotaxi Program. Excerpt:

General Motors has scrapped its Cruise robotaxi program after nearly a decade and $10 billion in development, citing the time and costs needed to scale the business and rising competition.

GM on Tuesday said it plans to realign its autonomous driving strategy and give priority to development of advanced driver assistance systems, which take over steering and other functions in certain situations and are common on new vehicles today.

The automaker said it would continue to develop fully autonomous technology for personal vehicles, and build on the progress of its Super Cruise system, a hands-off, eyes-on driving feature that the company introduced several years ago.

The article also looks at the sector more broadly:

Waymo, owned by Google-parent Alphabet (GOOGL), is considered by many analysts to be furthest along in development, and as of October was logging about 100,000 rides a week in California and Phoenix. Tesla has said it plans to start producing its driverless Cybercab by 2027.

Major carmakers piled into the driverless-car space about a decade ago, in what was seen as a race with Silicon Valley to revolutionize the way people and goods move around. GM and others struck deals with upstart firms and set ambitious deadlines to commercialize the technology.

Companies struggled to perfect their autonomous systems though, and many missed their timelines to introduce driverless services. Accidents involving fully and partially automated cars, including a fatal collision involving a driverless Uber in 2018, also set back the industry's efforts.

Other traditional automakers have stepped back from their driverless-car pursuits, including Ford Motor, which shut down its autonomous venture in October 2022.

I'm excited by the developments in the sector, as technological advances are making driving safer and easier. But I've come to realize that we're still many years away from true autonomous (Level 5) cars that don't even need a steering wheel and can take passengers anywhere under any weather and road conditions.

3) I didn't think any company could damage a brand faster than beer-brewing giant Anheuser-Busch InBev (BUD) a year and a half ago with its misguided campaign for Bud Light using TikTok and Instagram star Dylan Mulvaney (see this article from last year in TheStreet: The Bud Light controversy and its impacts explained), but luxury-car brand Jaguar is vying for this title in the "Business Hall of Shame"...

This story has already been making the rounds in the media recently – here's the U.K.'s Daily Mail with more on it: Jaguar goes woke: Fury as car brand scraps its famous logo, goes electric-only and introduces chic ad campaign and says it's prepared to lose 85% of traditional customers. Excerpt:

Jaguar has infuriated car fans on social media with a radical new redesign that has been described as "woke" and "unhinged."

The car firm, which is almost 100 years old, unveiled a bold rebrand yesterday worked on by a team of 800 that has ditched most of its classic iconography, including the "growler" badge depicting a roaring big cat.

In an advertisement that featured precisely no cars and a techno music soundtrack, the firm said it would "create exuberant," "live vivid," "delete ordinary" and "break moulds" – but so far all it has done is stoke fury from its traditional audience.

The firm's managing director has admitted that those likely angered by the rebrand are no longer the target market – as it seeks to attract a new, younger audience with an all-electric range of brand new models.

From the same article, here's a screenshot of one of Jaguar's ads:

Here's a link to the 30-second promo video (which has 3.3 million views), in which there are no cars.

And here's what Jaguar did to that classic "growler" logo...

It was this:

And it's now this:

Jaguar is defiant – this article in the U.K.'s Telegraph has more details: Jaguar boss says criticism of new advert is 'vile hatred and intolerance'. Excerpt:

The boss of Jaguar has defended the carmaker's controversial rebrand and said criticism of its marketing campaign had featured "vile hatred and intolerance".

Rawdon Glover, the managing director of Jaguar, said the campaign message had been lost in "a blaze of intolerance," adding that the carmaker must move away from "traditional automotive stereotypes."

It comes after Jaguar ditched its historic "growler" cat logo and released an advert featuring models with asymmetrical haircuts and dressed in brightly-coloured clothing. It also includes the phrases "break moulds" and "create exuberant."

Mr. Glover told the Financial Times: "We need to re-establish our brand and at a completely different price point so we need to act differently.

"If we play in the same way that everybody else does, we'll just get drowned out. So we shouldn't turn up like an auto brand."

Even the late-night comedians have been mocking Jaguar – here's Stephen Colbert with a hilarious riff.

This change is so dumb that I'm wondering if Jaguar will end up announcing that it was a stunt to get a lot of free media attention.

Assuming this isn't a prank, I hope this becomes a case study taught at business schools on what not to do when an established brand launches a new product...

Best regards,

Whitney

P.S. I welcome your feedback – send me an e-mail by clicking here.