Joby Aviation Inc
NYSE:JOBY
Earnings Call Analysis
Q4-2023 Analysis
Joby Aviation Inc
The company has continued advancing towards certification, completing notable pathfinder tests across electronic components and aircraft structure in Q4 2023. They achieved a significant milestone by completing Stage 3 of the FAA certification, with optimism to complete hundreds of credit tests in the current year. The team has been proactive in hands-on preparations with the FAA for system level and aircraft level tests, which is critical for the certification of the new eVTOL aircraft.
The company is establishing itself as a leader in the emerging eVTOL market through landmark international agreements, like the definitive deal to introduce air taxi services in Dubai, and partnerships in Japan, South Korea, and the U.S.. These partnerships are instrumental for early operations and showcase the company's ability to address regulatory, infrastructure, and aircraft readiness globally.
The company ended 2023 with a strong liquidity position, having over $1 billion in cash and short-term investments. Despite a net loss of $115 million in Q4 2023, the company's financial strategy is disciplined, focused on controlled staffing growth, certification activities, and a burgeoning manufacturing footprint. They recognized their first revenue in Q4 2023, reflecting their operations and progress towards commercial viability.
The company plans to increase spending on certification, manufacturing, and market entry, expecting to use cash, equivalents, and investments within the range of $440 million to $470 million. This includes expansion at the Marina facility in California and scaling up operations in Dayton, Ohio. The increase in capital expenditures will be geared towards both initial production and achieving their certification milestones.
By the end of 2024, the company expects to be building at the rate of one eVTOL aircraft per month, with an aim to double its annual production capacity at the Marina site, potentially scaling up to 25 planes per year to support its early market operations. The company is deliberate in its approach to scale production responsibly, to ensure a smooth and steady entry into the commercial market.
The company is confident in the design and performance of its eVTOL aircraft, which does not anticipate any notable design changes. Flight control systems, including fly-by-wire, have been thoroughly validated, reflecting their readiness for the latter stages of FAA certification. This confidence is bolstered by their longevity in testing multiple generations of eVTOL aircraft, and the performance meets their stringent requirements.
While the company has not specified an exact timeline within the year 2025 for the start of its commercial operations, they are working closely with regulatory partners such as the GCA in Dubai to ensure expedient progress. The company constructs its operational plans with flexibility to adapt to regulatory developments and is committed to executing on its targets for commercial launch.
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Greetings and welcome to Joby Aviation's Fourth Quarter 2023 Conference Call and Webcast. [Operator Instructions]. As a reminder, this conference is being recorded.
It is now my pleasure to introduce your host, Teresa Thuruthiyil.
Thank you. Hi, everyone and welcome to Joby Aviation's Fourth Quarter Fiscal Year 2023 financial results conference call. My name is Teresa Thuruthiyil, and I'm Joby's Head of Investor Relations.
On the call today, we have JoeBen Bevirt, Founder and Chief Executive officer; Paul Sciarra, Executive Chairman, Didier Papadopoulos, President of Aircraft OEM; and Matt Field, Chief Financial Officer. After management's prepared remarks, we will open the call for questions.
Please note that our discussion today will include statements regarding future events and financial performance, as well as statements of belief, expectation and intent. These forward-looking statements are based on management's current expectations and involve risks and uncertainties that could cause actual results to differ materially from those expressed or implied. For a more detailed discussion of these risks and uncertainties, please refer to our filings with the SEC and the safe harbor disclaimer contained in today's shareholder letter. The forward-looking statements included in this call are made only as of the date of this call, and the company does not assume any obligation to update or revise them.
Also, during the call, we will refer to GAAP and non-GAAP financial measures. The reconciliation of non-GAAP to GAAP measures is included in our Q4, 2023 shareholder letter, which you can find on our Investor Relations website, along with the replay of this call.
And with all of that said, I'll now turn the call over to JoeBen.
Thank you, Teresa and thank you everyone for joining us today for our fourth quarter call. We entered 2023 knowing it would be a pivotal and exciting year for us, and it did not disappoint. Over the first 3 quarters, we launched production and delivered the first eVTOL aircraft to US Air Force, ahead of schedule. We started testing with a pilot onboard and have now completed more than 100 inhabited flights. We expanded our partnership with SK Telecom, we deepened our partnership with Toyota, and we announced a range of new partnerships for infrastructure development.
We strengthened our already strong balance sheet, we expanded our contract with the DoD. We selected a site for manufacturing in Ohio and released our first ESG report. Perhaps most importantly, we made critical progress on certification, effectively completing the second stage in February of last year. And as we announced this morning, we have now become the first eVTOL company to complete the third stage.
We delivered on all the goals we set ourselves for 2023 and ended the year continuing to lead our industry on the path to commercialization. These accomplishments are tangible proof of what makes Joby special, and they kept us moving steadily towards our goal of launching commercial passenger operations in 2025.
During the fourth quarter, the team maintained incredible momentum as we crossed into this calendar year. A real highlight for me was welcoming a team of senior leaders from the FAA to Marina in January. This visit gave us an opportunity to demonstrate firsthand the maturity of our designs and our production processes, as we discussed our certification program with them in detail. This level of positive engagement and collaboration is encouraging and will help to ensure continued US leadership in this new sector.
In November, we were honored to demonstrate this leadership by completing the first eVTOL flight in New York City. This was a seminal moment for our company, seeing a Joby aircraft lift off from a Manhattan heliport and complete a flight against the backdrop of the New York City skyline was quite literally a dream come true for me, and it moved the needle, in front of the local community, Mayor Adams and key stakeholders, we were able to demonstrate the incredibly quiet acoustic footprint of our aircraft and the opportunity presented by our technology to improve city mobility.
Seeing really is believing, and I'm so proud of the team that was able to make this happen. It's just another example of the tangible, real life progress we're able to demonstrate at Joby day in and day out. Our flight was followed by a commitment from the city to electrify the site and bring air taxis to one of the most iconic heliports in the world.
A few weeks before that flight, we were pleased to welcome Delta CEO, Ed Bastian and representatives from the Economic Development Corporation of New York and the Port Authority of New York and New Jersey to a community event in Brooklyn where we highlighted our shared ambition to deliver air taxi service in New York. We continue to work closely together to realize opportunities at Delta's hubs at JFK, LaGuardia and LAX. And over the last few weeks, we've announced key partnerships in the New York City region to support the installation of charging infrastructure.
We've also announced partnerships with Clay Lacy to support the development of our LA network with Nomura, to support our Tokyo network, and most recently with Skyports, to build infrastructure in Dubai. Working with these partners, we plan to install our Global Electric Aviation Charging System, or GEACS, the first charging system designed specifically for aviation, which supports the safe and efficient operation of all electric aircraft under development today. In November, we released the specification of GEACS to the industry to accelerate the commercialization of emissions-free aviation technology. But the most significant commercial development of the quarter came in December when we signed an agreement with the Government of Dubai to launch an air taxi service in the Emirate. Announced last week at the opening of the World Government Summit, this is a landmark agreement that delivers on all 3 ingredients required for the successful launch of an air taxi service in any market.
A definitive path to operations, well-placed infrastructure supported by dedicated partners, and an aircraft with the capacity and range to deliver meaningful customer journeys. The agreement grants Joby exclusive rights to operate air taxis in the Emirate for 6 years and includes financial support for initial operations. The Government of Dubai wants this service to be the first in the world and their actions certainly reflect that ambition. With support from the very highest levels of government and a regulatory pathway that builds on FAA processes, but allows for operations ahead of achieving type certification in the US.
This is a remarkable opportunity for any eVTOL operator, and we're proud to have demonstrated to the government of Dubai that Joby is the best positioned to deliver this service. It's a definitive, tangible partnership that provides another path to delivering on our goal of starting commercial passenger service in 2025. That commitment to delivering real progress and results is exactly what we will continue to do this year. In fact, we've already started. Last month, we received our Part 145 Repair Station Certificate from the FAA. This approval lays the foundation for us to carry out maintenance, repair and overhaul services for our future fleet, which is a core part of our vertically integrated approach to commercial operations.
And just this morning, we announced that we have become the first eVTOL company to complete Stage 3 of the FAA certification process, an incredible milestone that Didier will speak more about in a moment. With the first 3 stages behind us, this year, we expect to make steady progress on Stage 4, as we expand our 4 credit testing across more and more of the aircraft.
In addition to continuing our leadership position on certification, we expect to achieve a number of milestones this year. We expect to reach a production run rate equivalent to one aircraft a month by the end of the year, as we continue to ramp production in support of certification and commercialization. We plan to break ground on our expansion in Marina and begin component manufacturing in Dayton. We will commit at least 2 more aircraft to the Department of Defense as part of our existing contract.
And finally, building on the excitement we brought to New York City in November, we plan to extend our flight exhibition series to additional key markets. We believe these are the right milestones to ensure Joby's continued leadership in the sector. While we aren't blind to the challenges ahead of us, we believe that we are best positioned to succeed with the strongest balance sheet, the best team in the industry and most important, a laser focus on delivering. Thank you for your continued support. And over to Didier to discuss our progress in more detail.
Thanks, JoeBen. I'd like to add my own appreciation for the Joby team and everything they've achieved over the last 12 months. It's been a remarkable period and one that's been central to keeping us on track to launch commercial service in 2025. 2023 was an incredible year for Joby, and this year, we are already off to a strong start with the news we shared this morning that we are now the first eVTOL company to complete the third stage of the FAA certification process. This is the result of years of hard work. And in 2023 alone, we had nearly 3,000 pages of cert documents accepted by the FAA. This is truly an incredible milestone, and I want to take a moment to underscore what it means. Across every part of our aircraft program, we can confidently proceed into submitting test plans and conducting 4 credit tests in Stage 4. That includes the path it will take to certify all of the structural, mechanical and electrical systems of our aircraft and the program-wide approach to software, cybersecurity, noise and human factors. From the carbon fiber composites to the Metallics, the flight electronics to the control systems, the batteries to the electric propulsion systems, and much more, we now have a well-defined path to certification.
I've been part of many aviation certification programs, and this is truly an incredible milestone for us. We continue to lead the industry towards certification because of so much hard work by the Joby team, our partners, and by the dedicated FAA staff who have worked closely with us for many years to reach this point.
Now our focus is fully on Stage 4, where we continue to ramp up our FAA for credit testing efforts. Last quarter, we completed 34 credit pathfinder tests, 24 of these tests covered 4 electronic components, each from a different functional area on the Joby aircraft. The other 6 were related to our materials and processes, the building blocks for our aircraft structure. Through these pathfinder tests, we're validating our approach to testing across each area of the aircraft, ensuring our testing methods are accurate and efficient before rolling them out more widely. Those 30 tests completed in Q4 put us in a great position to complete hundreds of our credit tests across our structural materials and flight electronics over the course of this year.
We're also beginning to move up the pyramid to larger structures and systems with the acceptance this past quarter of our test plan for the tail static load tests. We're now building our first FAA conforming test structure to begin FAA for credit testing. We will continue to see this progress stack up each quarter as we put more and more points on the board with the FAA. What you won't see reflected in our progress chart is all of the work the team is doing, working directly with the FAA to progressively prepare us for success at the top levels of the aircraft pyramid, testing at the integrated system level and at the aircraft level.
Last year, a lot of our interactions with the FAA was getting their hands on documentation such as cert plans and system reviews. This year is progressively more about FAA hands on the actual aircraft systems. With all of our aircraft certification plans accepted, we're able to map out dozens of upcoming visits with the FAA, focus on dry running our system level and aircraft level tests. This is the heart of the certification process, it's about Joby and the FAA working together at our simulators, in our Integrated test lab and at our many other test facilities to practice and perfect our testing approach, in advance of our credit testing. So that when we're ready to do it for credit, we already know we're going to get perfect marks.
Our government partnership also played a key role in these early tests. This week, our team at Edwards Air Force Base is working with the Air Force and the Navy to conduct High Intensity Radiated Field or HIRF testing on the entire aircraft. HIRF testing is a key part of any aircraft certification program. It verifies the onboard electronics equipments, can withstand the levels of electromagnetic interference they are expected to encounter while in operation. We run HIRF tests routinely at our facility in San Carlos at the component level, but we will also be required to carry out HIRF testing on the full aircraft as part of certification, and that's exactly what we are validating right now at Edwards.
This test is an example of the incredible access to facilities and expertise that we gain through our partnership with the government. Similar to the acoustics testing we conducted with NASA in 2021 and the wind tunnel testing we completed last year at the National Full-Scale Aerodynamic Complex. It's also a great illustration of how our work with the DoD can accelerate the certification process, helping us to prepare to do this test for FAA credit down the line. And this is exactly the type of testing that will support the landmark deal we announced last week with the government of Dubai to launch the world's first air taxi network in a premier global city. The regulatory framework we have agreed to with the Dubai General Civil Aviation Authority builds up on FAA standards, using much of the data that we're submitting to the FAA for review, but with a more expedient path to market. Will accomplish this by using testing and analysis that we were already planning on completing as part of the FAA certification process, alongside a high level of regulator oversight and an ongoing review process to ensure safety for early operations.
In other words, it builds on existing work to get us to market sooner and allows us to learn along the way. It's a win-win situation that doesn't add significant additional certification burden to our team. As well as progress on certification, we've been hard at work preparing for future operations from our exhibition flights in New York City to completing a series of precision landing tests with the FAA. This test campaign was a sight to behold. The team flew 31 times in just 2 days with 3 different pilots on board to demonstrate the precise handling qualities of our aircraft. This showcase of our aircraft performance was critical in demonstrating to the FAA that we have the same infrastructure requirements as similarly sized helicopters. This confirms what we already knew that we will be able to use existing infrastructure, such as the Downtown Manhattan Heliport and our partner HHI's Heliport just across the Hudson River in Kearny, New Jersey.
Additionally, the data we shared with the FAA through this testing will help inform the design guidance they are finalizing for future Vertiports, one of the many areas where Joby is not just leading, but defining the industry. Another area where we're defining the industry is understanding how to integrate an air taxi service into the airspace around major cities and airports. Just before the end of the year, we announced the completion of a series of airspace simulations, with NASA, focusing on the complex airspace near Dallas-Fort Worth, with real pilots and air traffic controllers playing their role, the Joby NASA teams simulated scenarios with dozens of Joby aircraft aloft at the same time alongside existing airport traffic. During the simulation, air traffic controllers were able to integrate up to 120 EV eVTOL operations per hour, arrivals and departures from DFW's Airport Central Terminal Area. This seminal exercise demonstrated that we're able to operate air taxi services in some of the busiest airspace, using the tools available to air traffic controllers today. This is a remarkable proof point, as we prepare for operations in markets around the world. And this future begins on our manufacturing lines. I personally get so much energy from spending time in Marino and San Carlos where you can really see production ramping up every week. Last year, we built hundreds of flight electronics units and thousands of composite parts. We now have one aircraft in final assembly and 2 more aircraft being assembled right behind it. The team is cranking out parts for numerous aircraft to follow and to support company and for credit testing. By the end of the year, we will be building at a run rate equivalent to an aircraft a month. And as we expand in Marino and bring online facilities in Dayton, Ohio, our production rate will continue to accelerate to support commercial service.
We now have 4 FAA conforming assembly lines and plan to open 4 more over the course of 2024, laying the groundwork for expansion of our 4 credit testing and receiving our production certificate soon after our type certification.
Finally, I want to take a moment to emphasize the importance of the GEACS charging interface, our team has developed. This technology has been more than a decade in the making. The Joby team has built and flown multiple generations of eVTOL aircraft, logging over 30,000 miles that include vertical takeoffs and landings. We've learned just how important it is to have the right charging and thermal conditioning systems in place to support rapid operations and maximize battery life.
We took on the hard challenge of designing and building the first ever charging system that actively caused the vehicle's batteries, resulting in a dramatically more performance aircraft and higher tempo operations than achievable with an off-the-shelf EV charger. In November, we shared the specifications of the GEACS with the industry to move all of us closer to a world where quiet, clean aircraft are commonplace. And we're actively working with a number of electric aircraft developers to ensure that charges we plan to install with our partners around the globe will work for everyone. We have a lot of hard work ahead of us on certification, on manufacturing and on preparing for commercial operation. But we have the best team and the right strategic approach and we will continue to deliver as we always have.
On that note, I'll hand it off to Matt to discuss our financial results.
Thanks, Didier, and good afternoon, everyone. We ended 2023 with cash and short-term investments totaling slightly over $1 billion, with the strongest balance sheet in the industry, we are able to support our leading position in certification and manufacturing, while at the same time, capitalizing on the opportunities that JoeBen and Didier highlighted, expanding our capacity, broadening our base of operations with the Department of Defense, and investing in the early stages of commercialization.
Looking back at the fourth quarter of 2023, we incurred a net loss of $115 million, reflecting a loss from operations of $128 million, offset by interest and other income of $13 million. Our net loss compares to a net income in the third quarter, with the difference explained by the non-recurrence of the favorable revaluation of our warrants and earnout shares. Our operating expenses were largely flat over the quarter, reflecting higher spending on staffing and certification activities, offset by a lower accrual for stock-based compensation compared with the prior quarter.
In the fourth quarter, we recognized our first revenue as a company, totaling $1 million. This revenue represents consideration received for providing early government directed flight operations conducted in Marina, California, with our prototype aircraft. The associated costs are called out in our operating expenses under flight services, which represent the direct costs associated with supporting these flights. We've defined this revenue and costs as providing flight services to differentiate it from our long-term air taxi service model, which we expect will look very different.
For example, since we are utilizing a prototype aircraft for these operations, we are not including the aircraft cost in our figures, nor do we have other expected costs like landing fees that would eventually be part of the more traditional revenue and cost of goods sold approach.
Adjusted EBITDA, a non-GAAP metric that we reconcile to our net income in our shareholder letter was a loss of $96 million in the fourth quarter. This was about $3 million higher than the prior quarter, reflecting increased staffing and cost to support certification as mentioned earlier. Our adjusted EBITDA loss was just under $19 million higher than in the same period last year, reflecting the growth in our organization and expenses to support manufacturing and certification. Our global staffing with more than 1,700 employees continues to grow at a measured pace, as we bring on resources in a deliberate and pragmatic way to support our initiatives at just the right time with most of our staff supporting our company's certification and manufacturing efforts.
In the fourth quarter of 2023, our cash used in operations and spending on property, plant and equipment totaled $91 million. For the full year, this totaled $344 million, which was below our anticipated spending range, reflecting timing of payments and disciplined choices around our spending in the fourth quarter. As mentioned at the outset, we ended the year with $1 billion in cash and short-term marketable securities.
As we look to the year ahead, we are excited by the significant opportunities that JoeBen and Didier highlighted, as we continue to garner support for bringing quiet emissions-free fleet to market and to execute certification and manufacturing milestones.
Turning to our outlook for 2024. First, on the top line. While we are not providing detailed revenue guidance for next year, it is important to understand the breadth of our flight programs in 2024. Our revenue this year will be driven by on base government directed flights that are part of the contract that we signed with the Department Defense in April of last year. We will also fly aircraft on base and in Marina as part of our internal certification and testing programs. We do expect to receive payments from the US government for some portion of these flights, as we have in the past, which we account for as contra R&D expense along with other R&D related deliverables.
With one Joby aircraft currently at Edwards and a second expected to be delivered this year, our government directed flights will show up as revenue similarly to what we recorded in Q4. However, the agreed payment for our earliest directed flight operations, which we completed last year, were higher than what we will record for on base operations, which reflects the progressive maturity of the aircraft and our operations.
Consequently, our fourth quarter 2023 revenue should not be presumed to be annualized into this year. Additionally, our on base flight hours are expected to be lumpy as we find the right cadence with the Department of Defense with our first on-base operations. For example, our aircraft at Edwards has been undergoing testing in the first quarter, as Didier described earlier. So we do not expect meaningful revenue in this quarter.
In total for the year, the overall impact to our cash from our first on base operations is expected to be negligible, which is consistent with our plan. As we have explained in the past, the more timely benefits we expect to gain from this early engagement include operational learnings, which will pay dividends into the future as we build both our government and commercial service businesses and the opportunity to showcase our aircraft's features and capabilities to a broad array of potential future government customers.
From a spending perspective, we expect growth in our certification manufacturing and go-to-market activities to result in the use of cash, cash equivalents and short-term investments of approximately $440 million to $470 million. This increase, compared with 2023, includes continued staffing growth and the production of additional aircraft and parts, as Didier discussed earlier. We also plan to expand our manufacturing facility in Marina, California, breaking ground on a building that more than doubles our footprint in Marina to support flight training, aircraft storage and expanded manufacturing processes.
This is expected to provide sufficient space to more than double our annual production capacity at this site, giving us the option to scale up to 25 planes per year to support early market operations, while we bring up our Ohio facility. I'd like to thank the State of California who approved a $9.8 million CalCompetes grant in November and thank our local community partners who supported our application. This grant will offset a substantial portion of the building cost.
As we discussed last quarter, we are planning to add manufacturing capacity in Dayton, Ohio, the birthplace of aviation. We have agreed to the location for our initial manufacturing operations and are days away from closing on the facility purchase. After interior improvements and the installation of machining equipment, this facility will start building parts to support production and aircraft assembly in California. We are grateful to our state and local partners in Dayton, Ohio for their support with incentives totaling up to $325 million, a portion of these incentives will offset much of our planned investments at this first site starting this year.
With these investments, you can expect our capital expenditure to increase significantly relative to the $31 million we spent in 2023, as we build out our facilities to support aircraft production. This strategy of supporting initial production and certification from our San Carlos and Marina facilities and a stepwise systematic scaling in Dayton reflects our rational, measured approach to manufacturing and spending. It gives us optimal flexibility to incorporate learnings from the production floor, what we proceed through the certification process. It also demonstrates the maturity of the organization to prevent overcommitting investments and resources, when we certify, build and commercialize this new form of transportation.
In summary, 2023 was a year of notable achievements from progressing certification. The rollout of our first production aircraft, first flights for the pilot on board, first urban exhibition flight in New York City, the delivery of our first aircraft to a customer and our first revenue, and 2024 is off to a fast start, as you've heard both on the certification front, with the completion of Stage 3 of our certification process and the signing of a definitive agreement to launch exclusive air taxi services in Dubai. We are excited by the year ahead and the opportunities we see as we continue to lead our industry towards commercialization of this revolutionary technology.
This concludes our prepared remarks. Operator, would you please instruct participants on how to ask questions.
[Operator Instructions]. Our first question comes from the line of Andres Sheppard with Cantor Fitzgerald.
Congratulations on another quarter and all of the developments. I guess first question, I was hoping if you can expand a little bit further on the announcement to launch the air taxi in the UAE, and particularly the exclusivity behind it. Does this essentially prevent some of your peers to enter this market at all? And whether it's the right hearing or a direct sales model. Just trying to better understand that?
This is JoeBen and thank you for the question. It was incredibly exciting to be in Dubai, and to get to sign the definitive agreement for our air taxi service there. This is a seminal agreement, it's something we've been working with the Roads and Transport Authority of Dubai for many years now and getting this across the line in a definitive way and including the 6-year exclusivity that you mentioned is a huge moment for the industry and a huge accomplishment for Joby, and for the RTA.
And with regard to the exclusivity, again, we have a 6-year exclusive to operate the air taxi service in the Emirate. And so we're very excited about this. We're excited to be working on this with the RTA, with our partner on infrastructure and Skyports. And to really showcase the bringing together the 3 critical pieces that Dubai and the UAE have done, which is the regulatory, the infrastructure and the right aircraft to deliver meaningful value to customers. So, again, really, really pleased with this and grateful for all of our partners and the support here.
Thanks, JoeBen that's very helpful. And maybe just as a quick follow-up. So congratulations on completing the third stage of the FAA type certification process. Obviously, very exciting. Just wondering, can you give us maybe some color? What does the timeline for the fourth step looks like? Particularly, yes, you are not going to be doing the 4 FAA credit testing. Just trying to get a sense of what that timeline looks like. What are some of the different milestones that we can look forward to just to identify how that is progressing?
Hey, Andres, this is Didier. Good to hear from you. It's good question. I feel like this is a good time to talk a bit about what FAA conformity and FAA for credit testing really is. The FAA really sets the standards and defines exactly what that is at the component level, at the system level, and at the aircraft level, which is really how you have to progress towards your certification and Stage 4 organization. I'm really excited about what the team has been able to deliver last year with 30 tests completed at the component level, having gone through exactly the process as outlined by the FAA. It sets us very well this year to expand across all of the base of the pyramid and execute more of those on hundreds of other tests. And then progressing from there into the system, just as we just discussed, we will be starting with the tail system here. Really excited about that. And then moving into the airplane, maybe a quick pass on that also, there are 3 essential elements that define what it takes, one, to get an FAA conformity and to be able to also get credit for the testing from the FAA. One, you have to have the design matured and released to the FAA because this is what they're going to use as the basis for you showing compliance. And I feel we've demonstrated that really well last year, particularly with those component level tests and are working towards that this year, the beginning of this year with the tail test.
Two, you have to demonstrate the ability to build or manufacture to these designs on conforming lines. And we've done just that last year with 4 conforming lines now completed and our working expediency on adding additional conforming lines that fit into the airplane. So another check and a big win for the team on that one. And 3, possibly most importantly, to do a for credit test and for credit conformity on any area in the aircraft, you have to have gone through Stages 1, Stages 2, Stage 3, and then 4 for that specific test [indiscernible]. If you have not done that, there's no point in having that discussion with the FAA. And with the team now at the point where we close on all our Stage 3 and are working and submitting testimonials on Stage 4 is exactly where we want to be and really excited about really this year is what you're going to see all the progress and focus on that stage.
Thanks, Didier, that's very comprehensive. I appreciate it. And congratulations again on the quarter.
Thank you. Our next question comes from the line of Kristine Liwag with Morgan Stanley.
Congratulations also on completing the third of the 5 stages of the FAA type certification process, and being the first developer of EV tool to accomplish this. So maybe one follow-up question from the question you already asked on the Stage 4 and Stage 5 certification, as we look forward. Didier, is there anything that would surprise you on the Stage 4 and Stage 5? And the reason for that is, look, Gulfstream right now is in its third year of the Stage 4 and 5 certification for the G700, especially with the change in the requirement where they need a line by line validation of the software for the fly-by-wire that's been an obstacle. Is there any read across here for you and how confident are you guys in the 2025 entry into service?
Yes, thanks, Kristine. Appreciate the question here. Look, I feel really good about where we are right now, particularly because, you talked about years. This has been multiple years in the making, getting to the point where Stage 3 is complete. We have been in lockstep with the FAA for a good amount of time where we're talking about all the details of the design of the airplane and the implementation. And I think that gives me a lot of confidence in us moving into Stage 4, being in a very good position. You talked about fly-by-wire by way of example. One of the most critical and important areas of our plans is exactly our flight controls and the fly-by-wire, and we have spent quite a bit of time with the FAA on that. Relating to software, I really want to remind and reiterate, software is not software verification, particularly is not new to Joby. Our Avionics acquisition team that's in Costa Rica has been doing this for many, many, many years and they have demonstrated over the past few years that they can deliver on all expectations, both for Joby and external customers. And so I feel like we're well-positioned to walk through the software line. And oh, by the way, our software [indiscernible] has also been accepted. So we hit it both on the software side as well as on the functional side.
Great. And then also, if you look at the past few years, you guys have done a lot of partnerships with different countries, including your most recent exclusive deal. But then you've also got partnerships in South Korea and Japan. Can you guys talk about a little bit more? Why does this seem to be more attention on eVTOL across the different countries? And as you see these exclusive partnerships with one country, could you see more of these rollout, especially as you get closer to certification?
Yes, thanks, Kristine. So thank you for highlighting the incredible interest that we have from many international markets. I think we're continuing to see significant inbound here, but we're going to be very thoughtful and measured in the number of additional markets that we take on and really focus as much as we can on the incredible opportunities that we have already committed to. And we are very, very grateful to our partners, as you mentioned, in Japan and Korea, in the UAE. And then, of course, our incredible partnerships here in the US. We may choose a select number of additional international markets, but again, we're going to really focus on the execution.
Great. And if I could squeeze one last question. Matt, the $440 million to $470 million free cash flow usage for 2024. At the end of that, what would be the capacity on your low volume manufacturing plant in Marina after that spend? And if you wanted to expand capacity beyond what you have in place, how much could that incrementally cost?
Yes, Hi, Kristine. So the way we think about the Marina, it's as Didier mentioned, the end of this year will be running at a rate of one aircraft per month. So that would be 12 aircraft, obviously, in terms of capacity. We're working on ramping that up over time as our expansion comes on stream. That expansion would be online somewhere in 2025, most likely based off our present calculations. And that gives us the option to ramp up to 2025. So we feel that's a good starting point as we lay the groundwork for our international and domestic operations for go-to-market and then obviously working on further expansions from there.
Thank you. Our next question comes from the line of Savi Syth with Raymond James.
If I may just ask another certification question here. Just we haven't heard much on the G1 side. And in terms of, when do you think the FAA might accept that? And just a clarification on, based on the Didier comments. So are there items in the Stage 3 certification plans that are still placeholders or dependent on issue papers that are not yet finalized?
Yes, good question. So and we love certification questions, by the way. So we've been in constant touch with the FAA relating to the G-1. Our understanding is the G-1 release is coming up soon. But what's really important is that the FAA has, and we're really grateful for that has been keeping us up to date on all the expected changes in the G-1. And so we've been in constant touch and are aware of the content in there. And what we can say from there is that we expect zero design changes to our aircraft based on the G-1 changes coming. Feel really, really confident about that, based on what we've been able to see, that's really important.
The potential area where there may be some applications are really associated with the documentation rework, and the compliance aspect of that. But none of these is expected to impact us, particularly this year, as we're focusing again on Stage 4. So we're focused on Stage 4. We know there are no design changes and then we're ready to go when the G-1 shows up.
Got it. And then just you also had some really helpful information on the number of for credit testing that's been done. Just could you put that in context of how many tests? I think Didier, you mentioned hundreds of tests this year, just trying to put that 30 into context of kind of what needs to get done?
We haven't really shared the exact numbers of this. I think the more important part of this is the relevance of the tests that we talked about is they were pathfinders for additional tests, those additional tests that are coming. So it's really about we built the knowledge base. We know what the process of conforming parts, we know what the process of submitting test plans and getting those test plans accepted or and we know how to execute on these. The rest as it relates to component is really about now accelerating so we can move through this faster than we did last year.
Thank you. Our next question comes from the line of Austin Moeller with Canaccord Genuity.
Just my first question here. How do you currently feel in partnership with Toyota about the scalability and the manufacturability of the pouch cells as you ramp-up production?
Thanks, Austin. We feel very good about what we've been able to accomplish, both from most importantly from a safety standpoint, but also from a cycle life standpoint on, and performance standpoint on our battery modules. We've done extensive testing over many years and just incredibly pleased with the performance across all of these dimensions.
Great. And just a follow-up. You mentioned you don't expect any major design changes on the current iteration of the aircraft. And I understand the last quarter you've done 30 plus for credit component level task, but do you expect that the current iteration of the aircraft has a sufficient weight to really make sure that it can be certified under that powered with certification?
Yes, so the G-1 and the associated cert basis, as we have seen it with the FAA continues to be something we feel very confident about. Like I said, we've seen all the -- expect the changes coming, at least the ones that the FAA has shared with us, which we understand our comprehensive and we don't see any impact on our design as it relates to the eVTOL configuration and the power lift requirements.
Thank you. Our next question comes from the line of Bill Peterson with JPMorgan.
Nice job on the quarterly execution. I'd like to try to get a little more granular on the commercial operations. I guess, 2025 is pretty wide, when are you thinking closer to the start of the year or the end of the year? And I guess what would make it closer to the start versus the end? I.e., what's in your control, what's not, what's dependent on the FAA or others. And I guess, with that in mind, with that you said earlier, I think, that would be maybe lead you to starting to buy out of the US, Is that what it could look like?
Yes, thank you. So we are very pleased as we talked about with the partnership in Dubai. And again, that's across the 3 critical dimensions. First, the regulatory; second, the infrastructure; and third, having the right aircraft. On specifically on your question, in terms of the timing, that a lot of that comes down to the regulatory piece and the approach that we're taking is leveraging all the incredible work that we've done with the FAA and working closely with the GCA to ensure that all of the work there happens in an expedient way. And so, again, we're grateful for the partnership with the GCA and they're working very closely with our team and we'll continue to, over the months to come. With respect to specific timing, within 2025, we're not providing that at this time.
Okay. And just want to follow-up on earlier question on run rate. So you exit this year at 12 in 2025 after the expansion, you'll be somewhere between 12 and 25, maybe exiting next year with the ability to make 25 aircraft. I guess how should we think about the run rate in maybe what is Dayton ready to ramp? Just trying to get a sense for, as we try to build our models out a few years, what I guess what you could achieve commercially over the next call it 2 to 3, 4 years.
Yes, Hi, Bill. So as you think about Dayton really referring back to how we talked about it last quarter. Right now, we're really focused on getting our lines certified up and running, getting our manufacturing processes dialed in, because scaling an efficient process would be the worst thing a company could do. And so we're really focused on that 12 and 25. But getting ready, as you said, for a measured approach to Ohio, starting small, as you've seen us talk about before, doing this in a very methodical way, starting small in this case with the small manufacturing operation, which gives us that [indiscernible] of employees building out the culture that allows us to scale, and then followed by a methodical ramp-up to eventually 500 aircraft over time. But it will be over time and a more gradual approach to scaling, just because that's the right way to scale the manufacturing plant. And it's the most prudent way to do it.
Yes, makes sense. And I may have missed it, but as we think about your use of cash this year, can you give us a little bit more granularity on CapEx versus OpEx? You said substantially up. And I guess what does that mean? How much government incentives can offset and I guess how much of the OpEx growth is, I guess, slated for the go-to-market, the first commercial aircraft, additional software engineers, app development, hirings, just basically hired to [indiscernible] commercialization efforts trying to get a sense versus, certification and manufacturing spend?
Yes, so as we think about this year, we spent about $30 million in CapEx. I would expect that to roughly double next year. And that's really driven by both building out the facility here in California, and which will take more across 2024, 2025, but also building out the equipment and building out the facility in Ohio. And so that's a big lumpy step function in our CapEx. The rest of it largely is OpEx and that's going to be growing primarily manufacturing and certification folks, because that is the bulk of our organization. We'll start early operations. We'll be sending people down to Dubai to start there. And so we'll have some growth there. But the bulk of our operational growth will be around certification and manufacturing of our aircraft, and buying parts like those things are all in there, right.
Just to be clear, you said next year $60 million? You mean this year, 2020…
[indiscernible] I signed my checks with the right year, but I still have to think about it twice.
[Operator Instructions]. Our next question comes from the line of Edison Yu with Deutsche Bank.
Thanks for taking our questions. Want to follow-up on the design topic from earlier? I believe in the latest NTSB report. You guys are talking about 4,200 maximum takeoff weight. Obviously, the production vehicle is 5,300 as per your disclosure. Can you give us a sense what drove that increase. And also on the latest aircraft production, are we at the 5,300 already?
Thanks, Austin. Yes, the 5,300 is the weight of the aircraft that we're taking through certification. And we're very pleased with the performance that we're achieving across all the different systems on the aircraft and expect to that -- as Didier talked about the designs to stay where they are.
And in terms of what would the drivers for the drivers of the increase in weight? Anything you can share on that?
No, it's again, the 4,200 pound vehicle was an aircraft that we designed in 2017 and 2018 and began flying in early 2019. It has showed the incredible performance across all the different dimensions. Again, we have the most performing aircraft in the market with or in development with 100 mile range, 200 mile an hour top speed and a really incredible acoustic signature, which we think is something that's really underappreciated and something that we've focused on since the beginning and which I don't think others been able to achieve or prioritize them in the right way. And we think this is critical to delivering operations to the markets where our customers want to go.
Thank you. Our last question for today comes from Savi Syth with Raymond James.
Hey, thanks for the follow-up. I am just kind of curious, you have announced several infrastructure partnerships and including this Dubai operation, and you are working closely with Delta. Could you talk a little bit about how you're thinking about your initial commercialization plan, how all of this fits within that launch plan?
Yes. Thank you, Savi. On the infrastructure part, this is an important piece of the business and an area where we are very, very grateful for our partnership with Delta and the investments they have made into the airports in LaGuardia, JFK and LAX, and to be able to build best-in-class infrastructure, closely coupled to those terminals, and to deliver seamless customer experiences as they get off of Delta flights and onto Joby flights.
And then also delivering incredible customer experiences with our partner Sky Ports in Dubai. And then as we build out infrastructure opportunities in markets around the world, this is an incredible opportunity to again, to deliver the customer experience that we're looking for. And so as we go forward, infrastructure is going to be a more and more significant part of the conversation.
I appreciate that the infrastructure is the long pole in the tent, but are you going to wait to see how things progressed, to figure out where you launch operations first? Is that my understanding or I'm just trying to figure out how this all comes together because you also have charging in various airports, not tied to the Delta operation?
Yes, I think as you saw, we rolled out a bunch of different partnerships in airports, in different markets in the US. And so, rolling out that infrastructure and the engagement there, the momentum we're seeing there is just absolutely fantastic.
Thank you. I would now like to turn the conference back over to Joby Aviation's JoeBen Bevirt for closing comments.
Yes, thank you so much. I think one of the things you'll, I hope you took away from the call today was that this is more tangible than it's ever been before. And our team is incredibly well positioned to capitalize on this amazing market. I think you also heard that, that our team is consistently knocking it out of the park on certification, on manufacturing, and on the commercialization. And it's just, I have to say that I feel incredibly privileged to have the opportunity to work with the amazing partners we have around the world and with the just spectacular team here at Joby Aviation that I had like to express my sincere gratitude for delivering quarter after quarter. Thank you all so much for joining us today and I hope you have a fantastic afternoon or evening.
This concludes today's teleconference. You may disconnect your lines at this time. Thank you for your participation.