• Joby Aviation received $250 million in investment from Toyota this week.

• The company is approving its air taxi products.

• The stock is overvalued for companies that do not generate any revenue.

• 10 Better Stocks than Joby Aviation›

Shares Jozy Aviation (NYSE: Joey) According to S&P Global Market Intelligence, it soared as much as 26.8% this week. Air taxi startups are currently up 17.6% this week as of Friday, May 30 at 3:47 pm ET. This increase is due to Toyota's announcement of investments into the company to establish a consolidated manufacturing partnership. The stock raised interest in the announcement, but has since given some gains.

Here's more information on why Joby Aviation Stock soared this week.

On May 27, Joby Aviation announced a $250 million investment in Toyota Motor, part of the auto manufacturing giant's $500 million commitment. Joby Aviation is building an electrical taxi, and the money (and Toyota’s expertise) will help the company pass the certification and try to expand its manufacturing industry.

Jozy Aviation has not operated its business yet. It attempts to disrupt the transportation market with vertical takeoff vehicles, similar to helicopters, but much quieter. The vehicles have not yet approved flights and are currently under review by the Federal Aviation Administration (FAA). Since this is a destructive new aircraft, product approval will take a long time to ensure all safety standards are met.

Last quarter, the company ended with $813 million in cash and equivalent value and Toyota's $500 million commitment. Now, it has a balance sheet of $250 million to help it continue to invest in product development and certification. It requires that money. Joby Aviation has burned $489 million in free cash flow over the past 12 months, leaving only a few years of cash to run out.

After the recent surge, Joby Aviation shares have a market capitalization of $6.57 billion. It generates zero income. While new air taxi products can be disruptive, investors should be cautious about investing in products that have not even been approved for operation.

Even if Jozy Aviation can start selling vehicles and generate hundreds of millions or even billions of dollars in revenue, it is not cheap compared to its current market capitalization of over $6 billion. Share dilution will also affect returns, with stocks up 10% last year.