On March 9, Archer Aviation (ACHR) countersued fellow electric vertical takeoff and landing (eVTOL) aircraft maker Joby Aviation (JOBY), alleging that Joby and its associates had “fraudulently misclassified thousands of pounds of Chinese-origin aircraft materials as consumer goods." Joby denied the assertion. The countersuit follows a lawsuit from Joby, which claims that Archer stole trade secrets via a former Joby employee.
Overall, eVTOLs appear to have a bright future, as they promise to provide passengers with a good means of quick transportation to avoid traffic. Moreover, Washington appears to be heavily interested in eVTOLS, and the Pentagon is working with both Joby and Archer. Consequently, both JOBY stock and ACHR stock appear to be intriguing buys for growth investors.
In the wake of Archer's lawsuit against Joby, however, ACHR stock may pose meaningfully less risk than JOBY stock. Let's take a closer look.
About Archer Aviation and Joby Aviation
Based in San Jose, California, Archer Aviation is partnering with United Airlines (UAL) to provide air taxis in New York City and is looking to kick off a similar service in the United Arab Emirates (UAE). Archer has also signed a deal with the U.S. Air Force that could be worth as much as $142 million. Archer Aviation has a market capitalization of $4 billion.
Headquartered in Santa Cruz, California, Joby is also looking to provide services in NYC, helped by its acquisition of Blade Air Mobility, which offers helicopter flights in the area. Like Archer, Joby is preparing to launch an air-taxi service in the UAE as well, and has major deal with the Air Force. Joby Aviation has a market cap of $8.88 billion.
Trade-Secret Lawsuits Can Be Common
Back in November, Joby contended in a lawsuit that Archer had stolen trade secrets from the company. Specifically, Joby alleged that Archer had recruited a former Joby employee who obtained “confidential information."
This type of lawsuit isn't unusual. One law firm states that companies suing one another over accusations of obtaining trade secrets from former employees is "one of the most common scenarios we see.” Several such lawsuits have been settled with little to no impact on firms that allegedly stole information. Accordingly, there's a chance that Archer may not experience many issues as a result of Joby's suit.
Joby Could Have Issues With Both Washington and China
In its countersuit, however, Archer contends that Joby and associates “fraudulently misclassified thousands of pounds of Chinese-origin aircraft materials as consumer goods.” The alleged move was apparently made in order to avoid tariffs as well as potential repercussions and government scrutiny for ties to China. President Donald Trump's administration has been quite serious about preventing companies from failing to pay tariffs, and the Pentagon has looked to avoid buying products made by ”Chinese military companies."
Consequently, if Archer's allegations about Joby are true, Joby may have trouble obtaining additional government contracts and aid from the Trump administration. Because Joby has already been awarded significant government deals and the administration appears to be aggressively supporting eVTOL firms, such developments would likely meaningfully hinder Joby's development and negatively impact the company's financial results.
On top of that, past issues with Chinese parts and manufacturing in the electric vehicle (EV) industry may concern JOBY stock investors. Indeed, the businesses of a few U.S. EV companies have previously been hurt by importing faulty parts from China and Chinese manufacturing issues.
In 2023, for example, ElectraMeccanica — whose Solo EV was largely manufactured in China — issued a recall for all Solo models sold since 2019 due to a possible “loss of propulsion.” Nikola, which manufactured battery-electric and fuel-cell trucks, also had huge problems with battery cells made in China. Nikola famously declared bankruptcy in early 2025 after a history of controversy.
The Bottom Line on Archer and Joby
Looking forward, eVTOLs are likely to be very popular because of their ability to circumvent traffic and provide quick transportation for travelers. Additionally, both Archer and Joby have made significant deals that give them the potential to thrive over the long term. But if Archer's allegations about Joby are true, the latter's government ties could be greatly undermined. Moreover, based on some experiences in the EV industry, any manufacturing reliance on Chinese firms could create some technical difficulties, although Joby denies the “Chinese-origin aircraft materials" allegations.
All told, with a lawsuit pointing to potential risks, ACHR may be the better flying car stock to buy now.
On the date of publication, Larry Ramer did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policy here.
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