Archer Sues Joby, Accuses Rival of Downplaying China Ties

Archer Aviation, a company that designs electric flying taxis, has filed a lawsuit against Joby Aviation, accusing the rival of misleading federal regulators and investors by hiding its extensive connections with Chinese suppliers. The legal action, submitted on Monday in a California federal court, claims that Joby's actions pose a threat to national security and contradict its branding as an "American-made" air-taxi manufacturer.

According to the lawsuit, Joby has operated a manufacturing subsidiary in Shenzhen, China, for over a decade. This entity reportedly benefited from technology-development grants provided directly by the Chinese government. The suit further alleges that Joby fraudulently disguised aerospace imports from this subsidiary by misclassifying the parts as thousands of pounds of socks, napkins, hair clips, and other items.

Alex Spiro, an attorney representing Joby, dismissed the allegations as baseless. “Archer’s constant legal issues and flailing business operations have left it no choice but to resort to invented nonsensical theories,” Spiro said in a statement. “We will see them in court.”

Archer is accusing Joby of false advertising in violation of federal law and fraudulent business practices that gave it an unfair advantage, which are prohibited under California code. The company is seeking injunctive relief and damages.

“Historically, the aviation industry has not sourced parts from China,” said Eric Lentell, Archer’s chief legal and strategy officer. “The fact that you’re sourcing from China at all is a huge problem.”

This lawsuit escalates a long-standing rivalry between Archer and Joby, as both companies compete to bring electric vertical takeoff and landing (eVTOL) vehicles to market. These vehicles resemble helicopters during takeoff and fly horizontally like traditional planes. Industry experts view eVTOLs as the next frontier in aviation technology, with the potential to revolutionize urban transit and provide new tools for military strategists.

The lawsuit was filed as a counterclaim to a November lawsuit by Joby against Archer. In that case, Joby alleged that Archer engaged in corporate espionage by hiring a former employee who downloaded confidential material before leaving. Joby claimed that Archer induced the employee to breach confidentiality agreements and used the information to disrupt Joby’s business partnerships.

In its counterclaim, Archer denied any misappropriation of trade secrets, inducing the employee to break their contract, or interfering with Joby’s partnerships. It has also filed a motion to dismiss Joby’s lawsuit.

Joby was founded in 2009 in Santa Cruz, Calif., and its headquarters remains there. The company has expanded its operations across the U.S. since then, including subsidiaries in Germany, Austria, and Costa Rica, according to securities filings.

Archer, established in 2018, has been working to close the gap with Joby. Both companies went public in 2021 through special-purpose acquisition companies (SPACs). Reid Hoffman, co-founder of LinkedIn, and Mark Pincus, founder of Zynga, led the SPAC deal that took Joby public, while Ken Moelis, founder of Moelis & Co., sponsored the SPAC that merged with Archer.

Both companies are vying to dominate a passenger air-taxi market that some Wall Street analysts estimate could reach $1 trillion by 2040.

“This is a race for that next great evolution in airspace and what that evolution is going to be,” Lentell said.

The Trump administration has sought to accelerate the development of eVTOLs as part of its geopolitical competition with China. As part of this effort, the administration has encouraged companies to reduce reliance on foreign supply chains. Joby and Archer have contracts worth tens of millions of dollars with the U.S. Air Force to fund their engineering efforts in exchange for air-taxi deliveries.

In February, Joby announced plans to launch commercial flights in Dubai by the end of the year, allowing passengers to book air taxis through the Uber app. Archer has partnered with a real-estate tycoon to develop an air-taxi network in South Florida and will serve as the official air-taxi provider for the 2028 Summer Olympics in Los Angeles.

On Monday, the Federal Aviation Administration selected Joby and Archer to participate in several pilot projects allowing eVTOL tests in partnership with state and local authorities. The proposed projects include passenger flights in Manhattan, regional flights in Texas, and cargo delivery in Florida.

Archer argues that Joby should be disqualified from the FAA’s pilot program and that additional scrutiny should be given to the company’s existing federal partnerships.

To avoid regulatory oversight, Joby removed evidence of its Chinese subsidiary from its website, according to Archer’s lawsuit. The company also allegedly concealed its reliance on a battery supplier that Archer believes has ties to the Chinese Communist Party. Public disclosures have omitted mentions of Joby’s relationship with the battery supplier, the suit alleged.

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