Archer Aviation vs. Joby Aviation Legal Battle: $1.5 Billion Funding Hangs in the Balance

Electric air taxi firms Archer Aviation ACHR +0.54% ▲ and Joby Aviation JOBY +0.55% ▲ are now in a legal clash that may reach far past trade data. The case may shape how much cash each firm can raise from U.S. grants, military deals, and new market funding.

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This new step came soon after the firms were named as key parts in a fresh U.S. air taxi plan. As a result, the lawsuit now puts large sums of cash and key ties with U.S. groups at risk.

Federal Grants and Air Taxi Plans

First, the new fight is directly linked to the eVTOL Integration Pilot Program, or eIPP; the U.S. Department of Transportation set up the plan to help speed air taxi use and keep the U.S. in the lead in next-gen air tech. The plan does not grant cash to each firm yet. Still, it acts as the gate to close to $1.5 billion in 2026 grant funds that may flow from U.S. build and infrastructure aid plans.

Both Archer Aviation and Joby Aviation were picked as key tech firms in plans that span 26 states. Yet Joby won a lead role in five of the eight main plans. These jobs may link air taxi use to the Manhattan heliport and a state-wide air net in Florida. At the same time, Archer won roles in key hubs in Texas, Florida, and New York.

Now Archer says Joby hid key links in its supply chain. In its court file, Archer said Joby or its agents “fraudulently misclassified thousands of pounds of Chinese-origin aircraft materials as consumer goods.” Archer also said the move may have helped Joby dodge U.S. taxes and checks tied to goods with ties to China.

Joby pushed back on the claim. Alex Spiro, a lawyer for the firm, said the case has no basis and aims to shift the focus from Archer’s own woes. “Archer’s constant legal issues and flailing business operations have left it no choice but to resort to invented nonsensical theories,” Spiro said. “We will see them in court.”

For now, no U.S. group has said it will start a probe tied to the case. Still, if a probe does start, Joby may risk losing its role in grant plans that seek to back the U.S. tech lead.

Defense Deals and Cash Flow Risks

Next, the case may also touch key military deals. Joby now has a total potential contract value of $163 million in deals with the U.S. Air Force through the Agility Prime plan. The plan aims to test and add new air tech for the military’s use.

These deals help Joby test its craft and gain cash while it works on its first air taxi launch.

Yet Archer now claims that Joby may rely on parts from China. If U.S. army groups see a risk to security rules, they may check the supply chain in full. If that were to take place, some deals could slow or pause while a check is in progress.

At the same time, both firms still have large cash piles that help fund the long road to mass craft use. Archer said it has nearly $2 billion in cash and near-cash funds. That sum rose after an $850 million fundraising tied to new U.S. pro-air taxi rules.

Joby is also well-funded, with a firm value of nearly $10 billion. Yet that value rests in part on the hope that it will be the first firm to run full air taxi trips in 2026.

For that reason, any new probe, rule risk, or fund loss may shape how fast each firm can move to full launch.

The Main Issue for Investors

In the end, the lawsuit now goes past trade data and staff files. It may shape who gains key U.S. grants, who keeps army ties, and which firm holds the trust of U.S. rule groups.

At the same time, both firms are racing to gain FAA approval and operate the first full air taxi network in the U.S. If the case leads to more checks or rulemaking risk, the path to that goal may grow harder for one of them.

We used TipRanks’ Comparison Tool to align the two companies. It’s a great tool to gain an in-depth view of each stock and the eVTOL industry as a whole.

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