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- Joby leads Archer in certification, manufacturing, hybrid drive train, and autonomy, making it the clear operational frontrunner in the eVTOL sector.
- Archer’s recent share price outperformance is unjustified given its lagging progress, lack of piloted flights, and rollback of certification timelines.
- Joby has robust manufacturing partnerships, global route plans, and sufficient cash runway, while Archer faces dilution and uncertainty in execution.
- I remain skeptical of Archer’s claims and maintain my long position in Joby, expecting Archer’s price premium to unwind soon.
Joby (JOBY) and Archer (ACHR) have emerged as the front-runners in the race to bring air taxi services to the US and much of the Western world. The market is a true emerging technology, likely to be a significant disruptive force. The 2024 market was estimated to be $1.2 billion, and forecasts for 2030 range from $4 billion to $30 billion, with a median forecast of $14 billion and a CAGR of 66%.
The market has enormous potential, as commercialization approaches, the sector is going through a significant shakeout. Lilium and Volocopter were both faced with financial challenges they could not overcome. Lilium closed in February and Volocopter became part of Wafeng China after insolvency proceedings in 2024
Airbus withdrew from the industry, ending its ten-year development of the CityAirbus, with no plans to bring it to market. Boeing continues developing the autonomous Wisk air eVTOL but has released very little recently.
Timelines for certification continue to lengthen, Archer withdrew its 2025 target date in its 2024 annual report and Joby appears to be heading for 2027, but none of the companies are giving firm dates.
The competitive situation now looks like this.
Share Prices
There has been a marked difference in the performance of the shares in each company. Archer has outperformed the rest of the industry by a significant margin. This article’s thesis is that this outperformance is unjustified and will reverse in the coming months.
My Holdings
I am long Joby and EHang (EH), I avoided Lilium after writing this article, I said it would never fly. I expressed concerns about Eve’s (EVEX) timeline and I thought Vertical Aerospace (EVTL) was a clear sell, but Vertical has made significant progress since, and I am no longer bearish.
Having reviewed the Q1 earnings reports of Joby, Archer, Vertical, and Eve, the following key business metrics have emerged.
- Certification Timeline
- Manufacturing Capability
- Initial markets and Routes
- Hybrid drive trains
- Autonomous operation
These 5 metrics will decide both the short term and the long-term success of each business. I believe Archer does not lead in any of the metrics, whereas Joby leads in most.
Certification
Without certification, nobody flies; it is the starting point. Companies don’t really have an aircraft until it is certified, and they are not really a company, just an R&D experiment.
EHang is already fully certified and operating in China
Eve is certifying in Brazil and has yet to build its first prototype.
Vertical is certifying in the UK, and piloted flights have started.
Joby and Archer are subject to the FAA certification in the US, this has five stages:
1-Certification Basis: Company-specific rules published in the Federal Register.
2- Means of Compliance: Agreeing with the FAA how it will meet the rules.
3-Certification Plans: Submitting plans outlining the tests and analysis that will be performed to show compliance.
4-Testing and Analysis, conducting the actual tests outlined in stage 3.
5-Type Inspection Authorization [TIA] FAA test pilots conduct tests to validate the aircraft’s performance.
Joby has completed 62% of stage 4. Joby has multiple pilots flying its five aircraft as many as eight times a day. Two full flight crews operate out of Edwards Air Force base and the Joby home base Marina.
In Q1 the CEO said, “start flight testing in Dubai in the middle of this year and to begin TIA flights with the FAA within 12 months.”
The statement probably pushes US certification back into 2026 at the earliest and more likely 2027. It is unclear how long the TIA flights will take, but with tens of thousands of flights completed, I would expect Joby to pass this test at the quickest possible rate.
Archer and in the latest earnings result Archer gave contradictory statements regarding the first piloted flight, saying “We have already begun Midnight’s piloted testing” and “on track to begin piloted flights imminently.”
I believe that, they have one company-conforming aircraft and have never flown it with a pilot. The CEO said, “On the certification front, we’ve made continued progress alongside the FAA to finalize the remaining compliance areas.” This implies strongly that Archer is still at stage 2 of the five stages of FAA certification. Joby completed stage 2 in February 2023, putting Archer at least 2 years behind Joby.
In the two latest annual reports, Archer made a significant change to its certification timeline
