How Archer Aviation Has Ceded the Lead to Air Taxi Rival Joby Aviation
Archer Aviation has been on a roll. It has cut electric air taxi deals in Japan and with Florida billionaire investor Stephen Ross. Last month, it received its first revenue from Abu Dhabi as part of plans to begin commercial air taxi flights next year there, too.
There’s a tiny hitch: Archer’s proposed commercial aircraft, called Midnight, has never been on a piloted flight. The San Jose, Calif., startup has repeatedly canceled piloted public demonstrations of the aircraft, most recently last month at the Dubai Airshow, where its main rival, Joby Aviation, conducted piloted public flights on five consecutive days.
Archer says it’s on track to begin commercial flights next year in the United Arab Emirates, in at least one U.S. city, or both. And last month it opened a potential new line of revenue as an equipment supplier to defense contractors, signing a deal to provide electric motors for a hybrid autonomous drone under co-development by Anduril Industries and the Emirates-based Edge Group.
In the Japan deal, Archer can sell up to 100 Midnights to a joint venture of Japan Airlines and Sumitomo as soon as regulators certify the aircraft, with plans to fly short hops in Tokyo, Osaka and three other destinations in the country. Ross plans to partner with Archer to build multiple air taxi facilities, called vertiports, as soon as next year connecting south Florida airports and other locations with his West Palm Beach office and residential properties.
But reported bugs in Midnight, affecting its rear propellers, and the cancellation of three booked exhibitions of the aircraft over the last year have created doubts about Archer’s ability to deliver the aircraft it has promised next year.
“Archer’s very good at making deals,” said Gary Vermaak, chief of staff at the Advanced Air Mobility Institute, a South Africa–based think tank that studies electric aviation. “What the deals are worth or are going to be worth is questionable.”
In an interview, Eric Lentell, Archer’s chief strategy officer, said he expects Midnight to fly in the second half of next year under a Trump administration program allowing commercial electric air taxis to operate even if they lack full regulatory approval. He said the company had simply changed its mind about participating in the air shows.
The company declines to comment on whether it’s had trouble getting its new rear propellers—a four-blade configuration—to work properly. Lentell told me the company hadn’t yet flown the new Midnight configured with the four-blade propeller but would fly a piloted version of it in the next few months.
Wall Street has pushed Joby’s share price up 89% year to date while pushing down Archer’s 10%. But Archer, founded in 2018, has had no problems raising money: It has raised $1.8 billion in three rounds this year alone, two involving equity and one debt, and it ended the third quarter with $1.6 billion in cash, cash equivalents and short-term investments. Its market cap is $5.7 billion.
The two companies are in stiff competition to hold the attention of investors and regulators: Each has raised and spent billions of dollars to develop their aircraft, and both will need tens of billions more to build and scale manufacturing plants aiming to turn out hundreds and eventually thousands of the vehicles.
They are both now also aiming for military sales, meaning they need to capture and keep the attention of defense officials around the world as well.
Their rivalry has created some bad blood: Last month, Joby sued Archer, claiming it stole trade secrets by hiring away a Joby employee it said took with him confidential information about its business strategy. Archer has denied the allegations.
Industry veterans generally treat Archer and Joby as more or less technological equals, but it’s not clear why that is the case given that Joby appears to have an edge. In April, for instance, Joby’s prototype commercial vehicle was first to carry out a difficult maneuver—lifting off vertically like a helicopter and then zooming ahead horizontally like a plane, the capability that sets such aircraft apart from helicopters. The maneuver, with a pilot aboard, is treated as the ultimate proving ground for who in the field is serious and who isn’t.
Joby carried out that maneuver multiple times at the Dubai Airshow. Archer said it also conducted a transition flight the previous week in Abu Dhabi. But from the standpoint of street cred, its exhibition had at least two strikes against it: It was an unpiloted aircraft, considered inherently less risky because no one’s life was on the line, and it was an early version of Midnight, not the one intended for regulatory certification.
Archer’s decision to back out of flights at air shows in South Korea, Japan and Dubai over the last year has attracted industry attention. Archer says it simply decided to devote its time where it most counts—in Abu Dhabi, where it seems likely to deploy its first commercial aircraft next year; and in Salinas, Calif., where it’s developing the Midnight.
But that approach contrasts sharply with the startup’s otherwise bold marketing style: It has spent tens of millions of dollars to be the official air taxi provider and a sponsor of both the 2026 World Cup and the 2028 Olympics. The Olympics and some World Cup games will take place in Los Angeles, and Archer spent $126 million alone to buy Hawthorne Airport, near the southern California city, for use during the events.
Nikhil Goel, Archer’s chief commercial officer, told me the company plans to turn the airport into “the AI-powered airport of the future,” with AI used in passenger identification, in air traffic control and for security.
Archer is relying on the Trump administration’s program to get off the ground next year. Lentell said Archer would apply with the Department of Transportation to operate Midnight in Huntington Beach, Calif. If the agency approves the application, Huntington Beach could serve as a jumping-off point for Archer’s operations around the World Cup and the Olympics, Lentell said.
Part of the reason for Archer’s slower deployment is a change it made this year to the Midnight’s design, altering it from a two-blade propeller to a four-blade version. For aerodynamic reasons, the propellers are supposed to stow alongside the fuselage, according to The Air Current, a publication on electric aviation. But Archer has not yet flown this new version.
Lentell did not dispute that Joby’s aircraft is technologically ahead of Archer’s but said Archer is strategically going after a different objective: It is developing an aircraft that can take off, land and fly both like a plane and a helicopter; Joby’s aircraft is designed to fly only like a helicopter.
Archer, too, wants its aircraft to eventually fly exclusively like a helicopter, he said, but current airports aren’t widely configured for such aircraft. “We think it’'s going to be really important to be able to operate in and out of as much infrastructure as possible that already exists,” Lentell said.