'Thousands of pounds of socks from China': Flying-taxi maker Archer sues Joby

Electric air-taxi developer Archer Aviation is suing rival Joby Aviation, alleging it misled regulators, concealed ties to China, and imported aerospace components from the country disguised as shipments of socks. Shares of both companies nevertheless rose – markets were reacting to the White House selecting them to participate in a program to develop air taxis.

Archer Aviation filed a lawsuit against its rival Joby in a California federal court on Monday, the Wall Street Journal reported. The filing alleges that Joby’s actions undermine national security and contradict the company’s positioning as an “American-made” manufacturer. Archer claims Joby operated a manufacturing subsidiary in China for more than a decade that received technology development grants from the Chinese government. The company also fraudulently disguised aerospace imports from that subsidiary by misclassifying parts as thousands of pounds of socks, napkins, hair clips, and other items, according to the lawsuit.

Joby “does not respond to nonsense,” a company lawyer said.

Shares of both companies jumped on the news. Archer stock rose 4.2% on Monday and continued climbing in early trading on Tuesday. Joby shares gained 5.1% on Monday and were up nearly another 5.0% in premarket trading on Tuesday.

Investors reacted to announcements from both companies that they expect to begin flights as early as 2026 after the White House selected them to participate in a program to develop air taxis, the Journal reported. Under the initiative, Joby could begin operations in 10 U.S. states, and Archer in three. The development marks an important milestone for the U.S. air-taxi industry and could accelerate the commercialization of the technology in the U.S., according to the company.

Archer and Joby are developing electric vertical takeoff and landing aircraft, and they are widely viewed as frontrunners in the emerging market. According to JPMorgan, the sector could reach $1 trillion by 2040.

This is not the first legal dispute between the companies. In November, Joby sued Archer, alleging corporate espionage, the Wall Street Journal recalls. Joby claims its rival hired a former employee who downloaded confidential information before leaving the company. According to the lawsuit, Archer induced the employee to breach confidentiality agreements and used the information to disrupt Joby’s business partnerships. Archer has denied those allegations.

Six Wall Street analysts recommend Archer shares as a “buy,” while another two have a “hold” rating. The average target price is $11.88 per share, implying upside of nearly 83% versus the closing price on Monday.

Wall Street views on Joby are more split. The stock has four “hold” ratings, three “buy” ratings, and three “sell” ratings. The consensus target price stands at $12.80 per share, about 28% above the most recent close.