Electric Vertical Takeoff and Landing Stocks Face Backlash Amid Concerns Over Commercialization Timelines, Legal Risks, and Valuation.

Archer Aviation and Joby Aviation shares are trading lower as enthusiasm for electric vertical takeoff and landing (eVTOL) stocks cools due to concerns over commercialization timelines, legal risks, and valuation. Despite the drop, both stocks remain up year-to-date and are advancing toward FAA certification and commercial launches. Archer is progressing with its Midnight aircraft certification, while Joby is working toward a 2026 Dubai launch and expanding U.S. testing.

Archer Aviation (ACHR) and Joby Aviation (JOBY) shares are experiencing a downturn Monday, following strong July rallies, as investors reassess legal and valuation risks. Despite the market's pullback, both companies continue to progress in their FAA certification and international commercialization plans [1].

The recent decline in Archer and Joby shares can be attributed to a shift in investor sentiment. The stocks had recently reached new highs amidst optimism for eVTOL commercialization but have since faced renewed scrutiny over commercialization timelines, legal risks, and valuation [1]. Both companies had been beneficiaries of the eVTOL enthusiasm, with Joby surging on news of factory expansion, FAA certification advancements, and piloted flights in Dubai [1]. However, these gains are being reassessed as traders lock in profits and consider emerging headwinds.

Archer, which had been down Monday, extended a volatile stretch triggered by a Delaware Chancery Court decision to allow a shareholder lawsuit tied to its 2021 SPAC merger to proceed. Additionally, uncertainty surrounding its partnership with Stellantis has added to the market's concerns [1]. While the automaker remains a manufacturing backer, its exit from a hydrogen fuel project has stirred speculation over its long-term commitment to Archer's production plans.

The FAA's recent publication of long-awaited guidance for the certification of powered-lift aircraft, including eVTOLs, has provided a clearer path forward for companies like Archer and Joby [2]. The new advisory circular (AC) defines powered-lift as heavier-than-air aircraft that use engine-driven lift devices or engine thrust for vertical takeoff and landing, and rigid airfoils for horizontal flight. This guidance is a significant step forward for the industry, streamlining the certification process and providing a more predictable path to commercialization.

Despite Monday's drop, both Archer and Joby remain up year-to-date. Archer is advancing FAA certification for its Midnight aircraft with backing from Stellantis and United Airlines, while Joby is progressing toward a 2026 Dubai launch and expanding U.S. testing [1]. FAA support for eVTOL integration remains a key long-term catalyst for both companies.

References:
[1] https://www.benzinga.com/trading-ideas/movers/25/07/46665588/archer-joby-slide-as-evtol-enthusiasm-wanes
[2] https://www.flyingmag.com/faa-releases-powered-lift-certification-guidance/