Electric vertical takeoff and landing (eVTOL) companies Joby Aviation (NYSE: JOBY) and Archer Aviation (NYSE: ACHR) have experienced significant stock declines this year. Joby is down 50% year to date and 67% from its all-time high, while Archer has fallen 25% year to date and 61% from its record high.
Despite the market pressure, both companies have reported progress toward commercialization. Joby stated in its recent earnings that it is in the fifth and final stage of its Federal Aviation Administration (FAA) type certification. The company currently has five aircraft flying and 12 more in production. Joby has also secured a manufacturing partnership with Toyota (NYSE: TM) and acquired Blade Aerospace. Additionally, the company has reached agreements with Uber, Delta Air Lines, ANA, and the U.S. Department of Defense.
Archer Aviation has also advanced its commercialization timeline, with management expecting it to occur in the next few months. The company has inked deals with Stellantis, Anduril, United Airlines, and EDGE Group. Recently, Archer diversified into the defense sector by acquiring Wisk Aero, Insitu, and SkyGrid from Boeing (NYSE: BA), with Boeing taking an equity stake in the company.
Investors remain concerned about the high levels of short interest in both stocks. Archer has a short interest of 11.45%, while Joby has 15%. A key risk cited is the potential need for these companies to raise capital ahead of and after commercialization. Joby’s outstanding shares have increased from 604 million in 2022 to 986 million today. Similarly, Archer’s outstanding shares have risen from 162 million in 2022 to 770 million. The article notes that the business models for these companies are largely untested, as the eVTOL industry is new.
