Betting on Archer Aviation or Joby Aviation Being the Tesla of eVTOLs? They Could End Up More Like Lucid.

Archer Aviation and Joby Aviation are the most well-known companies working on electric vertical take-off and landing (eVTOL) aircraft in the United States. Their success in the commercial eVTOL market will depend on scaling production, reducing costs, and making a profit. However, based on the trajectory of Lucid, a luxury electric car and SUV manufacturer, it may be unlikely that either Archer or Joby will achieve profitability in the consumer market within the next five years.

Lucid has faced significant challenges in scaling effectively, despite its vehicles being well-regarded. Both Archer and Joby have a long way to go before they can produce enough aircraft to generate substantial gross profits. Additionally, both companies have yet to receive Federal Aviation Administration (FAA) certification for their flagship commercial eVTOL models, which adds to the uncertainty surrounding their prospects.

The potential for growth in the eVTOL market may make Archer and Joby appear similar to Tesla's growth trajectory in the electric vehicle market. However, Tesla was able to achieve positive gross margins by using existing or lightly customized automobile components, while Archer and Joby will likely rely on proprietary parts, leading to higher manufacturing costs.

Furthermore, Tesla launched its vehicles into an already established market with substantial demand, while Archer and Joby are still navigating the relatively nascent eVTOL market. Investors should be cautious with their bets on either Archer or Joby, as there is a significant risk of their stock performance mirroring that of Lucid, with massive dilution as the companies struggle to become profitable.