Update: The story has been updated to include comments from Joby and Archer.

Electric Vertical Takeoff and Landing (eVTOL) aircraft maker Archer Aviation Inc. has filed a countersuit against rival Joby Aviation Inc., alleging the latter's ties to China amid a theft of trade secrets lawsuit filed last November.

The countersuit, filed in California, accused Joby of hiding and then leveraging its ties to China to gain an advantage in the eVTOL sector, Reuters reported on Monday.

Archer has also accused Joby of defrauding the U.S. government and receiving grants from the Chinese government. The countersuit claims that Joby purposefully misrepresented "thousands of pounds of Chinese-origin aircraft materials as ​consumer goods," to "evade U.S. tariffs and foreign-influence ⁠oversight."

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“The United States is in a global race with China to lead the future of aviation. While Joby promotes a made-in-America, vertical integration narrative and benefits from U.S. taxpayer-backed programs, our filing today lays out detailed allegations exposing Joby's longstanding and extensive ties to China. We brought this action to ensure accountability, restore fair competition, and safeguard the strategic future of American advanced aviation,” said Eric Lentell, Chief Legal and Strategy Officer at Archer Aviation.

“Archer's ludicrous and defamatory claims are nothing more than an irresponsible attempt to distract from Joby's trade secret theft lawsuit proceeding against Archer. Joby is a U.S.-headquartered company that operates with strict compliance across its supply chain, and the company has been fully transparent with the US Government about its operations. Joby has no ties to the Chinese Communist Party and has not received grants or subsidies from Chinese authorities. Archer's constant legal issues and flailing business operations have left it no choice but to resort to invented nonsensical theories. We look forward to seeing them in court,” said Alex Spiro, an attorney for Joby.

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The news comes as Joby announced it was partnering with the Federal Aviation Administration via the eVTOL Integration Pilot Program (eIPP). The program would let the company begin operations in 2026 in 10 states across the U.S. The partnership was also hailed by Joby CEO JoeBen Bevirt as a “defining moment for American innovation."

Following the announcement, Cathie Wood-led investment firm ARK Invest bought over 27,759 shares of the company via ARK's Autonomous Technology and Robotics ETF and the Space and Defense Innovation ETF. The investment has totaled ARK's stake in Joby to over $51 million.

Archer, on the other hand, reported underwhelming Q4 earnings, when the company reported an estimated EPS loss of $0.26, which missed analysts’ expected loss of $0.24 per share. Archer also reported a revenue of $300,000 while liquidity remained at $2 billion.

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This article Archer Aviation Files Countersuit Against Rival Joby Alleging China Ties, Fraud Amid FAA Partnership (UPDATED) originally appeared on Benzinga.com