Archer Aviation Inc. (ACHR)

Archer Aviation Inc. is a pre-revenue aerospace company designing and developing electric vertical takeoff and landing (eVTOL) aircraft for urban air mobility (UAM) networks, with a mission to unlock the skies and reimagine how people move. Its production aircraft, Midnight, unveiled in November 2022, features a proprietary 12-tilt-6 configuration with 12 propellers on 6 booms providing vertical lift and forward propulsion, designed to carry four passengers plus a pilot on short trips of approximately 20 miles with minimal recharge time; the aircraft received an FAA Special Airworthiness Certificate in August 2023 and began flight testing in October 2023, building on lessons from its demonstrator aircraft, Maker. The company is pursuing FAA certification to enable commercial service and plans two complementary business lines once approvals are secured: Archer UAM, a direct-to-consumer app-based aerial ride-share service in select major cities, and Archer Direct, the sale of aircraft to third-party operators, including a purchase agreement with United Airlines for up to $1.0 billion (with a $500 million option) and U.S. Air Force contracts worth up to $142.0 million.

Archer is building manufacturing capacity through a completed San Jose, California facility for certification-stage aircraft and a high-volume Covington, Georgia facility targeted for substantial completion of its first phase in 2024, designed for up to 650 aircraft annually and expandable to support over 2,000 aircraft per year long-term, supported by state incentives and a $65.0 million credit agreement with Synovus Bank. Key strategic partnerships include Stellantis, which is collaborating on manufacturing and standing up the Covington facility and has provided strategic funding (with $95.0 million drawn in 2023), and United Airlines, a flagship customer collaborating on commercialization, including announced UAM routes in New York and Chicago. The company operates in an emerging UAM market projected by Morgan Stanley to reach $1 trillion globally by 2040 and $9 trillion by 2050, driven by urbanization and traffic congestion, though market development remains uncertain and dependent on regulatory approval, public acceptance, and infrastructure readiness.

Financially, Archer has not yet generated revenue and reported a net loss of $457.9 million for fiscal year 2023, compared to $317.3 million in 2022, driven by increased research and development expenses ($276.4 million, up 61%) tied to workforce growth, professional services, and warrant-related costs from the Stellantis collaboration, as well as general and administrative expenses of $168.4 million, which included non-cash charges related to agreements with Boeing and Wisk and were partially offset by the reversal of stock-based compensation from a forfeited founder grant. As of December 31, 2023, the company is classified as a large accelerated filer and smaller reporting company, with approximately 272.3 million Class A and 38.3 million Class B shares outstanding as of February 2024, and continues to rely on cash reserves to fund aircraft development, certification, and manufacturing scale-up, with future capital needs dependent on the pace of FAA approvals and production progress.