Stellantis Invests in Air Taxis: A Leap Towards Urban Air Mobility
Stellantis, the European automotive giant behind iconic brands such as Jeep and Maserati, is making a significant foray into the future of urban transportation by investing heavily in Archer Aviation, a startup dedicated to the development of air taxis in the United States.
What Are Air Taxis?
Air taxis refer to small, electric aircraft that can take off and land vertically, much like a helicopter. They are part of a broader category known as eVTOLs (electric Vertical Takeoff and Landing vehicles), designed to provide quick and efficient short-distance travel, particularly within urban areas.
Stellantis' Financial Commitment
Archer Aviation announced that Stellantis has committed up to $370 million to cover essential labor costs associated with ramping up production at their manufacturing facility in Covington, Georgia. This influx of funds will enable Archer to increase production of its flagship eVTOL, the Midnight aircraft, to 650 units annually. The Midnight is renowned for being one of the largest eVTOLs capable of vertical takeoff.
Enhancing Urban Mobility
Archer has unveiled an ambitious plan to establish a network of air taxis across Los Angeles County, including key locations such as Los Angeles International Airport and Long Beach. They are also collaborating with the Los Angeles Rams and the district near SoFI Stadium in Inglewood to develop an exclusive vertiport—a designated location for aircraft landing and takeoff.
Financial Status and Future Prospects
Archer's financial position is bolstered by its existing cash reserves and recent equity capital of $230 million from partners like Stellantis and United Airlines. As Archer's largest shareholder, Stellantis will receive additional shares based on labor costs and future stock prices.
Despite these positives, Archer reported a quarterly loss, causing a decline in its share value by over 9% on Friday, and a year-to-date drop of more than 38%. Nevertheless, CEO Eric Lentell remains optimistic, aiming for commercialization as early as next year.
Growing Order Book
Archer's future looks promising, with its order book expanding to nearly $6 billion, driven by a substantial new contract with Future Flight Global for up to 116 Midnight aircraft, valued at approximately $580 million.
By investing in Archer, Stellantis is not only advancing its stake in the emerging air mobility sector but also paving the way for a future where urban air transportation becomes a viable and widespread reality.
