Key Points in This Article:
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Archer Aviation’s (ACHR) stock fell hard yesterday and it’s down again today due to Stellantis’ earnings report and a Delaware lawsuit ruling.
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Archer’s Midnight eVTOL is on track for FAA certification by late 2025, with $2 billion in liquidity and a $6 billion order backlog.
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Joby Aviation may lead in certification, but Archer’s lean model and partnerships make it a strong contender in the growing eVTOL market.
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ACHR Loses Altitude
Archer Aviation (NYSE:ACHR) is facing turbulent skies after its stock plummeted 10.9% yesterday and is sliding an additional 5% in morning trading today. The sharp decline follows troubling news from two fronts.
First, Stellantis (NYSE:STLA), a major backer of the electric vertical takeoff and landing (eVTOL) aircraft manufacturer, reported preliminary first-half 2025 earnings showing a $2.68 billion loss. This has raised fears that the automaker might scale back its support for Archer to cut costs. Second, the Delaware Chancery Court just ruled that a shareholder lawsuit related to Archer’s 2021 SPAC merger can proceed, alleging misrepresentation of share value and development progress.
These developments have shaken investor confidence, but do they warrant abandoning Archer’s stock? Despite the short-term turbulence, Archer’s progress in eVTOL development, its commercial launch timeline, and robust financial position suggest a promising long-term outlook.
Progress Toward Commercial Launch
Archer has made significant strides with its Midnight eVTOL, a four-seat, zero-emission aircraft designed for short urban trips. The company secured its Part 135 Air Carrier Certificate in June 2024, a critical step toward commercial operations.
Archer is on track to complete FAA Type Certification later this year, which would enable revenue-generating flights in the United Arab Emirates by late 2025 and in the U.S. by early 2026. Its Georgia manufacturing facility, backed by Stellantis, aims to produce two aircraft per month by the end of 2025, scaling to 650 annually by 2030.
Partnerships with United Airlines (NASDAQ:UAL), which placed a $1 billion order for 200 aircraft, and plans for networks in cities like New York and Los Angeles, underscore Archer’s commercial momentum. Recent test flights in Abu Dhabi and plans to participate in the 2028 Olympics in Los Angeles further bolster its credibility.
In Fine Financial Shape
Archer’s financial foundation is one of the strongest in the eVTOL sector. A capital raise of $850 million in June, combined with existing reserves, gives Archer approximately $2 billion in liquidity. This robust cash position supports its $6 billion order backlog and funds production scaling. would further strengthen its financial runway.
In the first quarter Archer reported a loss of $0.17 per share, but beat analyst expectations of $0.28 per share, reflecting prudent financial management despite being pre-revenue.
Sizing Up ACHR’s Main Competitor
Joby Aviation (NYSE:JOBY) is Archer’s chief rival and is also rapidly advancing. Joby has completed three of five FAA certification stages and is deep into the fourth, giving it a slight lead toward potential 2025 commercial launches in Dubai and the U.S.
Joby’s vertically integrated model — designing and operating its own air taxis, — contrasts with Archer’s capital-efficient approach of outsourcing manufacturing to Stellantis. Joby’s $813 million cash reserve, bolstered by a $250 million invesstment from Toyota (NYSE:TM), supports its $12.8 billion market cap. Toyota’s reputation for quality and engineering expertise gives Joby an edge in reliability, while Stellantis’ financial struggles raise concerns about its commitment to Archer.
However, Joby’s higher capital expenditures may strain its financial runway compared to Archer’s leaner model.
Key Takeaways
The Delaware lawsuit, alleging misrepresentation during Archer’s SPAC merger, poses a short-term risk but is unlikely to derail the company. Such lawsuits are often settled out of court, minimizing any long-term impact.
While Joby may claim first-mover bragging rights, the eVTOL market, projected to grow from $760 million in 2024 to $170.6 billion by 2034, offers ample room for multiple players. Morgan Stanley thinks the U.S. air taxi industry could be worth $1 trillion by 2040 and $9 trillion by 2050.
Archer’s strong liquidity, strategic partnerships, and regulatory progress position it to capture a significant market share. Stellantis’ earnings and the lawsuit are temporary headaches, but Archer’s long-term promise in urban air mobility remains sky-high. Investors with a risk-tolerant outlook should hold steady for the potential upside.
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