Key Points in This Article:
Archer Aviation (ACHR) leverages Stellantis’ (STLA) $254 million investment and manufacturing expertise, positioning it for eVTOL commercialization by late 2025.
Stellantis’ 2.5 billion euro first-half 2025 loss and hydrogen program cancellation reflect a shift to high-return ventures like Archer’s eVTOLs.
Archer’s funding is unlikely to be cut, given the eVTOL market’s growth potential versus hydrogen’s limited traction.
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Archer’s Ascent and Stellantis’ Support
Archer Aviation (NYSE:ACHR) is pioneering electric vertical takeoff and landing (eVTOL) aircraft with its Midnight model, designed for eco-friendly urban air taxi services. With a $6 billion order book and $1.03 billion in cash, Archer is on track for commercial operations later this year, bolstered by partnerships with United Airlines (NASDAQ:UAL), Palantir Technologies (NASDAQ:PLTR), and Stellantis (NYSE:STLA).
Since 2021, Stellantis has been a key ally, investing over $254 million, including a recent $55 million infusion tied to Archer’s flight test milestone, and providing manufacturing expertise to scale production at Archer’s Georgia facility, aiming the produce 650 aircraft annually by 2030. This collaboration has accelerated Archer’s path to FAA certification and strengthened its market position.
However, Stellantis announced last week it is discontinuing its hydrogen fuel cell vehicle program after reporting preliminary first-half 2025 results that missed expectations, projecting a 2.5 billion euro ($2.7 billion) loss. Does this mean Archer’s funding from Stellantis could also be at risk?
Stellantis’ Hydrogen Program Shutdown
Stellantis’ decision to terminate its hydrogen fuel cell technology program is in keeping with its Dare Forward 2030 strategy for carbon neutrality by 2038. The company cited high development costs, limited hydrogen refueling infrastructure, and weak market demand as reasons for the cut.
Hydrogen vehicles, despite their zero-emission potential, have lagged behind battery-electric vehicles due to scalability challenges and insufficient infrastructure investment. Stellantis, which had explored hydrogen for commercial vans, has shifted its focus to electrification and advanced mobility solutions like eVTOLs, aiming to prioritize technologies with stronger market potential and better returns.
Earnings Miss Shakes Confidence
At the same time, Stellantis’ also reported preliminary first-half 2025 results, revealing hefty losses that were driven by a 15% drop in vehicle shipments, restructuring costs in the U.S., and new tariffs on Chinese-made electric vehicles.
This significant miss, compared to analyst expectations of a 6.7 billion euro adjusted operating profit, led to a 12% stock price plunge. The financial strain, particularly in North America, prompted Stellantis to reassess its investment priorities, culminating in the hydrogen program’s cancellation.
Despite these challenges, Stellantis emphasized its commitment to strategic partnerships and electrification, signaling that high-potential ventures like Archer remain integral to its long-term vision.
Stellantis’ Robust Support for Archer
Stellantis’ partnership with Archer goes beyond financial backing, leveraging its automotive manufacturing expertise to streamline eVTOL production. Since 2020, Stellantis has provided supply chain support, design expertise, and personnel, saving Archer significant capital costs.
In 2023, Stellantis became Archer’s exclusive contract manufacturer for the Midnight aircraft, reinforcing its commitment with investments like $39 million in stock purchases and $55 million post-flight test milestones.
This support has helped drive ACHR stock up 34% in 2025, giving the company an $8.3 billion market cap and a Strong Buy rating from Wall Street, and positioning Archer as a leader in the eVTOL market with strong commercial prospects.
Key Takeaway
Stellantis’ hydrogen program, plagued by market and infrastructure hurdles, lacked the near-term return on investment potential of Archer’s eVTOL initiative, which is nearing commercialization with robust demand from partners like United Airlines.
The eVTOL market, projected to outpace automotive growth, benefits from Archer’s $1.03 billion liquidity and regulatory progress. Despite Stellantis’ 2.5 billion euro loss, its strategic focus on electrification and high-growth mobility solutions suggests Archer’s funding is safe.
Investments in Archer are poised to yield significant returns as urban air mobility takes off, making ACHR one of the promising eVTOL stocks to own today.
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