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A startup working on bringing air taxis to cities in the U.S. is getting another round of major funding commitments from Stellantis, the European company behind brands like Jeep and Maserati.
Archer Aviation on Thursday said Stellantis had agreed to fund up to $370 million of the necessary labor costs needed to support its planned manufacturing ramp up in Covington, Georgia. The funding will give Archer the necessary cash it needs to boost production of its flagship Midnight aircraft to 650 units each year.
Archer says the Midnight is the largest electric vertical takeoff and landing (eVTOL) aircraft that has taken off from the ground vertically, like a helicopter. The firm on Thursday revealed plans for a network of air taxis that would provide travel across Los Angeles County in California. It would include stops at Los Angeles International Airport and Long Beach, among other locations. Archer is also working with the Los Angeles Rams and the district near Inglewood’s SoFI Stadium on an exclusive vertiport.
The company had cash and cash equivalents of $360.4 million at the end of June. Since then, Archer has received an additional $230 million of equity capital from firms like Stellantis and United Airlines.
Stellantis is Archer’s largest shareholder and will receive more shares on a rolling quarterly basis based on the total labor costs it takes each quarter, as well as the firm’s future stock price. Archer plans to issue Stellantis $30 million of performance warrants that will vest based on the performance of their manufacturing deal.
“Together, our teams have been hard at work constructing our high volume manufacturing facility, which we anticipate completing by the end of this year,” Arhcer CEO Eric Lentell said during an earnings call. “We always envisioned a future where Stellantis would spearhead manufacturing, allowing Archer to focus on designing, engineering, and bringing to market the best aircraft possible.”
Although shares grew Thursday on the partnership with Stellantis, investors’ enthusiasm was soured after Archer reported another quarterly loss. Archer shares are down more than 9% in trading Friday and have fallen by more than 38% year-to-date.
Lentell said in a statement that Archer “is well positioned to meet our goal of commercialization as early as next year.”The company said its order book has grown to almost $6 billion, thanks to a new contract with Future Flight Global to buy up to 116 Archer Midnight aircraft in a contract worth as much as $580 million.