AMSTERDAM & SANTA CLARA, Calif. - Stellantis (LON:0QXR) N.V. (NYSE: NYSE:STLA) and electric vertical takeoff and landing (eVTOL) aircraft leader Archer Aviation Inc. (NYSE: NYSE:ACHR) announced an additional $55 million investment by Stellantis. This funding, part of a strategic agreement, follows Archer's recent transition flight test milestone.
The new investment adds to the $39 million in Archer stock Stellantis purchased on the open market earlier this year and the $110 million invested in 2023. Stellantis, a major automaker, has been a key partner to Archer since 2020, contributing manufacturing expertise and capital to support Archer's eVTOL development.
Archer is progressing with its manufacturing facility in Covington, GA, expected to be completed this year. The 350,000 square foot facility, situated on a 100-acre site, aims to produce up to 650 aircraft annually, potentially making it one of the industry's largest by volume. Stellantis is set to play a vital role as Archer's contract manufacturer.
Stellantis CEO Carlos Tavares expressed enthusiasm for the partnership's progress, emphasizing the shared vision for expanding mobility beyond current limitations. Adam Goldstein, CEO of Archer, echoed this sentiment, highlighting the collaboration's potential to transform urban transportation by providing efficient access to urban areas through eVTOL technology.
Archer's eVTOL aircraft, Midnight, is designed to offer a sustainable, low-noise alternative to traditional commutes, with the capability to perform rapid, back-to-back flights with minimal charge time.
Stellantis aims to become a carbon net zero mobility tech company by 2038, as outlined in its Dare Forward 2030 strategic plan. The partnership with Archer aligns with this vision, potentially contributing to a shift in urban travel dynamics.
The information for this article is based on a press release statement.
"In other recent news, Archer Aviation Inc. has made significant strides in the aviation industry. The company's Midnight eVTOL aircraft successfully completed a key transition flight, marking a substantial step towards commercial viability.
Archer Aviation also received its Part 135 Air Carrier & Operator Certificate from the Federal Aviation Administration (FAA), a crucial regulatory milestone that allows the company to commence commercial operations.
In financial developments, Archer reported a robust first quarter in 2024, exceeding flight test goals for its Midnight aircraft, and maintaining strong liquidity of approximately $523 million. Canaccord Genuity maintained a Buy rating on Archer Aviation, highlighting the company's international expansion and business model.
Archer also announced a joint venture with KakaoMobility, a leading taxi-hailing and ridesharing platform in Korea. The partnership aims to integrate Archer's Midnight aircraft into Kakao T for air taxi flights starting in 2026.
These are part of Archer's ongoing collaboration with the FAA and its progress towards introducing innovative urban air mobility solutions. The FAA has issued the final airworthiness criteria for Archer's Midnight aircraft, a necessary step towards achieving Type Certification for the eVTOL model."
InvestingPro Insights
As Stellantis deepens its investment in Archer Aviation Inc. (NYSE: ACHR), investors and industry observers are closely monitoring the eVTOL leader's financial health and market performance. According to recent data from InvestingPro, Archer Aviation holds a market capitalization of $1.11 billion, reflecting investor sentiment and the company's perceived value in the burgeoning urban air mobility market.
The company's financial metrics, however, show signs of the challenges it faces. Archer's price-to-earnings (P/E) ratio stands at -0.22, indicating that the company is currently not profitable. This aligns with an InvestingPro Tip that analysts do not expect Archer to be profitable this year. Moreover, the price-to-book ratio of 2.92 suggests that the stock is trading at almost three times the company's book value, which can be a point of scrutiny for value-focused investors.
Despite the long-term potential of eVTOL technology, Archer's short-term market performance has been volatile. The six-month price total return is at -41.14%, highlighting significant downward pressure on the stock price. This trend is further emphasized by an InvestingPro Tip noting that the stock has suffered a substantial decline over the past three months.
Investors considering Archer's stock may find value in the additional 10 InvestingPro Tips available, which provide deeper insights into the company's financials and market status. To access these tips and more comprehensive analysis, visit https://www.investing.com/pro/ACHR and use the coupon code PRONEWS24 to get up to 10% off a yearly Pro and a yearly or biyearly Pro+ subscription.
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