Archer Aviation has announced a new agreement with Stellantis, where the automaker will cover up to $370 million of labor-related costs to help Archer ramp up production of its ‘Midnight’ aircraft. This deal is crucial for Archer as it provides access to significant capital, allowing the company to reach its goal of producing 650 units annually.
Key Points:
- Production Support: Stellantis will help fund Archer’s production costs, specifically covering labor expenses up to $370 million.
- Capital Boost: The funding will allow Archer to increase the production of its flagship aircraft, the ‘Midnight’.
- Financial Situation: As of June, Archer had $360.4 million in cash and equivalents. Since then, the company secured an additional $230 million in equity capital, including investments from Stellantis and United Airlines.
- Shares in Exchange: Stellantis, Archer’s largest shareholder, will receive shares in Archer on a rolling quarterly basis, proportional to the labor costs they cover.
Industry Challenges:
- eVTOL Sector: The electric vertical take-off and landing (eVTOL) aircraft industry faces significant hurdles, including battery and infrastructure challenges.
- Certification Delays: Despite progress, the industry is still awaiting certification to carry passengers in the U.S.