Archer Aviation: I Remain Bullish on Urban Air Mobility’s Pioneering Play

Archer Aviation (NASDAQ: ACVA) is a company operating at the intersection of innovation and patience—a rare combination in the high-stakes world of aviation startups. Despite the challenges of building a new category of transportation from scratch, Archer’s recent progress in certification, partnerships, and financial resilience has solidified its position as a leader in the urban air mobility (UAM) space. Here’s why investors should remain bullish.

The FAA Milestones: Progress, Not Perfection

Archer’s Midnight aircraft is designed to be a game-changer: a six-seat eVTOL (electric vertical takeoff and landing) aircraft with zero emissions and a 60-mile range. While full FAA certification isn’t expected until late 2025, the company has made critical strides:
- Production Ramp-Up: The first Midnight aircraft began assembly in Georgia, with plans to build 10 units in 2025. This includes “Launch Edition” models for early commercial deployments.
- Defense Diversification: A hybrid VTOL aircraft developed with Anduril Industries for military use is advancing swiftly, with demand exceeding expectations. This partnership is a crucial hedge against UAM’s regulatory uncertainties, as defense contracts don’t require FAA approval.

The defense angle is often overlooked but transformative. With governments prioritizing advanced logistics and surveillance, Archer’s ability to capture this market could provide immediate revenue streams while UAM matures.

Partnerships: Global Reach and Scalability

Archer’s Q1 2025 updates revealed partnerships that signal a shift from concept to execution:
1. Abu Dhabi Aviation (ADA): The first “Launch Edition” customer, ADA will deploy Midnight aircraft by late 2025, backed by Archer’s operational support.
2. Ethiopian Airlines: A $30 million deal secures Ethiopia as a gateway to Africa’s UAM market, a region with growing urbanization and infrastructure gaps.
3. United Airlines: A collaboration to transform NYC’s air travel, reducing Manhattan-to-airport trips to 5–15 minutes. This leverages existing infrastructure (e.g., helipads), reducing upfront costs.
4. Palantir Technologies: Integration of AI tools (Foundry and AIP) aims to slash production inefficiencies, a critical step toward scaling.

These partnerships aren’t just about brand names—they’re about access to capital, expertise, and regulatory pathways. For instance, United’s involvement signals buy-in from a major player in traditional aviation, a vote of confidence in Archer’s vision.

Financial Fortitude: Liquidity and Discipline

Critics often cite Archer’s pre-revenue status and losses. But context matters:
- Liquidity: With over $1 billion in cash (including a $302 million February equity raise), Archer can fund operations through 2026. This is critical as it scales production and awaits certification.
- Cost Controls: Q4 2024 non-GAAP operating expenses stayed flat at $98.3 million, despite ramping up production. The company has prioritized “no unnecessary spending,” a stark contrast to peers that have burned through capital.
- Adjusted EBITDA Guidance: A loss of $95–110 million for Q1 2025 aligns with expectations, reflecting the costs of progress rather than mismanagement.

Near-Term Catalysts: The Q1 Earnings Crucible

The May 8 earnings report will be pivotal. Key metrics to watch:
- Production Targets: Confirmation of 10 aircraft built by year-end.
- FAA Updates: Details on flight testing and compliance progress.
- Defense Demand: Orders from Anduril’s military programs could provide a revenue surprise.

A strong earnings report could catalyze a re-rating of the stock, especially if Archer’s defense traction validates its dual-track strategy.

The $1.5 Trillion Prize and Archer’s Play

The global UAM market is projected to hit $1.5 trillion by 2040, with demand driven by urban congestion and decarbonization mandates. Archer’s first-mover advantage is clear:
- First to Market: Its partnerships with ADA and Ethiopian Airlines position it to claim early share in high-growth regions.
- Technological Edge: Midnight’s range and passenger capacity outperform many competitors, a key differentiator as cities prioritize practicality.

Conclusion: A Structural Bull Case

Archer Aviation is not a get-rich-quick story—it’s a long-term bet on a structural shift in transportation. The data supports a bullish stance:
- Liquidity: $1 billion+ in cash gives it runway to navigate regulatory hurdles.
- Partnerships: $30M+ in signed deals validate market demand.
- Defense Diversification: A non-FAA-dependent revenue stream reduces execution risk.
- Market Potential: The $1.5 trillion UAM opportunity is real, and Archer is among the few with both the product and partnerships to capitalize.

While risks remain—regulatory delays, competition, and execution—the progress in Q1 2025 underscores Archer’s capability to transform ambition into reality. For investors with a multi-year horizon, this is a compelling call to stake a claim in the sky.

This analysis is based on Archer Aviation’s public disclosures and industry data up to April 2025.