Archer has hammered out the details of its planned contract manufacturing relationship with automaker Stellantis, which has already poured nearly $300 million into the electric vertical take-off and landing (eVTOL) aircraft company. Stellantis has now pledged more funds to help Archer get its aircraft manufacturing off the ground.
The new funding includes up to approximately $370 million to help cover the anticipated manufacturing labor costs needed to support Archer’s plans to eventually make 650 aircraft annually. In exchange, Stellantis would receive Archer shares on a rolling quarterly basis based on the total labor costs incurred in a particular quarter.
Stellantis will also contribute approximately $20 million to help cover incremental manufacturing capital expenditures for ramping production on Midnight, Archer's first electric aircraft.
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Archer’s goal with this relationship is to incentivize Stellantis to help Archer achieve its planned production ramp and unit cost targets. Therefore, Archer intends to issue Stellantis $30 million of performance warrants that will vest based on Stellantis' achievement of certain performance milestones under the contract manufacturing relationship. Archer’s issuance of any equity to Stellantis pursuant to this contract manufacturing relationship is expected to be subject to approval by Archer’s stockholders.
Archer Secures $230M Of Additional Equity Capital Since The End of Q2
This equity capital consists of the $55 million Archer received from Stellantis on July 1, 2024 under the parties’ strategic funding agreement, as well as a $175 million investment from today that included both institutional investors and long time strategic investors, Stellantis and United. The funds from today’s investment are intended to be used for working capital and general corporate purposes. Moelis & Company LLC acted as exclusive placement agent to Archer on this investment.
Los Angeles Air Taxi Network
Archer unveiled plans for a Los Angeles air taxi network. This planned network includes vertiports at key locations such as Los Angeles International Airport (LAX), Orange County, Santa Monica, Hollywood Burbank, Long Beach and Van Nuys.
As part of its network planning, Archer is coordinating with the Los Angeles Rams to collaborate on potential exclusive vertiports at Woodland Hills and at Hollywood Park, the 300-acre district centered around SoFi Stadium. The University of Southern California is also engaged to be part of Archer’s planned LA network.
Archer’s goal is to begin its LA network operations by as early as 2026.
Midnight Delivery To The United States Air Force
This month, the U.S. Department of Defense accepted the military airworthiness assessment of Archer’s Midnight aircraft, and Archer subsequently delivered Midnight to the U.S. Air Force as part of Archer’s AFWERX Agility Prime contract valued at up to $142 million. Following the recent delivery-in-place handoff at Archer’s flight test facility in Salinas, CA, a team of USAF personnel worked alongside Archer’s flight test team to execute simulated medical evacuation, cargo, intelligence, surveillance and reconnaissance flights with the aircraft.
Nearly $6B Indicative Order Book
Archer announced Future Flight Global, a leader in business aviation and private jet travel, plans to purchase up to 116 Midnight aircraft worth up to $580 million. Future Flight Global has already placed an initial cash deposit and plans to make additional pre-delivery payments to Archer when the parties finalize the definitive aircraft purchase agreement. In aggregate, with this latest announcement, Archer now has nearly $6B in indicative orders with associated pre-delivery payments.
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