Archer Aviation has announced reaching a preliminary agreement with Stellantis, in which the automaker commits to supporting up to $370 million in labor-related costs to support the planned increase in aircraft production by the air taxi manufacturer. This funding will provide Archer with the necessary capital to start production of its flagship aircraft, the Midnight, with a planned capacity of 650 units per year. At the end of June, Archer had cash and cash equivalents totaling $360.4 million.
Archer has reached an agreement on the terms of the contract manufacturing relationship with Stellantis
Archer‘s goal with this relationship is to incentivize Stellantis to achieve planned production and unit cost targets. Therefore, Archer intends to issue $30 million in performance warrants to Stellantis that will vest based on Stellantis achieving certain performance milestones within the contract manufacturing relationship. Any issuance of capital to Stellantis by Archer under this contract manufacturing relationship is expected to be subject to Archer shareholder approval.
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 that included both institutional investors and long-standing strategic investors, Stellantis and United. The investment funds are intended to be used for working capital and general corporate purposes. Moelis & Company LLC acted as the exclusive placement agent for Archer on this investment.
Archer has also unveiled plans for an air taxi network in Los Angeles. This planned network includes vertiports in key locations such as Los Angeles International Airport (LAX), Orange County, Santa Monica, Hollywood Burbank, Long Beach, and Van Nuys.
As part of the network planning, the company is coordinating with the Los Angeles Rams to collaborate on potential exclusive vertiports in Woodland Hills and at Hollywood Park, the 300-acre district centered around SoFi Stadium. The University of Southern California is also committed to being part of Archer’s planned network in Los Angeles.
Adam Goldstein, CEO of Archer, stated: “This has been one of Archer’s most productive quarters to date. From Midnight’s first transition flight, to the progress we’ve made in building high-volume manufacturing facilities alongside Stellantis, to the commercial progress we’re making with Southwest, United, and others, we’re working tirelessly to enable commercial operations worldwide. Our indicative order book now stands at nearly $6 billion. With the additional funding and planned Los Angeles network we’ve announced today, Archer is well-positioned to achieve our goal of commercialization as early as next year.”