Archer Aviation is close to debuting its electric air taxi for short-haul flights.
It’s spending billions of dollars building out manufacturing and airport infrastructure.
The stock looks overvalued and risky to buy now given that it generates zero revenue today.
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Efficiencies in battery technology are enabling massive transportation innovations, and not just with electric vehicles. Start-ups such as Archer Aviation (NYSE: ACHR) have developed electric air taxis, otherwise known as electric vertical takeoff and landing vehicles (eVTOLs).
With taxis under testing and the promise to bring a new form of urban transportation to market, Archer’s stock has soared, up close to 300% in the last three years alone. Today, the stock has fallen 38% from all-time highs, likely due to simple market volatility for high-growth stocks.
Does this stock price pullback make Archer Aviation a once-in-a-decade buying opportunity in 2026? The answer may surprise you.
Everyone can agree that electric air taxis like Archer Aviation’s Midnight are an innovative new mode of transportation. The Midnight can fit four passengers and is targeting 50-mile or less rides that usually take a driver an hour or more in traffic. Electric air taxis can transport customers over cities to these point-to-point helipads in less than 10 minutes.
With 4.7 billion hours spent in traffic in the United States every year, there is a huge market opportunity for electric air taxis, especially for wealthier individuals willing to pay up for tickets. Even if just a small percentage of cars get pulled off the roads, it could help alleviate traffic pains for all travelers.
The problem is, Archer Aviation’s Midnight vehicle has not been fully authorized by the Federal Aviation Authority (FAA) yet to operate commercial flights in the United States. Until this happens, all the company can do is build aircraft, test its vehicles, and set up its point-to-point airports for its air taxi network.
Simultaneously building out aviation infrastructure, air taxis, and going through the FAA approval process is expensive, requiring Archer Aviation to spend a lot of money up front in order to execute its business plan. The company has raised billions of dollars through common stock offerings, which have been highly dilutive to shareholders. It currently has over $1 billion in cash on the balance sheet.
Hopefully, commercial viability is near, although FAA timelines are always uncertain. Archer just bought a stake in the Hawthorne airport in Los Angeles as a hub for its taxi network, working with airline partners, the Los Angeles Rams, and other key commercial partners in the city. Plans call for networks in New York City as well as internationally in the Middle East, Japan, and South Korea.
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