Fresh into the new year, Archer Aviation has announced a further deepening of its partnership with Stellantis. The automotive giant will take an equity share in the Advanced Air Mobility start-up and also join forces to manufacture the Midnight eVTOL, the two companies announced on January 4. Archer deepens relationship with automotive powerhouse Stellantis.
Stellantis is the parent company and brand of the automotive group that includes FIAT, Alfa Romeo, Opel, Peugeot, Citroën, Chrysler, Dodge, Jeep, and a few more smaller makes. While building cars now, including many electric models, Stellantis aspires to become a major mobility tech company. The company reported pro forma revenues of €152 billion in 2021 and a net operating profit of €13.4 billion.
In line with its strategy, Stellantis – under its previous name of FIAT Chrysler Automobiles US – entered a collaboration agreement with Archer in November 2020 that included the issuance of a common stock warrant to FCA. This was followed by a manufacturing consulting agreement with FCA Italy in July 2021 that covers the design, development, and production start, but also includes a warrant. Stellantis also has a member on the Archer Board of Directors with Barbara Pilarski.
Today, Stellantis said it is providing $150 million in equity capital for a potential draw by Archer in 2023 or 2024. This is subject to Archer meeting certain business objectives this year. Stellantis intends to increase its strategic shareholding by purchasing more Archer shares on the open stock market in the future, making Archer a long-term investment proposition.
Stellantis CEO Carlos Tavares, who was on the Airbus Board of Directors until 2022, said in a media statement that his company has worked closely with Archer in the past two years. “Deepening our partnership with Archer as a strategic investor with plans for growing our shareholding demonstrates how Stellantis is pushing the boundaries to provide sustainable freedom of mobility, from the road to the sky. Supporting Archer with our manufacturing expertise is another example of how Stellantis will lead the way the world moves.”
Pivotal moment
For Archer, the strategic partnership with Stellantis comes at a pivotal moment. The US company unveiled the Midnight eVTOL on November 17, which will be the first production version of its electric ‘flying taxi’. Archer plans to certify the Midnight in the second half of 2024, so it can enter service in 2025. The Midnight is a four-seater vehicle, plus the pilot. It is powered by twelve electric motors that are fitted on a fixed wing, with the front motors able to tilt for forward motion. Midnight’s predecessor, the Maker, made its first transition flight on November 29.
During its Open House presentation in November, Archer said it plans to scale up production between 2024 and 2028 to 2.000 Midnights per year. Even for the best start-up or any aircraft manufacturer, this would be a huge undertaking that requires deep inside knowledge of mass production. This is where Stellantis comes in, which offers that knowledge of producing cars in big volumes. Stellantis will contribute with advanced manufacturing technology and expertise from specialized personnel. “The goal is for Stellantis to mass produce Archer’s eVTOL aircraft as its exclusive contract manufacturer.”
Archer announced in November that it selected a site in Covington (Georgia) for its manufacturing plant, which should be ready for production in early 2024. The plant should be capable of producing 650 vehicles per year in its initial, 350.000 square feet format, but this should grow to 2.300 per year after an extension of another 550.000 square feet later on.
“Let’s be clear though, this isn’t just an announcement about manufacturing. This is an announcement about Stellantis’ continued commitment to pushing the boundaries of mobility, helping lead the world into a new chapter of air travel,” Archer CEO and founder, Adam Goldstein, said on LinkedIn.
Logical combination
The combination of an eVTOL and a car manufacturer is a very logical one. As David Ziegler, Vice President of Industry Aerospace and Defense of Dassault Systems, told AirInsight last July, the rates at which Eve, Vertical Aerospace, or Archer intend to build their eVTOLs are more alike to the automotive industry than to aircraft manufacturing.
“It’s about rate, rate, rate. They need to get these products out of the door. In aerospace, it’s a much lower series, but the eVTOL is right in the middle. Production volumes are going to be much up,” said Ziegler. Dassault Systems is a partner of Vertical Aerospace and advises them on their manufacturing strategy.
