2024-05-23 06:18:22 ET
Summary
- Archer Aviation is a developer of eVTOL aircraft that plans to sell aircraft and operate an Urban Air Mobility service.
- The UAM market is expected to grow rapidly due to increased traffic congestion and the introduction of eVTOLs.
- Archer faces a range of challenges, of which certification and cash burn are paramount at the moment.
- While Archer's share price is down significantly from its peak, the company's market capitalization is still relatively high given the uncertainty the business faces.
Archer Aviation ( ACHR ) is a developer of eVTOL aircraft that plans to both sell aircraft and operate an Urban Air Mobility service. The company is currently progressing through regulatory approvals and hopes to begin commercializing its aircraft within the next few years.
While UAM has been posited as an enormous market that will offer winners a large amount of success, there are questions around aircraft performance, costs, safety, supply scalability and demand. I believe that the lower noise levels created by eVTOL will expand the UAM market, but I think that the market will ultimately prove to be much smaller than many expect. In addition, competition is likely to be fierce, which may limit the value captured by companies like Archer....
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Archer Aviation: Inflated Expectations Create Risk Of Crash Landing