Investors of Archer Aviation are abuzz with excitement as the flying car start-up recently sealed a deal with NASA. This collaboration aims to drive the advancement of mission-critical electric vertical take-off and landing (eVTOL) aircraft technologies. The development of eVTOLs holds the potential to revolutionize transportation by paving the way for affordable and efficient flying taxis or flying cars.
One key area of focus in this partnership is the advancement of battery technology, which is vital for the success of eVTOLs. Archer and NASA are working hand in hand to enhance battery cell performance and safety, recognizing that improvements in battery technology are crucial for eVTOLs to reach their full potential. Currently, the limited range, weight, and cost of batteries pose significant challenges to the widespread adoption of eVTOLs.
To overcome these hurdles, Archer is actively exploring battery solutions used in electric vehicles (EVs). Elon Musk, CEO of Tesla, has previously emphasized that achieving a battery energy density of 400 watt-hours per kilogram is essential for the viability of longer-range electric planes. Presently, high-end lithium-ion batteries offer an energy density of approximately 200 watt-hours per kilogram.
Notably, while Archer’s collaboration with NASA is commendable, it does not involve financial support from the space agency. Archer has chosen not to disclose the specific lithium-ion battery chemistry employed in their eVTOLs. Nevertheless, the company’s first aircraft under development, named Midnight, promises to be a significant milestone in their journey.
This recent development has had a positive impact on Archer Aviation’s stock performance. On Monday, share prices rose by 3.2% to $5.ww. In comparison, the S&P 500 and Nasdaq Composite experienced relatively smaller gains of 0.3% and 0.4%, respectively.
Archer’s journey has been an exhilarating one for investors. After undergoing a SPAC merger in 2021, with shares valued at $10 each, the company’s stock experienced significant volatility. Share prices dipped below $2 in December 2022 but closed out 2023 at $6.14.
At present, Archer has a market capitalization of approximately $1.7 billion, and Wall Street analysts do not anticipate substantial sales until 2026. Generating positive free cash flow will take even longer. The company recognizes the need for extensive development and collaboration, such as its partnership with NASA, to make Midnight eVTOLs a common sight in the sky.