When air taxi company Archer Aviation released its quarterly financial results Thursday, it trumpeted a deal that settled a lawsuit with Boeing’s air taxi subsidiary Wisk and brought Boeing in as an investor.
The deal, packaged with news of $145 million in new funding and plans to start flight tests of its Midnight production aircraft and to enter service as soon as 2025, sent Archer’s stock up 17% in after-hours trading.
While the end to the litigation is clearly good news for both sides, the details of the settlement suggest Boeing got more out of it than Archer.
The amount Boeing is investing in Archer was undisclosed. However, the list of investors is topped by automotive giant Stellantis and followed by United Airlines, which added $25 million to a prior investment. Boeing’s investment, listed in the news release after these two, is presumably less.
And crucially, that Boeing money can be used for one purpose only: to pay Wisk for its autonomous flight technology when Archer is ready to make its air taxis capable of flying without pilots.
“That’s what it’s earmarked for,” Archer founder and CEO Adam Goldstein said in an interview.
Archer won’t attempt pilotless planes before 2028, but when it does, Boeing will benefit from its own investment.
In the meantime, Archer’s financial filing Thursday shows it is separately granting Boeing $25 million in shares immediately and more shares later worth up to $48 million depending on some undisclosed performance milestones.
Goldstein said the $25 million vests immediately, and the rest doesn’t vest until certain conditions are met.
The leaders at Wisk and Archer each welcomed the deal as good for both companies.
Wisk CEO Brian Yutko said he’s “really excited about our collaborative and productive resolution with Archer.”
“Both win here, it’s a great outcome,” Archer’s Goldstein said.
Yet all the money in the deal seems to go to Wisk and Boeing, some now and more later. And Boeing also gets the exclusive first right in the future to license Wisk’s autonomous flight technology to Archer.
Archer’s share price fell back Friday to where it had been before the announcement.
The air taxi race
Air taxis, also known as Electric Vertical Take-Off and Landing aircraft, or EVTOL, are being developed by multiple startups around the world as a clean form of air travel to carry two to four passengers on short hops across cities.
Think Manhattan to JFK airport, where ground transportation can take hours and an air taxi could fly it in minutes. The target is for fares similar to Uber on the ground, though it’s unclear if that will be possible.
Archer, based in San Jose, Calif., is one of two leading candidates in the U.S. aiming to be first to get air taxis into service.
Industry experts consider Joby, founded in 2009 and based in Santa Cruz, Calif., to be well ahead of all rivals in terms of EVTOL technology testing and development. It’s backed by Toyota among others.
Yet Goldstein, who founded Archer in 2018, has it on an expedited development schedule.
He has about 650 employees and has accumulated investment of $1.1 billion to date.
Stellantis, the automotive giant formed in 2021 that includes the Chrysler, Fiat and Peugeot brands, is a major backer. On Thursday, Archer announced that in addition to the $145 million it has secured in new funding, Stellantis has accelerated $70 million in previously committed funding
In 2021, Wisk sued Archer, alleging it had poached its engineers who then developed the airframe of Archer’s aircraft, which was very similar to Wisk’s. Archer countersued alleging a smear campaign by Wisk.
Earlier this year, Boeing, which had invested in Wisk, bought out its partner to own Wisk completely — hence Thursday’s settlement being with Boeing.
Archer’s fast trajectory
Goldstein admits that Archer’s proposed timeline is “definitely fast and aggressive.”
Multiple technical and regulatory milestones have to be achieved to enter service carrying passengers.
The aircraft is lifted vertically by a series of small rotors on the wings. As it transitions to fly horizontally — the hardest part of the flight to get technically right — the rotors on the leading edge tilt to point forward like propellers.
It was only late last year that Archer successfully completed a full transition from vertical to horizontal flight. That was accomplished on its prototype aircraft, known as Maker, without anyone on board.
Goldstein said Friday the first unpiloted flight of the follow-on production aircraft Midnight will happen “in the coming weeks.”
“You’ll see the unmanned ones first,” he said. “Then ultimately up to the piloted ones next year.”
He said Archer’s goal is to begin piloted test flights of Midnight early next year and to have it certified by the Federal Aviation Administration and in passenger service in 2025.
Boeing, which has spent years certifying its various 737 MAX models and is still not finished, could only dream of such a fast timeline.
And skipping over the regulatory requirements for commercial air service, Goldstein said Archer will deliver one of its aircraft to the Air Force for evaluation later this year.
The military wants to assess the possibility of using EVTOL aircraft instead of helicopters — not in combat, but for uses such as transporting high-ranking officers or supply chain logistics.
The Air Force has granted Archer an initial $1.2 million in fiscal year 2023 for this development work, with a potential total of $145 million for Archer if the work proceeds in the years to follow.
Flying without pilots
The key difference between Boeing’s Wisk and the other air taxi contenders is that it is planning for autonomous flight from the get-go: When it enters service, Wisk’s aircraft will take off, fly to its destination on a preordained track, and land — all without a pilot.
Based in Mountain View, Calif., Wisk is currently building its sixth-generation model that will be the production version of its air taxi.
“We’re building Gen 6, which will be the first certified autonomous airplane,” Yutko said.
However, with that ambitious agenda, Wisk doesn’t expect to enter passenger service anytime before 2028.
All the other air taxi startups plan a piloted version first, though it’s generally accepted that to make the service economically viable, they will eventually have to introduce autonomous flight technology, too.
Yutko said autonomy is key to scaling up air taxi operations, and Archer agrees.
“We’re going to go to market with the piloted vehicle, but the long-term vision of the industry will ultimately go toward autonomy,” Goldstein said.
That’s why the collaboration deal with Wisk makes sense, he said.
Wisk is “very far ahead in the industry on autonomy,” Goldstein said. “Think about how hard that is to figure out how to do that. That is potentially many, many years, potentially decades, lots of money.”
“For Archer to deploy it successfully as a customer, I think it would be a massive win for Boeing,” he added.
Still, while the collaboration deal gives Boeing first dibs on providing such technology to Archer, it will have the option to share as much or as little as it wishes to preserve Wisk’s competitive role.
Goldstein is confident in Archer’s high-speed trajectory.
“We’ve hit the milestones we put out there,” he said. “We’ll keep our heads down and keep building for the future.”
If Archer succeeds, Boeing and Wisk will win, too. Meanwhile, Wisk will follow its own goals.