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On Wednesday, 12 March 2025, Archer Aviation (NYSE: ACHR) showcased its strategic vision at the J.P. Morgan Industrials Conference 2025. The company is committed to transforming aviation into an electric, affordable, and accessible mode of transportation. While Archer’s ambitious plans include expanding into the UAE and operationalizing its Georgia factory, challenges remain in regulatory landscapes and competition.
Key Takeaways
- Archer plans to launch in Abu Dhabi later this year, partnering with Abu Dhabi Aviation.
- The ARC factory in Georgia aims to produce up to 10 aircraft this year, with future capacity for 650 to 2,000 aircraft annually.
- Partnerships with major airlines and defense collaborations with Anduril are crucial to Archer’s strategy.
- Archer’s cost per mile is projected to be comparable to Uber Black, with a focus on premium travel.
- Despite FAA certification challenges, Archer has diversified revenue pathways.
Financial Results
- Order Book: $6 billion
- Potential Gross Margin: 50%
- Capital Raised: $300 million earlier this year
- Manufacturing Capacity: Initial production of 10 aircraft this year, with plans for 650 annually, potentially expanding to 2,000
- Cost Structure: Operating costs projected at $4 to $5 per mile
Operational Updates
- Launch Edition Program: Offers customers 2-3 aircraft for service simulation, aiming for self-sufficiency in 18-24 months
- UAE Launch: Supported by sovereign wealth funds and the royal family, with pilot training in partnership with Etihad
- US Operations: Utilizing existing infrastructure and partnerships to electrify FBOs
- Regulatory Landscape: Progress with FAA, GCAA, and other international bodies for eVTOL certification
Future Outlook
- Strategic Plans: Launch in Abu Dhabi, operationalize the Georgia factory, and expand production capacity
- Military Application: Collaboration with Anduril on a hybrid electric variant of Midnight aircraft
- Pilot Training: Establishing a training academy in partnership with United’s Aviate
Q&A Highlights
- Airline Integration: eVTOL as a premium travel differentiator, comparable to Uber Black costs
- Certification: Initial operations from vertiport to vertiport, with future expansion to private properties
In conclusion, Archer Aviation’s presentation at the J.P. Morgan Industrials Conference 2025 highlights its innovative approach to electric aviation. For more details, readers are encouraged to refer to the full transcript provided below.
Full transcript - J.P. Morgan Industrials Conference 2025:
Unidentified speaker, Host, JPMorgan: Good afternoon, and welcome to the second day of JPMorgan’s industrial conference. And, I think this is the second maybe third year in a row we’ve had Archer here, second in a row for you coming, Nikhil. So we have Nikhil Goel, chief commercial officer, if I have that right. He’s gonna pitch it for Adam Goldstein, who couldn’t make it, unfortunately.
But first of all, thanks for supporting the conference again. We’ve really tried to prioritize a lot of these emerging flying car companies if you kind of use the parlance, so called eVTOL. Maybe first of all, starting off, I think, you can perhaps help us understand the high level strategy of the company. If there’s any key takeaways from the recent quarter, feel free to do that. But maybe high level strategy, I’m sure we’ll double click on a number of things before we, throughout the conference and then we’ll let the audience ask questions as well.
Nikhil Goel, Chief Commercial Officer, Archer: Look, overall, Adam founded the company to really build the future of aviation. To us, that means building a future where aviation is ubiquitous, and it’s electric and it’s affordable and accessible to move people and goods from A to B. And so that’s really what Archer’s mission on earth is. We have three lines of business, we sort of talked about in our last quarterly earnings report. The first one is commercial.
So we are building Midnight, which is our commercial air taxi. It seats four passengers and a pilot, and it allows you to take commutes that could be an hour or longer and turn them into minutes in some of the largest cities in the world. We have a military business, so we’ve launched Archer Defense in partnership with Anduril. That’s building a variant of that Midnight product that will be hybrid and autonomous for very specific military purposes. And then we have a software platform that underlies both of those divisions.
And so that is what we’ve been building. What we talked about in our earnings report was probably the biggest focus was around launch. We announced our intent to launch as soon as this year in The UAE, specifically in Abu Dhabi. And we announced the formation of a program that we call Launch Edition. So, essentially, it’s how we think about launching the first dozen or so aircraft in cities all over the world.
And we announced our first partner for that, which is Abu Dhabi Aviation. It’s one of the largest helicopter operators in the world. It’s co owned by Mubadala and ADQ. They have agreed to be our first sort of customers for this launch edition aircraft. So what they’ll do is they’ll take two aircrafts and work with us to launch in coordination with the government, in coordination with the regulators in The UAE, hopefully by the end of this year.
That’s what we’re targeting. And so that was sort of the biggest announcement. The second piece of that was, our ARC factory in Covington, Georgia, which is sort of now shifting from construction to operationalizing, where we’re again, the goal is to build up to 10 aircraft this year. And so, you know, overall, we’re really excited to have dozens of customers all over the world that are excited to launch Midnight. And then as I mentioned, the goal is to to launch this year in The UAE.
Unidentified speaker, Host, JPMorgan: So we have a total of five companies in the eVTOL slash UAM space here at the conference. How do you view the global competitive landscape in the space? And look, we’ve seen Archer come out at the beginning, talking about owner operator model. It’s kind of feels like shifting more to OEM, but I don’t know if origin or not. How do you see the landscape or where does Archer fit in that?
Nikhil Goel, Chief Commercial Officer, Archer: Yes. I think there are a couple of things. One is from the outset, we’ve I think we’ve been pretty consistent that our primary goal is to sell aircraft. This was back in, I think, 2020 when we announced our first sale to United, sale of up to $1,500,000,000 worth of aircraft. Since then, we’ve brought on a number of airline partners across the world.
So Southwest, Etihad, Japan Airlines and Indigo, which is the third largest airline in the world and the market leader in India. And so we’ve been able to assemble a very, very strong collection of customer partners that we’ll go launch with. But then from a landscape perspective, on the air taxi side, so the commercial side that I mentioned at the outset, what I think we have seen is that this business is very, very capital intensive. Just yesterday, Adam posted online around how the challenges of raising capital in this industry have started to really cause some consolidation. That’s what’s led us to open, for example, Archer, Germany, where we were able to bring on some rock stars from William,
Unidentified speaker, Host, JPMorgan: one
Nikhil Goel, Chief Commercial Officer, Archer: of the players that used to be out there. And so we’ve been able to build that team over time as the industry sort of begins to consolidate. We see a couple of big players still off in the air taxi market. I think the most prominent is Joby, who has built a really phenomenal product as well. And then on the military side, to my knowledge, we are the only ones out there pursuing a real program of record, especially in the way that we are with our partner, Zandral.
And so we don’t see any competition on the defense side for eVTOL. And we’re grateful to be in a place where we’ve got a phenomenal partner. We’ve got a phenomenal team building sort of a variant of the Midnight product that we’ve already produced.
Unidentified speaker, Host, JPMorgan: I wanted to talk about the current regulatory landscape and touch upon the FAA in The U. S. As well as GCAA in The Middle East, maybe even EASA too. You just mentioned Archer, Germany now. So I guess how should we think about what appears to be an FAA maybe pause versus maybe GCAA, which appears to be a bit more aggressive?
I mean, how should we think about the timeline for certification across these various regions and across these various regions and maybe differences between the certification processes, if any?
Nikhil Goel, Chief Commercial Officer, Archer: Yes. Well, look, I think that one large misunderstanding that sort of emerged in this industry, particularly for Archer, but really for everybody, is that, people continue to look at this, you know, FAA certification as this critical milestone. And it definitely is a big milestone, but it’s not critical path to getting to market. Well, here’s what we’ve seen over the last year. So, from a rulemaking perspective, the FAA has done the majority of the work.
They released the ASFAR last year, Special Federal Aviation Regulation, and what that did was it established the complete rule set for how eVTOL will be certified. And what’s happened since then is a lot of sovereign nations, The UAE being the leader here, has said, okay, the rule set exists. A lot of the work from the certification perspective is already getting done. There’s no reason why we as a sovereign country with our own regulatory body can’t actually go complete the last several steps ourselves and authorize someone to fly here within our country. And so that’s what the GCAA, which is the federal regulatory body that governs aviation and The UAE has done.
That’s exciting for a few reasons. One is, a lot of other countries within the region, so think Middle East, North Africa, think Asia, have said, okay. Well, The UAE is one of the countries on Earth with the strongest records in aviation safety. You’ve got two phenomenal airlines with Emirates and Etihad. You’ve got dozens of wide body aircraft, whether it’s a three eighties or Dreamliners that fly in and out of the country every single day as two of the major transit hubs in the world.
And so if that regulatory body is saying, hey, we are going to enable commercial flight within our country as soon as this year, maybe there’s something there. And so what we’ve started to do is get inbound from countries and regulatory bodies all over the world saying, hey, how do we do something similar? And maybe how do we go leverage what The UAE is already doing to go launch within our own country? And you’ve probably seen online some of the posts around other countries that have been excited, where, you know, we’ve gone to speak or go meet with officials. So that’s, I think, point number one.
Point number two is here at home, you know, we were just, last week in DC meeting with some of the top regulators, you know, in the country, so including the secretary of transportation, Sean Duffy. So Adam, you know, was invited to go meet with him. And the message from him was sort of, you know, don’t count America out. And then also, I think what we’ve seen is that America, and particularly this administration, wants to be first and and doesn’t want to be last, especially when you’ve got a product that is built here in America, by predominantly American talent that’s also serving American defense. And so, I think there’s a lot of excitement now to figure out how, you know, we can accelerate things here on the home front also.
Unidentified speaker, Host, JPMorgan: So the FAA has discussed 2028 as sort of a year for scale EV2 operations. Peers here already are talking about their partnership with Delta, maybe even as soon as this year, probably fairly small scale. I mean, for the people in the room, if we land in Newark in the coming years, when should we assume we can might be able to jump on a plane to Manhattan?
Nikhil Goel, Chief Commercial Officer, Archer: Yes. Well, so look, the, first of all, we work with two of the largest airlines in the country, United and Southwest. United’s invested in the company something like five times. They have already placed pre delivery payments against their up to $1,500,000,000 order. So they’ve been a long time strong partner.
And then Southwest is a new partner that we brought into the fold. So between the two of them, we cover most of the major airports in the country. You know, the FAA has obviously, as I mentioned before, continued to be increasingly supportive. What we are doing today is we are working hand in hand with both of those partners to as your to your point, we see a world where in The U. S, we eVTOL is at scale in major cities, in time for the Olympics.
And that was actually sort of that vision was set out by Billy Nolan, who is the previous acting administrator of the FAA, who now works for Archer. He’s our chief regulatory affairs officer. And so, he has continued to drive that not just internally at Archer, but with his, you know, former, colleagues at the FAA. And so the way that we’re going to get there is what we are doing today is we’re working with both United and Southwest. We’re looking at some of the major airports that they operate in.
So for United, that’s SFO and Newark. For Southwest, that’s places, you know, within LA and within California. What we are doing is we’re thinking through every aspect of the operational and customer experience. So for example, if you are, say, a premium flyer or a loyal flyer with United and let’s say you fly SFO to Newark, you land, maybe one day in the future, you would get an air taxi as part of your journey into Manhattan. And so we’re thinking through what every part of that looks like.
Okay. When you land at Newark, what happens to your bags? What does the journey look like for you to have that seamless airside transfer into your air taxi? Where within Manhattan are you landing, and what does the experience look like to get you home on the final mile? We’re we are hammering out every one of those pieces today.
And then, you know, as we continue to do that, we’ll start to ramp up early operations, and get to a place where we’re at that scale.
Unidentified speaker, Host, JPMorgan: Yeah. And you mentioned before, like it could end up being The Middle East or UAE before some of this happens even before The U. S. But maybe ahead of that coming back to piloted flight and to the extent that you answer, what are the remaining steps before you complete piloted flight on the conforming aircraft in The U. S.
And perhaps UAE later this year?
Nikhil Goel, Chief Commercial Officer, Archer: Yes. Look, virtually very little here in The U. S. We’re just we talked about this in the earnings call, Adam did. We’re just now in the final stages of testing.
The aircraft’s there. We released some photos of it. So we’re just in the final stages of testing, and then we’ll talk about it when we talk about
Unidentified speaker, Host, JPMorgan: it. Okay. We look forward to that. Coming back to the opening comments around the Launch Edition, and I guess, when we think about this, will all the launch edition customers receive conforming aircraft that you intend to certify? Are these pre conforming aircraft?
I guess, how much demand is there from launch customers? I think you mentioned multiple jurisdictions, but as we think about the opportunity from a revenue perspective maybe this year or next year?
Nikhil Goel, Chief Commercial Officer, Archer: Yes. Well, so what we’ve talked about publicly is these will be some of the first aircraft that come out of the line. These are identical to what we are planning from a production perspective and a commercialization perspective. The entire intent of the Launch Edition program is to learn how to operate. It’s sort of funny at the outset, call it two or three years ago, I think people were in the mode of finding early potential customers.
You would announce these sort of large orders that, you know, were were all positive intent. But when you actually get pragmatic about how you deliver those aircraft, it’s not like you’re gonna go drop ship somebody 50 aircraft and say, go have fun. This is a very intricate process where we have to keep safety top of mind and then really go build out the customer experience together. So what the launch edition looks like for us is, let’s say you’re United or in this case Abu Dhabi Aviation, who we announced with, they would take an order of two to three aircraft. And the reason you want two to three is so that you can actually start to simulate and operate what looks like a service.
So you have multiple aircraft that you’re coordinating with our software. You are ramping up every piece of that. So that means we will ship you a simulator. We will have peep Archer personnel on the ground, everyone from flight test personnel to maintenance staff to pilot training to even, like, local, government relations leadership, everything you need to successfully go commence the service there on the ground. We’ll work hand in hand with you for a period of eighteen to twenty four months.
And then at the conclusion of that, the goal is for you to be self sufficient, meaning you have started to train up your pilots, you have the maintenance framework, you really understand how these aircraft operate, and you’re ready to go expand your fleet. And I think the customers that we speak to have been very, very amenable to it and excited about that. I’m pretty confident that we’ll have more demand than we have supply. And so that puts us into a fortuitous place where we can be very, very strategic about the partners we choose and the regions we choose.
Unidentified speaker, Host, JPMorgan: Yes. Maybe, I guess, the close one being The UAE, what is needed from a resource perspective between infrastructure, labor, maintenance, pilots, I guess, community engagement? What is Archer doing on that? And I guess, what are your other sort of partnersstakeholders? What is their role in that?
Nikhil Goel, Chief Commercial Officer, Archer: Yeah. Look, we’ve spent the last two years really growing the ecosystem in The UAE to get to this point. It really all started with, probably from the investor perspective. So we’ve got two of the largest sovereign wealth funds in The UAE, really in the world, as part of the Archer journey. So the first is Mubadala, and then the second is IHC, which is is, you know, part of the royal family.
And so both of those have been phenomenal investors that have been more than just money, but really helping us go navigate the country. And there’s probably five or six pieces that have been very critical. First is just support from the royal family. So, Sheikh Mohammed bin Zayed, who’s the ruler of the country, his son, Sheikh Hamdan, is really overseeing what they call a smart and autonomous systems council. And that has the mandate of bringing all of these advanced technologies, air, land, and sea, into the country.
And and we have been sort of their chosen partner on the air taxi front. Then comes the regulatory piece. So as part of that, they have gone to the GCA and said, hey. How do we go partner together to build a safe framework to bring the aircraft to the country? Third is the set of private partners.
So one, as an example, is Etihad Air Aviation Training. So they’re one of the largest institutes to train pilots in the world. They’re a subsidiary of Etihad Airways. You know, you go to their facilities, they’ve got dozens of these wide body and narrow body simulators, and it’s very and they serve something like 60 airlines. They’re truly world experts at what they do.
And so what they’re gonna do is fold in Archer into their program. They’ll house one of our simulators and start training pilots locally, not just for the country, but really, you know, potentially regionally as well. And then you you need an operator. So Abu Dhabi Aviation, which is one of the largest helicopter operators in the world, as I said, it was co owned by Mubadol and ADQ. They have, you know, agreed to pay us money to take two aircraft, as well as our personnel and start operating them this year.
And so the end result of what that looks like is you’ve got the government, which is accelerating infrastructure and putting money into us, And then you’ve got private and public entities that are working with us to go stand this up as quickly and safely as possible. So it’s a really good call it kind of a consortium type of approach, where I think we have a high probability of success in doing this quickly here.
Unidentified speaker, Host, JPMorgan: Can you walk us to a similar corollary for The U. S? I mean, FASI, it knows what timing is, but all these same things have to be solved here too. So what are the typical corollaries there? And I fear in U.
S. Things like red tape and you can’t Namibianism, you can’t build a new infrastructure or anything like that. So that I’m guessing it would be more around existing infrastructure, but I don’t want to
Nikhil Goel, Chief Commercial Officer, Archer: It’s a combination of both. So we do think that just globally, but particularly here in The U. S, there’s a big, big opportunity to leverage existing infrastructure. There’s something like 5,040 airports in the country. We only use roughly 38 of them, to any sort of heavy extent.
So and then on top of that, you got another 5,000 private airports and helipads. And so you have a ton of infrastructure, particularly within our big cities. Los Angeles alone has, you know, over 200 helipads. San Francisco’s got 28 just within the city of San Francisco itself. And almost none of these are used because helicopters, are very loud and people don’t want helicopters in their backyard.
And so we’ve started to unlock that in a couple of different ways. One is through FBOs. So, we are partners with both Signature and Atlantic, who have phenomenal locations. Everything, you know, here in the Tri State area, places like Teterboro and Westchester, as well as, you know, East 30 Fourth Street. On the West Coast, you’ve got FBOs all across the LA Basin, all across the Bay Area, you know, as far North as Napa, as far South as San Jose.
And so we are working with both Atlantic and Signature to slowly start to electrify those properties so you can fly in and out of them. On top of that, we have selected strategic partners to build bespoke infrastructure. So in Los Angeles, for example, we have an exclusive partnership with the LA Rams, for SoFi Stadium. So SoFi Stadium is one of the, key landmarks within LA. It’s gonna host over the next three years the World Cup, the Super Bowl, and the Olympics.
And so, traffic in and out of there is just absolutely manic, especially on game days. And so they’re very excited to go build infrastructure there for concerts, for games, etcetera. And similarly, USC that’s got four helipads on their campus, they’re very excited to partner with us and, again, use that as a focal point to, go launch eVTOL in LA. And so those are the just the ones where we’ve been public. In the Bay Area, we’ve got one in South San Francisco that houses Stripe and Genentech amongst other companies.
And so those are just the ones where we’ve been public. We have dozens of these opportunities all over the world where people want to go build infrastructure with us.
Unidentified speaker, Host, JPMorgan: And just like who owns the who’s going to be the I guess they have to deal with pilot, pilot training, maintenance and things like that? Like, you talked in the past about this is where the relationship with like United may come into the fold. Yep. Well, look, earlier this
Nikhil Goel, Chief Commercial Officer, Archer: year, we announced our Part 141, which allows us to establish a pilot training academy. And so we’ve taken a pretty forward role in that. But that’s also where we’re lucky to have the partnerships with United and Southwest. So United, a couple of years ago, announced their Aviate Pilot Training Academy. They see this as a very, very, advantageous thing for them because, the way they look at it is, you know, you can become an eVTOL pilot after roughly five hundred hours.
And so there’s this sort of gap between, the five hundred hour mark and kind of roughly the fifteen hundred hour mark where you would become a united pilot. And so they see this as an opportunity to start building those pilot hours early, get pilots into the the pipeline. And then, you know, for some of those folks, they may be an EBITDA pilot forever because it’s a it’s a job where you can sleep in your own bed every night. And some of those folks may graduate to go become a United pilot. And, you know, both paths are are phenomenal.
And so, we’ve been working hand in hand with United for several years on the problem here. And what what’s exciting is, you know, at Archer HQ, just about every day, we’ll bring somebody into the facility and have them go fly our simulator. And that could be an experienced, you know, fighter pilot. It could be a 12 year old child. And usually, a 12 year old child has the easiest time really picking up the controls, because it is a significantly easier aircraft to fly.
And so we’re excited that this will open up a whole new class of pilots.
Unidentified speaker, Host, JPMorgan: What’s the age limit before you can get a pilot’s license?
Unidentified speaker, Analyst: All
Unidentified speaker, Host, JPMorgan: right. Let me pivot here to defense. It’s been an interesting evolution for the space and for Archer. I guess, an eVTOL, maybe obviously, you need to think about more of the hybrid side. But first of all, the it started off with some program with Agility Prime and that whole it seems like that’s evolved quite a bit and maybe the prior sort of $140 plus million opportunity maybe have shifted or changed a bit.
But how has it evolved? And I guess, what is the current level of engagement with the DOD and maybe perhaps with the partner you have here with Andral?
Nikhil Goel, Chief Commercial Officer, Archer: Yeah. Well, look, what what Agility Prime and AFWERX did was was awesome because what it did was it really started to highlight two military leaders across the armed services the benefits of eVTOL, particularly the electric part around, hey, this is a lower noise signature, lower heat signature, a lower cost alternative to helicopters. And it started to get people excited about that, and we participated in that along with a lot of our peers. I think, though, that was never intended to be a pathway to a commercial program of record. It was intended to be more sort of focused on R and D.
And as you’ve seen, the Air Force has recently sort of started to widen on funding for that. What’s come next is is sort of the opportunity that we see with our partners, Andral. So, we started working with them last year. We announced our new, division of the company, Archer Defense, specifically to go work with Anduril on, as I mentioned earlier, a variant of Midnight. And so this variant will leverage a lot of the same IP, a lot of the same architecture, a lot of the same sort of base foundation of Midnight, but will be hybrid electric.
And that’ll get you enhanced performance, you know, when you think about range, speed, and payload. So it’ll get you the stuff that the military they have really broken the mold around how you sell defense. And they’ve proved they have really broken the mold around how you sell defense, and they’ve proven that you don’t have to necessarily be a big three government contractor to be able to go win big programs. So what we’ve done is we have have have sort of a very, very specific customer. We have a set of requirements that we are, you know, engaging on where we feel increasingly confident that the variant of midnight, is going to be able to go satisfy, and we’re continuing down path there.
And so earlier this year, what Adam announced was that that opportunity was actually larger and nearer term than we even originally anticipated. And so on the backs of that, we were able to bring on some partners that wanted to be part of the journey and bring another $300,000,000 of capital into the company as well, including BlackRock. And so that’s continued to be really exciting and we continue to feel strongly about that.
Unidentified speaker, Host, JPMorgan: And we’ll hear more soon. Yes. Well, it certainly caused a lot of buzz and I know it’s hard to talk about. But I guess conceptually, how should we think about this market opportunity from a size perspective? When can it start?
I guess, when can your hybrid Vitol really be ready to be put on, I guess, joint product with Androl?
Nikhil Goel, Chief Commercial Officer, Archer: Yes. Well, I think it’s too early to say. What I will say is that the opportunity is near term than we thought. And it’s something that as we continue to share more, I think we’ll continue to look more and more real and more exciting. But it is larger than we originally expected and near term than we originally expected as well.
Unidentified speaker, Host, JPMorgan: How fungible is the technology or, I mean, even the personnel you have internally, you know, when we think about a fully electric powertrain versus a hybrid electric powertrain?
Nikhil Goel, Chief Commercial Officer, Archer: It’s, there’s a lot of synergy for a couple of reasons. One is, you know, we’ve assembled one of the best powertrain teams in the world. Got roughly 100 people who are alumni from Tesla, SpaceX, Apple, etcetera, where you go into our automotive style battery factory in California, and there are very few things outside of Tesla that really operate at that scale with that level of professionalism. And so that same team will be able to go build battery packs that also, you know, provide the electric portion of the hybrid vehicle. So that’s sort of a shared platform that’s going to be very, very advantageous for us that is nearly impossible to go replicate at least without a lot of time and money.
So that’s number one. And then, you know, sort of number two is, I think, from a talent timing perspective, it’s very interesting because a lot of the folks that we have at Archer, you know, started at the, the front end of the development program for Midnight. Midnight’s now in the sort of certification and test part of the program. So a lot of the zero to one engineers who are really great at conceptual design, really good at designing aircraft, get to now shift over to a new fund problem of designing this aircraft. So it’s a way to kind of keep the talent base consistent without layering on additional OpEx.
Unidentified speaker, Host, JPMorgan: Yes. I want to pause and see if there’s any questions. I certainly have a lot more, but I want to see if anybody has any questions before we move on. All right. Maybe I want to come back actually to launch and I thought it was interesting in the last call.
I think a lot of the pricing or unit economics that were put forth, let’s call it three or four years ago have kind of been evolving, maybe shifting to a positive level. How should we think about the unit economics in your business? And how should we think about, for example, launch in the next few years in terms of maybe a margin profile? Yes. Well, there’s a couple of ways
Nikhil Goel, Chief Commercial Officer, Archer: to think about it. On the aircraft side, we put out numbers last year that were meant to be sort of forward indicative numbers of what production could look like. What we roughly outlined was that in 2025 and 2026, well, sorry, let me back up a little bit, which is, our partner on the manufacturing side is Stellantis. And the reason we work with Stellantis, so for those of you who aren’t familiar, you know, that’s the automotive group that owns brands like Jeep Ram, Maserati. It’s the third largest automaker on the planet, whose chairman and and CEO is John Elkin, who also is the chairman of Ferrari.
And they’ve been not only big supporters of the company, but have also invested in the company multiple times. And so, the reason we partnered with them is these aircraft at their core are really more like luxury cars than they are aircraft. They’re, you know, built with carbon composites and they need to ultimately be assembled at scale, large, you know, with large amounts of autonomy. And so that factory that we built with them is in coming to Georgia. And the first phase of that, I’ll be able to produce about six fifty aircraft per year and over time could be expanded to produce 2,000 aircraft a year.
So this is, you know, set to be one potentially one of the largest aviation factories in the world. And so the reason that’s really important, you know, circling back to your question, is what we did then next was we said, okay, how is this factory gonna scale up? Because at the outset, you do a lot of stuff that doesn’t scale, and then over time, you add in more and more increasing levels of autonomy into the process or automation into the process. And so what we said was, you know, we believe that this year, next year, we’ll be able to produce roughly tens of aircraft, call it at a rate of, two aircraft a month. And then in the years that follow, you know, produce hundreds of aircraft per year.
And what that does is it gets us to a place where in the 2728 timeframe, you know, you get to a place where you can get achieve up to a roughly 50% gross margin on the aircraft. And that really gets you to a place where you start to approach breakeven on the factory. And so that’s where the model, as I mentioned before, of selling aircraft is really advantageous because we’ve built this order book that now is in excess of $6,000,000,000 And as we start to deliver on those, you get the revenue on the front end. And, that’s why we think it’s a good model where you’ve got these customer partners that really want to go deployment and at scale.
Unidentified speaker, Host, JPMorgan: I want to come back to maybe manufacturing a bit, but I wanted to maybe hit the third pillar, which is software. And kind of open and a question, but what is your sort of competitive mode here? Where does this how does this help you drive your business, capture customers, or maybe it’s more of around the operations after you’ve already captured your customers you’re selling aircraft to, but how does that fit in the overall strategy? Yep. Well, I think of software in
Nikhil Goel, Chief Commercial Officer, Archer: three or four different buckets. First is the flight control software onboard the aircraft itself. That’s one of the few areas that we’ve chosen to develop ourselves because it is so important to the the core safety and control of the aircraft. And then there’s sort of, the software, around both the operations and the ecosystem. So on the operations side, you’ve got, sort of your suite of apps.
So you’ve got the pilot app, you’ve got the customer app, you’ve got the app for, the team that’s operating the Verta port, and this is all stuff my team built at Uber. And so when we started Uber Elevate and we launched, some of the early Uber services with helicopters, we took all of a lot of the knowledge and expertise from Uber’s core ride sharing product and pulled that over to the aviation product. How do you think about, orchestrating multimodal flights, you know, ground to air to ground? How do you think about when you want to order an air taxi on your phone, what does that user experience look like? And so we really spent a lot of time constructing those things.
And then, you know, a lot of that team is now here at Archer. And so we’re you know, we get to rethink a lot of it, but also pull from from a lot of the know how and and just sort of experience there. And so, there’s sort of the the ecosystem of apps, And then there’s kind of the layer of all of the route optimization we do in air traffic control for our aircraft. And so there’s a lot of goodness in there that, that that really sort of orchestrates the entire system. So how are you thinking about particularly, for example, air ops?
So if you encounter inclement weather in the New York area, how are you thinking about rearranging the planes and the pilots and the crew to remain to basically maximize utilization?
Unidentified speaker, Host, JPMorgan: Again, I might see you’ve got a question over here.
Unidentified speaker, Analyst: Hey, good afternoon. So I cover United and Southwest, so I’m coming at this from a somewhat different perspective, and I don’t want to waste the time of investors and prospective investors in the room. But I’m mostly curious about how the product will tie together with commercial flights. What what sort of and I think in per seat terms. So to the end user recognizing that there’s gonna be a high degree of pricing variability, are you is this a product that’s gonna cost a dollar a mile, $5 a mile, $10 a mile, just to help me sort of better understand the market size from the airline perspective?
Nikhil Goel, Chief Commercial Officer, Archer: Yes. So what we’ve projected previously and sort of in a public domain has been, we expect at the outset, the cost to operate to be roughly, you know, call it $4 to $5 a mile. So roughly on par with an Uber Black. And that’s the point that that’s on day one. So that’s a level that we expect is certainly not for everybody, but is a phenomenal substitute for taking an Uber to the airport.
And, you know, zooming out a little bit to answer your question, you know, a lot of people ask me, like, why are airlines so interested in this? There’s a few reasons. One is, if you look at the, you know, new cover airlines, so you know this, like, you look at where airlines make all their money, it’s on the premium traveler. And so it’s, you know, a lot of the people in this room. And a lot of these airlines are constantly in battle for how do you differentiate to go satisfy that customer.
And so let’s say you live in Brooklyn and you have a choice of, you know, would you go to Kennedy or would you go to Newark?
Unidentified speaker, Host, JPMorgan: A lot of people who live
Nikhil Goel, Chief Commercial Officer, Archer: in Brooklyn may choose to go to Kennedy. But, maybe they like flying on United. And if you can take an air taxi and get to Newark within seven minutes, well, now you’re indifferent. In fact, maybe you have a preference to to go fly United. And so that story has repeated itself all over the world, and that’s why, you know, we’ve been able to go work with folks like Japan Airlines, the leading airline in Japan.
You know, for anyone who’s been to Tokyo, getting from the middle of Tokyo to Narita can take you an hour and a half or longer. And so all of these airlines are looking at airports which are increasingly further from the urban core and saying, gosh, this is a pretty phenomenal differentiator for my business. By the way, it’s something I know a little something about. And so, that’s why we’ve been lucky to have all these airline customers that have really taken a hard look at it.
Unidentified speaker, Analyst: And for certification purposes, is the FAA going to require that it operates between heliports? Or is there a scenario down the road where, assuming there’s space, I could get picked up after a soccer game in Ridgefield, Connecticut, and so I don’t miss a kid’s game and zip to Newark Airport? Or is it only going to be Heliport to Heliport? Thanks.
Nikhil Goel, Chief Commercial Officer, Archer: So it’ll be vertiport to vertiport. And so what that means is, look, if you look at how helicopters operate today, there is guidance around how you can operate helicopters safely from private property. That’ll be more of a phase two. I think phase one is, let’s go establish highly trafficked routes, where you can operate almost a gondola like service so that it’s very efficient, very safe, high utilization, high load factor. And then over time, as this becomes more commonplace, I expect you’ll see, you know, more sort of, lower cost forms of infrastructure emerge.
Unidentified speaker, Host, JPMorgan: Thanks. Maybe as we wrap up, I guess, is there anything that’s being, I guess, misunderstood about the Archer story? Part of your closing remarks, any particular milestones? You mentioned flight testing. We’ll keep our eyes peeled for that.
But what what what else would we be looking out for this year? Yeah. I mean, as as
Nikhil Goel, Chief Commercial Officer, Archer: I mentioned earlier, I think the biggest misunderstanding in the industry is that, nothing can happen until FAA certification. And as I said earlier, FAA cert is definitely an important milestone, but there are multiple diversified pathways to revenue before that. One is international, where you’ve got sovereign nations like The UAE who have committed to launching within their country commercially. And then the second is military, where as I said, I think we’re the only folks that are really pursuing a large program of record on the defense side. And so both of those give us opportunities for revenue here in the early years.
And then meanwhile, we’ll continue pursuing FAA certification in earnest. And as I said, the goal is to really be at scale here over the next several years.
Unidentified speaker, Host, JPMorgan: Well, Nikhil, really appreciate sharing insights here. Second year in a row, we’ve had a chance to see the progress and look forward to following the progress looking at it. So thanks again.
Nikhil Goel, Chief Commercial Officer, Archer: Of course. Thanks for having me.
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