Where Will Archer Aviation Be in 3 Years?

Imagine effortlessly hailing an air taxi just like you would a ride from Uber Technologies, soaring above city traffic while enjoying the views below. The dream of flying cars is no longer just a concept from science fiction -- it's on the verge of becoming a reality.

Enter Archer Aviation (NYSE: ACHR), a start-up creating electric vertical takeoff and landing (eVTOL) aircraft. This company is making strides with its flying taxis and plans to launch commercially as soon as next year.

JPMorgan Chase projects the urban air mobility industry could be worth $1 trillion by 2040, making Archer an exciting opportunity for investors. With that said, Archer still has some hurdles to overcome before it gets there. If you're considering an investment in Archer, here's what to watch for over the next three years.

Archer could transform urban transportation as we know it

Archer Aviation's flagship Midnight aircraft is a four-passenger eVTOL aircraft that can make short trips of 20 to 50 miles. The electric aircraft runs on batteries, making it ideal for urban travel, thanks to its low noise profile and near-zero emissions during operation.

Its vertical takeoff ability makes it ideal for urban travel, where space is more limited. It also aims for a quick turnaround with fast battery swaps or charging, enabling 40 flights per day. In August, its Midnight aircraft reached a major milestone with a 55-mile flight at speeds over 126 miles per hour, the longest flight completed to date.

Image source: Archer Aviation.

Projecting a 2026 launch in the United Arab Emirates

Archer is currently focusing on the commercial deployment of its aircraft in the United Arab Emirates, working closely with its Launch Edition partner, Abu Dhabi Aviation. The Launch Edition program aims to commercialize the Midnight aircraft outside the U.S. and is expected to have a multiyear commercial value of tens of millions of dollars.

The company has delivered its first Midnight aircraft to the UAE and has begun its flight testing program in Abu Dhabi. These tests are essential for validating the aircraft's vertical takeoff and landing capabilities under the specific conditions unique to the region, including extreme heat, humidity, and exposure to dust.

Archer is actively collaborating with local operators and the UAE's aviation authority, the General Civil Aviation Authority (GCAA), to establish a regulatory framework for air taxi services. The UAE's National Aviation Regulator has publicly reaffirmed that it remains on track for certification as early as the third quarter of next year, which would enable Abu Dhabi Aviation to begin commercial passenger service.

Archer's path to FAA certification and U.S. operations

In the U.S., Archer is focused on obtaining certification from the Federal Aviation Administration (FAA). The company currently holds a Part 135 Air Carrier Certificate issued by the FAA. It is approaching the beginning of its Type Inspection Authorization (TIA) testing phase, which is expected to start around the end of 2025 and will consist of about 10 phases, one for each specific system or aspect of its aircraft.

Archer will need to get the necessary production certificates to scale manufacturing and commercialize its aircraft. Generating significant revenue is not expected until the design, development, certification, commercialization, and manufacturing ramp-up are complete. Its conditional purchase order with United Airlines, valued at up to $1 billion (with an option for another $500 million in aircraft), is contingent upon Archer receiving certification of its aircraft from the FAA.

Meanwhile, infrastructure such as vertiports, charging or battery swap systems, and pilot training programs must be established.

Archer is preparing its operational hub at Hawthorne Airport in Los Angeles to support its planned air taxi network, including operations during the 2028 Olympic Games in Los Angeles. That said, it has stated it cannot be sure it will be able to obtain the required authorizations and certifications from the FAA before the start of those Olympics.

Archer Aviation still has a ways to go

Archer is making key progress toward getting its air taxis approved, certified, and ready for operation. It hopes to begin operations in the UAE next year, and we'll get our first view of this technology in commercial action. It still faces several hurdles in the U.S., and even then, it will take time for the company to scale up its production capabilities as it looks to grow at scale.

Given the extended timeline and costs associated with scaling up and achieving commercial operations, most investors should avoid the stock for now. If you do decide to buy Archer stock, keep your position small, and understand that this is a very high-risk stock at this early stage of the business.

JPMorgan Chase is an advertising partner of Motley Fool Money. Courtney Carlsen has positions in Archer Aviation and JPMorgan Chase. The Motley Fool has positions in and recommends JPMorgan Chase and Uber Technologies. The Motley Fool has a disclosure policy.