Stellantis NV, the European carmaker that owns Chrysler and Fiat, agreed to manufacture an electric aircraft designed by Archer Aviation Inc. and provide the startup with up to $150 million of equity capital to accelerate production.
(Bloomberg) — Stellantis NV, the European carmaker that owns Chrysler and Fiat, agreed to manufacture an electric aircraft designed by Archer Aviation Inc. and provide the startup with up to $150 million of equity capital to accelerate production.
The electric vertical take-off and landing aircraft, called Midnight, will be produced at a new factory in Covington, Georgia, that Stellantis will help develop. Stellantis was an early investor in Archer in 2021 when the startup merged with a special purpose acquisition company to become publicly traded.
“Deepening our partnership with Archer as a strategic investor with plans for growing our shareholding demonstrates how Stellantis is pushing the boundaries to provide sustainable freedom of mobility, from the road to the sky,” Carlos Tavares, the automaker’s chief executive officer, said in a statement.
The two companies are betting that congested highways will compel more people to fly in a new class of electric aircraft that take off like helicopters and then fly like an airplane, skipping over city traffic. Honeywell International Inc., which makes components for the so-called EVTOLs, has estimated the market could be worth $120 billion by 2030.
Under the agreement announced Wednesday, Archer can draw on the equity capital during 2023 and 2024 if it meets certain targets, and Stellantis intends to boost its stake through purchases of Archer stock in the open market, according to the statement. The combination will allow “rapid scaling of aircraft production” while letting Archer avoid heavy spending during the ramp up of production, the companies said.
Stellantis aims to be the exclusive contract manufacturer for the battery-powered aircraft, which can carry a pilot and four passengers up to 100 miles. Along with the capital, Stellantis will contribute advanced manufacturing technology and experienced personnel, the companies said.
“Today’s commitment of significant resources to build the Midnight aircraft with us, places Archer in a strong position to be first to market,” said Adam Goldstein, founder and CEO of Palo Alto, California-based Archer.
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