The urban air mobility revolution is supposedly upon us. At least that's what the financial markets seem to believe. I've spent the last three weeks digging into Archer Aviation's soaring stock price, their slick investor presentations, and those eye-popping projections that have Wall Street salivating.
With $2 billion in liquidity and high-profile partnerships with United Airlines and the Defense Department, Archer looks—on paper, anyway—like it's ready to transform how we move through cities. The recent White House executive order supporting the industry only added fuel to their already scorching stock performance.
But I've covered transportation technology long enough to know that the distance between prototype and profitable product is measured in years of heartbreak and rivers of spent capital.
The Infrastructure Paradox
Here's the thing about revolutionary transportation that nobody wants to talk about at investor conferences: these systems require two massive, parallel developments to succeed. You need both the vehicle and the infrastructure. Full stop.
Cars needed roads. Planes needed airports. And eVTOLs need... what exactly?
"A network of urban vertiports," Archer's CEO told me when I interviewed him last month. Great phrase. Looks fantastic in PowerPoints. But where are they going to put them? In which neighborhoods? Under whose authority?
This creates what I call the chicken-and-egg nightmare of transportation startups. Who's going to build billions in infrastructure for vehicles that haven't been certified? And what manufacturer scales production without guaranteed landing spots?
Look, the White House executive order is a nice sentiment—I've read all 38 pages—but federal goodwill doesn't pour concrete or secure urban real estate in Manhattan or San Francisco.
The Certification Marathon
I visited Archer's manufacturing facility back in April. Their Midnight aircraft? Absolutely gorgeous machine. The kind of vehicle that makes you believe the future has arrived.
But then you remember the FAA.
The Federal Aviation Administration has never certified an electric vertical takeoff and landing aircraft for commercial passenger service. Not once. They're essentially writing the rulebook while reviewing the applications, which is about as efficient as you'd expect.
(Having covered the Boeing 737 MAX certification disaster, I can tell you the FAA is in no mood to rush anything these days, no matter how many venture capitalists are tapping their watches.)
Regulatory bodies aren't sprinters. They're marathoners—methodical, cautious, and utterly immune to investor expectations or capital runway concerns.
The Revenue Horizon
HC Wainwright projects Archer will generate $18 million in 2025 revenue, climbing to over $1 billion by 2028.
Let that sink in for a moment.
That's either spectacular growth or spectacular delusion, depending on your perspective. For context, that means Archer is currently trading at roughly 60x their projected 2026 revenue.
Tesla, even during its most bubblicious valuation moments, rarely exceeded 25x forward revenue. And Tesla was selling cars into an established market with, you know, roads and charging stations and a century of regulatory frameworks.
A Theory of eVTOL Adoption
After speaking with dozens of industry experts, I've come to think about transportation revolutions through three distinct phases:
- Novelty Phase: Rich folks, limited routes, astronomical prices, Instagram bragging rights
- Utility Phase: Business travelers, fixed popular routes, premium prices justified by time savings
- Mass Market Phase: Regular consumers, extensive networks, competitive pricing
Archer and its competitors will likely spend years—maybe a decade—stuck in Phase 1, where their services are essentially expensive helicopter alternatives for people who find their Gulfstreams too cumbersome for hops between Manhattan and the Hamptons.
The real question is whether they can build sustainable businesses while waiting for the regulatory, infrastructure, and production scale needed to reach Phase 2. The government and defense contracts help... but they're not the urban air taxi business these valuations are built on.
The Bubble Question
Is this a bubble? Probably. But sometimes bubbles serve a purpose.
The internet bubble funded the fiber optic infrastructure that eventually made Netflix possible. The current AI frenzy is driving unprecedented computing infrastructure investments that will power technologies we haven't even imagined yet.
If the eVTOL bubble—and with these valuations, I'm comfortable calling it that—results in certified aircraft and initial infrastructure that can be expanded later, it might be capital well deployed, despite inevitable investor losses along the way.
The Long View
The future probably does include electric urban air mobility. I've seen the prototypes, talked to the engineers. The physics works. The use case in places like São Paulo or Los Angeles is compelling.
But the timeline? That's measured in decades, not years. And the winners might not be today's darlings.
Remember that Boeing and United Airlines weren't the Wright brothers. Ford wasn't the first automobile manufacturer. Google wasn't the first search engine. The pioneers take the arrows; the settlers take the land.
For investors playing the eVTOL space, the question isn't whether flying taxis will exist—they almost certainly will—but whether today's valuations reflect anything resembling reality.
When analysts project Archer hitting $1 billion in revenue just three years after their first meaningful sale... well, that's not forecasting; that's fantasy writing.
Beautiful story. I'm just not convinced it ends the way they think it does.
