There's never been much certainty in the market, but the recent turmoil from President Donald Trump's tariff announcements has significantly raised the short-term uncertainty level. Market fluctuations are not unusual, but a trade war with China and elevated tariffs with other countries have many investors worried about the state of the U.S. economy.
Where does this leave Archer Aviation (ACHR +0.33%) as the company works to launch its electric vertical takeoff and landing (eVTOL) business? Here's where the company might end up one year from now.
Image source: Getty Images.
Archer has enough funds to keep the lights on
Archer Aviation has consistently raised funding to get the company up and running, build its Midnight aircraft, and launch its air taxi service. At the beginning of this year, Archer had about $1 billion in liquidity after a $302 million investment.
CEO Adam Goldstein said this money gives the company "our strongest liquidity position to date."
That's good news because Archer had a generally accepted accounting principles (GAAP) net loss of nearly $537 million in 2024 and has no sales yet. Over the next year, Archer may be able to generate some sales, with management saying in February, "We are on track to deliver our first revenue-generating Midnight aircraft later this year."
So, over the next year, investors should expect some sales, but it's still uncertain how much. Some analysts estimate that Archer will earn about $37 million in revenue, but even with modest sales, it won't be even remotely close to profitable.
NYSE: ACHR
Key Data Points
Big unknowns remain over the next year
Archer said it could produce as many as two aircraft per month at its Covington, Georgia, manufacturing facility by the end of this year and reach 650 by 2030.
But it's worth mentioning that there are some significant uncertainties in manufacturing, parts sourcing, and the economy right now. For example, Archer sources the batteries for its Midnight aircraft from a company called Molicel, which is based in Taiwan.
Currently, there's a 10% tariff on imports from Taiwan, and it could go up to 32% if the country doesn't come to a trade agreement with the Trump administration. It's still too early to tell how this might impact Archer, but it would be premature to assume the cost of parts from Taiwan, or from other countries, will not increase over the next year.
What's more, Stellantis is Archer's main manufacturing partner and has contributed a considerable sum in investments. But Stellantis is facing its own difficulties with tariffs, and has already temporarily paused vehicle production in Mexico and Canada. If Stellantis faces higher costs, slower production, or a very uncertain economic environment, it may not have the same capacity to work with Archer.
We're still too early into all of the tariff uncertainty to know how all this will impact Archer, but investors should know that anything that's being manufactured over the next year -- with parts from sources around the world -- could be substantially negatively impacted by tariffs.
Expect some turbulence with Archer
Nearly all stocks have been on a wild ride recently, so Archer's not alone in its volatility. But the bad news for investors is that the company is trying to scale its business at a time when tariff threats are looming and economists are increasing their estimates of a recession in the U.S.
I think Archer has a difficult task ahead of it even without tariffs and a potential economic slowdown, but the additional uncertainty it faces from these new problems could eventually slow down its manufacturing timeline. Over the next year, Archer could be behind some of its original goals and its share price could be negatively affected by the market's reaction to current economic instability.
