Shares of Archer Aviation (NASDAQ:ACHR) opened in the green after the company announced that it had closed financing for its high-volume manufacturing facility in Covington, Georgia. Archer had previously initiated production of the facility in March. Upon the completion of phase one of construction, the 350,000 sq. feet facility is expected to produce up to 650 aircraft per year. This amount of capacity would make the facility the largest electric vertical take-off and landing (eVTOL) aircraft manufacturing facility by volume in the world.
“Consistent with our capital efficient strategy of getting to commercialization, we’ve achieved attractive terms on the project,” said founder and CEO Adam Goldstein. “These agreements, along with our already strong partnership with Stellantis, give us the flexibility to ramp up our capacity and become the leading scale manufacturer of eVTOL aircraft in the world.”
ACHR Stock: Archer Secures Financing for Manufacturing Facility
Concurrent with the announcement, Archer has secured at least $65 million in financing from Synovus Bank (NYSE:SNV) and Evans General Contractors. The $65 million will cover a majority of the costs associated with phase one of construction.
Phase one is expected to be completed sometime in 2024, before the entry of the Midnight aircraft into service during 2025. Afterward, phase two is expected to result in 900,000 sq. ft. of production space, with the capacity to produce up to 2,000 aircraft per year.
Archer’s ultimate goal is to replace 60 to 90-minute car rides with 10 to 20-minute eVTOL flights. These flights will be “safe, sustainable, low noise and cost competitive with ground transportation.”
Last week, the company announced that it had received its first payment from the U.S. Air Force, which totaled $1 million. The payment is part of contracts worth up to $142 million and was in exchange for a mobile flight simulator. The simulator will be used to help train pilots on the features of Archer’s civilian use eVTOL aircraft platform and to assess further use cases for the Air Force. It will also be displayed at public events in order to raise awareness for eVTOL technology.
On the date of publication, Eddie Pan did not hold (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
