As US air taxi companies push towards the commercialization of electric vertical take-off and landing (eVTOL) aircraft, significant cash outflows persist despite ambitious strides.
During the first quarter, Santa Clara-based Archer Aviation disclosed expenditures totaling $142 million, resulting in a net loss of $117 million, a reflection of the company’s ongoing journey towards passenger flights and delivery of its Midnight aircraft to customers.
The company underscores its forward-looking approach, channeling investments into the assembly of six Midnight prototypes for certification flight testing with the Federal Aviation Administration (FAA) and bolstering the supply chain for future production.
In a recent financial filing on May 9th, Archer candidly acknowledged negative cash flows from operations, attributing them to the ongoing phases of design, development, certification, and manufacturing of their eVTOL aircraft, which have yet to yield revenue streams.
While high research and development spending are par for the course for start-ups venturing into uncharted territory, cash burn remains a pivotal metric scrutinized by analysts assessing the financial robustness of publicly traded companies like Archer, alongside counterparts Joby Aviation and Eve Air Mobility.
Andres Sheppard, a senior equity analyst at Cantor Fitzgerald, highlighted Joby Aviation’s financial fortitude, juxtaposing its substantial cash burn with a resilient cash balance, positioning it favorably within the industry landscape.
Similarly, Santa Cruz-based Joby reported a first-quarter expenditure of approximately $146 million, primarily allocated to certification endeavors and prototype aircraft manufacturing, tempered by $51 million in interest and other income. Despite a decrease in cash holdings compared to the previous year, Joby maintains a formidable cash and short-term investments reserve, signaling stability amidst ongoing development efforts.
Eve Air Mobility, backed by Embraer, navigated a first-quarter loss from operations amounting to $33.9 million, attributing increased research and development costs to team expansion, augmented engineering expenses, and escalated procurement expenses for prototype development.
Eve’s strategic emphasis extends to fortifying its supply chain, with additional investments directed towards milestone payments, parts procurement, and equipment acquisition in support of prototype advancement.
Meanwhile, Archer presses forward with its investments, including the establishment of a high-scale automated battery pack manufacturing line, positioned to supply its Georgia production plant. CEO Adam Goldstein underscores confidence in the industry-leading capability of this initiative, forecasting long-term returns.
Archer’s commitment to supply chain optimization is palpable, having allocated over $50 million to suppliers to bolster future aircraft manufacturing. Goldstein anticipates a natural reduction in cash burn as capital expenditures subside, aligning with preparations for commercial launch slated for the forthcoming year.
As of March 31st, Archer maintains a cash and equivalents reserve of $406 million, with plans to raise additional capital to support its expansion trajectory and eventual passenger flight launches.
With eyes set on global expansion post-FAA certification, both Archer and Joby are exploring opportunities in the Middle East, underscoring the burgeoning prospects and global reach of the eVTOL industry.
