Wall Street has found that a combination is even fatter than companies with empty checks and electric vehicles: blank-check companies and Jetsons-style flying taxis. While there is some promise in the idea, investors would better hope it does not shine too much into one.
On Wednesday, electric air taxi developer Archer led a merger with Atlas Crest Investment, a specialty procurement company, or SPAC, led by billionaire investment banker Ken Moelis. In a SPAC, investors give money to a listed guarantor in the hope that it will find an attractive acquisition target, without knowing what it is going to be. The SPAC frenzy of recent months has focused on electric vehicles, as well as on other ‘cool’ start-ups, such as Virgin Galactic, a space tourism company.
Archer will have a valuation of $ 3.8 billion and receive additional funding of $ 1.1 billion. The company’s pitch is to develop an electric vertical take-off and landing vehicle, or eVTOL, that can fly four passengers over busy urban areas for distances up to 60 miles. Futurists have long expected people to fly to work, as in the famous Hanna-Barbera cartoon “The Jetsons”. Now investors and companies are taking it seriously.
United Airlines and Mesa Airlines said on Wednesday that they had placed a $ 1 billion order for Archer’s aircraft. The idea is to fly people from populated areas to United’s hubs – for example from Hollywood to Los Angeles International Airport – by 2024, which will reduce carbon emissions per passenger by about 50%. Archer plans to make ten vehicles that year and increase to 250 in 2025.
The companies that try to develop air taxis range from airlines and airlines to car manufacturers and technology companies. There are hundreds of designs, and even the U.S. Air Force has collaborated on some projects.