Archer Air
Source: Archer Air
The current bull market in equities has raised concerns about speculation in too many offers and unproven technologies, but does not include taxis, according to Wall Street investment banker Ken Moelis.
Flying taxis – formally called electric planes and the market for urban air mobility – are coming in the near future and they could replace helicopters, said Ken Moelis, CEO and founder of Moelis.
“These vehicles will be 100 times quieter, they will be significantly safer, they will be significantly cleaner and significantly cheaper,” Moelis told CNBC’s Squawk Alley on Thursday.
On Wednesday, the launch of electric aircraft, Archer, announced the special-purpose merger (SPAC) with the Moelis-backed Atlas Crest Investment Corp., a $ 3.8 billion deal. The launch is aimed at releasing its first aircraft sometime around 2024; the transaction was valued at 2026 numbers.
Moelis said Archer is in an early stage of development, but its business plan is fully funded and the market opportunity is significant. “There is no speculation involved,” he said.
While skeptics “act like vertical takeoff and landing” is something new and unproven, “formerly called a helicopter,” Moelis said. “We add the word electric to it … The technology exists. There’s nothing to think of.”
A design that includes 12 rotors also makes the flight method safer than helicopters, Moelis said.
Archer Air
Source: Archer Air
The U.S. civilian helicopter market currently has an estimated 10,000 to 15,000 aircraft. Moelis thinks the market could double to as high as 30,000 due to the replacement cycle for electric aircraft, and as batteries evolve and the range extends to as far as 100 miles.
“Just like the replacement of electronic take-off and landing vehicles for helicopters, it is a huge market,” Moelis said. “There are now 15,000 helicopters. Can you imagine a world where you can reach them?”
Whether Archer’s electric vertical take-off and landing craft (eVTOL) – which can travel up to 60 miles, reach speeds of 150 km / h and create minimal noise – can enter the market in 2024 depends, among other things, on the certification of the Federal Aviation Administration.
United is already placing an order for 200 eVTOL Archer aircraft, a $ 1 billion deal. The Chicago-based aviation giant has invested in several strategies over the past few months to reduce its carbon footprint, including an investment in a carbon capture company from oil and gas company Occidental Petroleum. The urban air mobility vehicles are likely to be used initially to transport passengers to and from airports. Stellantis, the newly combined Fiat Chrysler and PSA Peugeot, are also among a growing list of Archer investors.
Major players in the automotive and aerospace industries, including Uber, Toyota and Airbus, are striving to manage the aircraft market. Uber sold its taxi business late last year to Archer rival Joby, in which he is already an investor.
According to data from Deloitte, about 200 companies are engaged in similar aircraft used for passengers or cargo, and the market is expected to explore $ 20 billion by 2025 and $ 57 billion by 2035. Another study by Frost & Sullivan projects that taxis will go to the air as early as 2022 in Dubai.