Archer Air
Source: Archer Air
The current rise in the stock market has fueled concerns about speculation in many unproven offers and technologies, but it does not include the flight of taxis, according to Wall Street investment banker Ken Moelis.
Flying taxis – formally called electric aircraft and the urban air mobility market – are arriving in the near future and could replace helicopters, Moelis and Company founder and CEO Ken Moelis told CNBC earlier this week.
“These vehicles will be 100 times quieter, will be significantly safer, will be significantly cleaner and cheaper,” Moelis told CNBC’s Squawk Alley on Thursday.
On Wednesday, electric aircraft start-up Archer announced the merger of the special purpose acquisition company (SPAC) with Atlas Crest Investment Corp., funded by Moelis, a deal valued at $ 3.8 billion. The start-up plans to launch its first aircraft around 2024; the deal was valued at 2,026.
Moelis said that 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 takeoff and vertical landing” are new and unproven, “this used to be called a helicopter,” said Moelis. “We are adding the word electrical … The technology exists. There is nothing to invent.”
A design that includes 12 rotors also makes the flight method safer than helicopters, said Moelis.
Archer Air
Source: Archer Air
The civilian helicopter market in the United States is currently estimated to have between 10,000 and 15,000 aircraft. Moelis believes that the market could double in size to up to 30,000 as a result of the replacement cycle for electric aircraft and as batteries evolve and extend range to up to 100 miles.
“Just replacing helicopters with electronic take-off and landing vehicles is already a huge market,” said Moelis. “There are 15,000 helicopters now. Can you imagine a world where you can do that?”
Whether Archer’s take-off and vertical landing (eVTOL) aircraft – which can travel up to 60 miles, reach speeds of 150 mph and create minimal noise – can enter the market in 2024 depends, among other factors, on Federal Aviation Administration certification.
United is already placing an order for 200 eVTOL Archer aircraft, a deal valued at $ 1 billion. The Chicago-based aviation giant has invested in several strategies to reduce its carbon footprint in recent months, including an investment in a carbon capture venture by oil and gas company Occidental Petroleum. Urban air mobility vehicles are likely to be used initially to transfer passengers to and from airports. Stellantis, the newly combined Fiat Chrysler and PSA Peugeot, is also among a growing list of Archer investors.
Major players in the automotive and aviation industry, including Uber, Toyota and Airbus, are looking at the flying taxi market. Uber sold its flying taxi business to Archer’s rival Joby last year, in which it is already an investor.
Deloitte data suggests that about 200 companies are working on similar aircraft for use as passengers or cargo, with the market estimated at $ 4 billion by 2025 and $ 57 billion by 2035. Another study by Frost & Sullivan designs air taxis flying to the skies as early as 2022 in Dubai.