Why FAA Certification Matters More Than Ever for Archer Aviation's Future

The Regulatory Hurdle That Could Make or Break the Stock

Archer Aviation (NYSE: ACHR) has been one of the most polarizing stocks since its SPAC debut in September 2021. The company’s trajectory hinges entirely on a single regulatory milestone: securing full Federal Aviation Administration approval for commercial operations. This certification isn’t just another box to check—it’s the linchpin determining whether Archer can capitalize on its $6 billion order backlog or face continued operational constraints.

The eVTOL (electric vertical take off and landing) aircraft manufacturer’s path to profitability depends on clearing four distinct FAA certifications: maintenance and repair, air carrier operations, type certification, and production certification. To date, Archer has secured only the first two. Its type certification remains incomplete, currently in the compliance phase after passing initial airworthiness criteria, with final flight tests pending. The production certification also continues in development.

Understanding the Certification Timeline and Its Market Implications

Archer’s electric aircraft—the Midnight model—carries one pilot and four passengers, achieves a 100-mile range per charge, and reaches speeds of 150 mph. The company positions these vehicles as superior alternatives to traditional helicopters: greener, more economical, and simpler to operate. But superior engineering means nothing without regulatory green light.

Industry analysts project that full type certification may not arrive until 2028, a timeline that compounds investor concerns about cash burn. Currently holding $1.64 billion in liquid assets, the company faces widening losses ($605 million in the latest reporting period) while production remains minimal—only six commercial aircraft in active manufacturing as of August.

The FAA’s newly introduced eVTOL Integration Pilot Program, launched this September, offers a potential acceleration path. By directly supervising test flights alongside major airline partners like United Airlines, Ethiopian Airlines, and Abu Dhabi Aviation, this program could compress what would otherwise be a lengthy approval process.

The Revenue Projection vs. Reality Challenge

Wall Street forecasts tell a story of explosive growth contingent on certification success. Analysts expect Archer’s revenue to climb from virtually nothing in 2025 to $62 million in 2026, then accelerate to $306 million by 2027 as the company deploys commercial air taxi services and increases production volumes. Abu Dhabi Aviation’s route—originally slated for late 2025—remains the critical near-term proving ground for operational viability.

However, these rosy projections come with substantial caveats. Net losses are expected to widen dramatically, potentially reaching $723 million by 2026 as manufacturing and operational expenses spike. This trajectory necessitates continued capital raises, and Archer has already diluted shareholders by 171% since going public. With a current market valuation of $5.26 billion against projected 2026 revenues, the stock trades at roughly 85 times forward sales—an elevated multiple for an unproven business model.

Competitive Pressures and Long-Term Viability Questions

The eVTOL landscape grows increasingly crowded. Joby Aviation emerges as a formidable competitor, manufacturing faster, more energy-efficient aircraft built with proprietary in-house components. This advantage compounds the pressure on Archer to prove its own aircraft efficiency and cost structure.

Beyond competition, fundamental questions persist. Has Archer demonstrated a sustainable business model? Can it maintain operations while burning substantial cash? The company’s reliance on Stellantis for manufacturing support and its current order book from United Airlines and other carriers provide structural support, yet execution risk remains elevated.

Investment Perspective: What Lies Ahead

A complete FAA certification represents undeniable progress and would signal market validation. Yet certification alone won’t resolve deeper operational and financial challenges. The stock remains speculative—suitable only for investors with genuine conviction about the long-term air taxi market development and Archer’s ability to maintain competitive positioning during scaling.

At $5.26 billion market cap against negligible near-term revenue, Archer demands patient capital and tolerance for continued volatility. Milestone achievements in FAA approval could drive upside momentum, but the path to profitability remains uncertain and capital-intensive.