Wall Street has found a combination even more faddish than blank-check companies and electric vehicles: Blank-check companies and Jetsons-style flying taxis. While there is some promise in the idea, investors had better hope that this isn’t too much glamour packed into one.
On Wednesday, electric air-taxi developer Archer announced a merger with Atlas Crest Investment , a special-purpose acquisition company, or SPAC, led by billionaire investment banker Ken Moelis. In a SPAC, investors give money to a publicly listed sponsor in the hope that it will find an attractive acquisition target, without knowing what it will be. The SPAC frenzy of recent months has focused on electric vehicles as well as other “cool” startups such as space-tourism venture Virgin Galactic.
Archer will have a $3.8 billion valuation, and get $1.1 billion in extra funding. The company’s pitch is to develop an electric vertical-takeoff-and-landing vehicle, or eVTOL, that can fly four passengers over congested urban areas for distances up to 60 miles. Futurists have long anticipated that people will fly to work as they do in the famous Hanna-Barbera cartoon “The Jetsons.” Now investors and companies are taking it seriously.
United Airlines and Mesa Airlines said Wednesday that they have 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, cutting carbon emissions per passenger by about 50%. Archer plans to make 10 vehicles that year, and increase to 250 in 2025.
The companies trying to develop air taxis range from aerospace manufacturers and airlines to car makers and technology firms. There are hundreds of designs, and even the U.S. Air Force has partnered with some projects.