Archer Aviation in 2025: Market Reality vs. Investor Hype

The Market’s Changing Mood

The contrast couldn’t be starker. In 2024, Archer Aviation (NYSE: ACHR) was the story everyone wanted to tell. The eVTOL aircraft manufacturer’s shares surged 58.8% throughout the year, riding on momentum from a spectacular 228.3% climb in 2023. The electric vertical takeoff and landing space seemed poised for takeoff—pun intended. Fast forward to 2025, and the narrative has shifted dramatically. The stock has fallen over 20% year-to-date, a particularly stinging reversal considering the broader market’s strength and the outperformance of competitor Joby Aviation (NYSE: JOBY).

Why the Optimism Faded

Several interconnected factors explain Archer’s stumble. First, there’s the regulatory bottleneck. Both Archer and Joby remain locked in a waiting pattern with the U.S. Federal Aviation Administration (FAA), which is notoriously rigorous when evaluating novel aircraft categories. The path to commercial air taxi operations requires three distinct FAA certifications: Type certification, Production certification, and Operational certification. Archer has cleared the Operational hurdle but remains entangled in Type and Production approvals—a process that historically takes considerable time.

Beyond domestic FAA pathways, the company is hedging its bets internationally. Strategic partnerships are being developed with Saudi Arabia’s aviation ecosystem and with Japan Airlines to pilot eVTOL services in Tokyo. Additionally, Archer is exploring the White House’s eVTOL Integration Pilot Program (eIPP), an alternative route designed to enable operational air taxi services by 2026 in select U.S. cities.

The Hidden Tax on Shareholders

Perhaps more pressing for current investors is the dilution problem. Over recent months, Archer has aggressively tapped capital markets. In June alone, the company issued $850 million in new equity, and announced a subsequent $650 million offering earmarked for its purchase of Hawthorne Airport in Los Angeles. These moves were necessary to fund operations and expansion, but they come at a cost: existing shareholders’ ownership stakes shrink with each new issuance.

This pattern is likely to continue. Once regulatory approvals materialize and Archer begins scaling production to meet demand, additional capital raises almost certainly await. Anyone considering entry should anticipate further share dilution as the company transitions from development to deployment.

The Verdict: A Story Still in Progress

Archer Aviation remains a company with genuine promise, but it’s one executing its business plan in slow motion. The regulatory landscape, while gradually advancing, hasn’t yet provided the catalyst investors hoped for by now. A potential inflection point looms in 2026 with the eIPP and international certifications, yet that’s still months away—an eternity in market terms.

For prospective investors, the calculus is complicated. At a $5 billion valuation, the company isn’t absurdly expensive for the eVTOL pioneer, but it’s also not yet the proven winner some hoped it would be by this stage. The safer approach may be to monitor regulatory developments through 2026 before committing capital, allowing the company to demonstrate material progress before betting on its comeback.