Why Wall Road Believes Flying Taxis Can Exchange Helicopters

Archer Air

Source: Archer Air

Wall Street investment banker Ken Moelis said the current bull market in stocks has raised concerns about speculation with too many offers and unproven technology, but without flying taxis.

Flying taxis – formerly known as electric aircraft and urban air mobility market – are coming in the near future and can replace helicopters, Moelis and the company’s CEO and founder, Ken Moelis, told CNBC earlier this week.

“These vehicles will be 100 times quieter, significantly safer, significantly cleaner and significantly cheaper,” Moelis told CNBC’s Squawk Alley on Thursday.

On Wednesday, the electric aircraft start-up Archer announced the merger of a special purpose vehicle (SPAC) with Moelis-backed Atlas Crest Investment Corp. worth $ 3.8 billion. The start-up plans to bring out its first aircraft sometime around 2024. The deal was valued on 2026 numbers.

According to Moelis, Archer is in the early stages of development, but its business plan is fully funded and the market opportunity is significant. “There is no speculation,” he said.

While skeptics “act like vertical takeoff and landing,” this is something new and unproven, “formerly known as helicopters,” said Moelis. “We add the word electric … The technology exists. There is nothing to invent.”

A 12-rotor design also makes the flight method safer than helicopters, Moelis said.

Archer Air

Source: Archer Air

The US civil helicopter market is currently estimated at 10,000 to 15,000 aircraft. Moelis believes the market could double to up to 30,000 due to the electric aircraft replacement cycle and that batteries will continue to evolve and extend range up to 100 miles.

“Only when helicopters are replaced by electronic take-off and landing vehicles will this be a huge market,” said Moelis. “There are 15,000 helicopters now. Can you imagine a world in which you can achieve that?”

Whether Archer’s electric vertical take-off and landing aircraft (eVTOL), which can fly up to 100 km, reach speeds of 250 km / h and cause minimal noise, can hit the market in 2024 depends, among other things, on Federal Aviation certification Administration.

United already orders 200 eVTOL Archer aircraft valued at $ 1 billion. 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 owned by oil and gas company Occidental Petroleum. 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, is also among a growing list of Archer investors.

Key players in the auto and aviation industries, including Uber, Toyota, and Airbus, are following the flying taxi market. Uber sold its flying taxi business late last year to Archer rival Joby, in which it has already invested.

Data from Deloitte suggests that around 200 companies are working on similar aircraft for passengers or cargo. The market is projected to explore $ 4 billion by 2025 and $ 57 billion by 2035. Another study by Frost & Sullivan assumes that air taxis will fly in the sky in Dubai as early as 2022.