Archer Aviation's 2025 Progress Was Real -- But the Hardest Part Still Lies Ahead

Archer Aviation (NYSE: ACHR) entered 2025 carrying enormous expectations. The company sits at the center of the flying taxi narrative, promising electric vertical takeoff and landing (eVTOL) aircraft that could transform short-distance urban travel. For years, investors heard about vision and potential. In 2025, Archer finally delivered something more tangible: execution.

But while the company made its most credible progress to date, it remains firmly in the pre-commercial phase. For investors, 2025 clarified both Archer's promise and its risks.

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Archer moved from concept toward execution

In 2025, Archer crossed a critical psychological threshold. The company advanced flight testing of its Midnight aircraft, ramped early stage production, and pushed deeper into the certification process. These steps matter because they signal a transition from engineering theory to operational reality.

Archer also progressed through regulatory milestones with the Federal Aviation Administration (FAA). This slow and demanding process will ultimately determine whether the company can operate commercially in the U.S. While Archer has not yet secured full type certification, its steady movement through the framework reduced skepticism that it might stall indefinitely at the prototype stage.

This progress doesn't guarantee success. However, compared to prior years, 2025 demonstrated that Archer can execute against timelines, at least in controlled testing environments. That alone differentiates it from several eVTOL peers that have fallen behind or run out of capital.

The balance sheet became a strength

One of Archer's most important achievements in 2025 had nothing to do with aircraft performance. It was financial. The company raised a substantial amount of capital during the year, ending the third quarter with more than $2 billion in cash and cash equivalents. In a capital-intensive industry where many competitors struggle to fund operations, that balance sheet strength stands out.

This liquidity gives Archer time -- time to complete certification, refine manufacturing, and pursue international launch programs without immediately returning to capital markets. It also reduces near-term existential risk, which remains a genuine concern across the eVTOL space.

That said, investors should not mistake a strong balance sheet for financial sustainability. Archer continues to burn hundreds of millions of dollars annually, generating no commercial revenue. Even with its cash hoard, the company will likely need additional funding before reaching profitability. The difference now is timing; dilution risk is moved further into the future, not off the table.

International momentum is building faster than in the U.S.

One of the more interesting developments in 2025 was Archer's growing international focus.

Through its "Launch Edition" program, the company expanded flight testing and commercialization planning in the Middle East, with a particular emphasis on the United Arab Emirates. These efforts included in-country testing and early commercial arrangements, a sign that international markets may adopt eVTOL services faster than the U.S.

For Archer, this global optionality matters. International operations could provide earlier validation of its aircraft and business model, even if U.S. FAA certification takes longer than expected. That flexibility reduces reliance on a single regulatory outcome and broadens the company's strategic runway.

However, international momentum does not replace U.S. certification. In the long term, Archer still needs FAA approval to unlock its largest addressable market. Investors should view overseas progress as a supplement, not a substitute, for domestic success.

Execution risk remains the dominant variable

Despite meaningful progress in 2025, Archer's core risks remain unchanged. The company must still obtain full FAA certification, scale manufacturing from low-volume builds to repeatable production, and launch safe and reliable commercial operations, all while managing costs. Each step introduces execution risk, and history shows that aerospace programs rarely progress in a straight line.

Competition also continues to intensify. Rivals like Joby Aviation are further along in certification and may reach commercialization sooner. If Archer falls behind, early market share and investor confidence could shift quickly. In other words, 2025 reduced uncertainty, but it did not eliminate it.

What does it mean for investors?

Archer Aviation's 2025 performance marked its most credible year yet. The company has proven that it can advance aircraft development, strengthen its balance sheet, and attract international interest. That progress deserves recognition.

At the same time, Archer remains a pre-revenue company with a long road ahead of it. Certification, scaling, and commercialization will determine whether this story evolves into a profitable business or stalls under its own complexity.

For investors, Archer fits squarely into the high-risk, high-upside category. The opportunity is real, but so is the execution challenge. After 2025, Archer will no longer resemble a pure concept stock, but it still needs to prove it can turn ambition into a functioning aviation business. The following 12–24 months will provide more clues on that.

Lawrence Nga has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.