Is FAA Certification Enough to Make Archer Aviation Stock a Buy?

Flying cars are one step closer to reality, and Archer Aviation (NYSE: ACHR) is one company leading the charge. The company has made significant progress toward obtaining certification from the Federal Aviation Administration (FAA) -- a crucial step in making urban air travel a reality. But does the recent breakthrough make Archer Aviation stock a buy today?

Let's dive into the business and what's next to find out.

Image source: Archer Aviation.

Archer Aviation is now three-quarters of the way through its certification process

Electric vertical take-off and landing (eVTOL) aircraft, also known as flying taxis, can take off vertically and fly like airplanes while operating with much less noise than helicopters. These features are enabled by modern battery technology and could change transportation as we know it.

However, getting eVTOL aircraft operationally ready for commercial use is a whole other thing. A big part of this process is obtaining FAA certification that an aircraft meets all requirements and is safe to fly. The certification Archer is seeking is called Type Certification, which comprises four phases of approval.

Earlier this month, Archer made headlines as the first eVTOL manufacturer to close out the third phase of the four-part process. With this, the FAA has agreed to all Means of Compliance (MoC) and specific test plans developed by Archer. This includes how Archer intends to demonstrate that its multi-engine redundancy, fly-by-wire flight control software, and lithium-ion thermal runaway mitigations meet safety thresholds.

Completing this phase is a big step forward for Archer and could provide it with a first-mover advantage over fellow eVTOL developer Joby Aviation. As one of the more advanced eVTOL manufacturers, Archer has been selected by the White House's eVTOL Integration Pilot Program (eIPP). This program enables eVTOL operators to work with state and local governments to test real-world operations, jump-starting this new form of transportation and speeding through the traditional approval processes.

What's next for Archer Aviation

Next up for Archer is the final phase of the Type Certification process. In this final phase, the company must demonstrate that its Midnight aircraft complies with FAA airworthiness requirements through formal testing and analysis.

After this, the FAA will grant Type Inspection Authorization (TIA). This allows official government test pilots to climb into the cockpit of Archer's Midnight aircraft and test real-world handling and safety. The FAA will issue the Type Certification if these tests go well.

In the meantime, the company will launch limited early flights through the eIPP program to help test its technology in action. This program allows Archer to begin operating initial, non-commercial, or highly supervised flights as early as this year.

Is it a buy?

Archer Aviation is an early stage, cash-burning company with full Type Certification expected in 2027 or 2028. This certification will be a huge step forward, enabling it to operate on a larger commercial scale, and would certainly be a major reason for investors to buy the stock.

But for now, the company has a long road ahead. If you do decide to buy Archer Aviation stock today, you'll need to be patient and maintain a long-term outlook as this process unfolds.

Courtney Carlsen has positions in Archer Aviation and Joby Aviation. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.