About this Video

• Video Title: Archer Aviation Accused of Massive Fraud
• Channel: Wall Street Millennial
• Speakers: The transcript does not name the speaker.
• Duration: 00:11:34

Introduction

This video analyzes allegations of fraud against Archer Aviation, a leading electric vertical takeoff and landing (eVTOL) aircraft company. It examines the company's progress towards FAA certification, its marketing strategies, and the accusations made by Culper Research, a short-selling firm. The video aims to assess Archer Aviation's prospects for success and the timeline for its eVTOL aircraft entering commercial operation.

Key Takeaways

• Archer Aviation's Background and Valuation: Archer Aviation is a significant eVTOL startup with a market capitalization of approximately $6 billion at the time of recording, with significant investment from Cathie Wood's Ark Invest.
• Culper Research's Allegations: Culper Research accuses Archer Aviation of misleading investors regarding their aircraft's capabilities and progress towards FAA certification. Key accusations center on the discrepancy between the original design and the actual performance of the Midnight prototype.
• Archer Aviation's Progress and Timeline: Archer's timeline for FAA certification and commercial operations has been pushed back to 2025. As of the video's release, piloted test flights had not yet commenced, despite earlier claims. The company's test flights have been remote-controlled, not piloted.
• Discrepancies between FAA documents and actual aircraft: The design of Archer's Midnight eVTOL, as detailed in FAA documents, differs significantly from the aircraft shown in a transition flight video released by Archer. The differences include the number of blades and function of the rear propellers.
• Aggressive Marketing: Archer Aviation is actively engaged in self-promotion, including a paid promotional appearance on Jimmy Fallon's show.

Here are the answers to questions 1-4, based solely on the provided transcript:

1. What specific capabilities of Archer Aviation's aircraft did Culper Research allege were misrepresented to investors? Culper Research alleged that Archer Aviation misled investors about the technical progress of their Midnight eVTOL aircraft and its proximity to FAA certification. Specifically, the discrepancies between the FAA-documented design and the actual aircraft's performance and design (including the rear propellers remaining active during horizontal flight and having more blades than originally specified) were cited as evidence of misrepresentation. The slower-than-advertised speed achieved during test flights also supported this accusation.

2. What was the original planned timeline for FAA certification and commercial operation of Archer Aviation's aircraft, and what is the current timeline? The original plan was to receive FAA certification and begin commercial operations by 2024. This timeline has been pushed back to 2025.

3. What are the key differences between the design of Archer's Midnight eVTOL as described in the FAA documents and the aircraft shown in their June 2024 transition flight video? The FAA document from May 2024 described the Midnight as having 12 engines: six with five-bladed propellers on the forward wing and six with two-bladed propellers on the aft wing (these rear propellers were to be inactive during horizontal flight). The June 2024 video showed an aircraft where the rear propellers were still spinning during horizontal flight and now possessed four blades each, not two.

4. What evidence did Culper Research present to support their claims regarding the lack of piloted test flights and the discrepancies in the aircraft design? Culper Research used the discrepancies between the FAA documentation and the video of the transition flight as evidence of design changes and misrepresentation. They also cited a lack of publicly available video evidence of piloted test flights, despite Archer's claims. Furthermore, a public records request to the Selenus Fire Department revealed an email from an Archer employee stating that high-speed ground runs (a precursor to piloted flights) were not expected to begin for several weeks, contradicting the company's public statements about imminent piloted test flights. Culper's investigators also visited Archer's test sites and did not observe any flights.