Air Taxis: Inside Archer Aviation eVTOL Growth Strategy | The Factory Doctor w/ Alex Krutz

Archer Aviation’s Nikhil Goel joins Alex Krutz to discuss the technology, manufacturing strategy, and commercial opportunities shaping the future of air taxis.

Link to the full episode of The Factory Doctor Podcast on YouTube: https://youtu.be/8RF8ux40_9s?si=kwmezshSezK2eNny

Alex Krutz: Hello, welcome to The Factory Doctor podcast. This is Alex Krutz. I’m your host, and I’m here with Nikhil Goel. How are you?

Nikhil Goel: I’m good. Thanks for having me today.

Alex Krutz: Great. I’m super excited because you’re my first eVTOL guest, or air taxis. There are lots of different ways to say it and lots of different use cases, but ultimately it’s a new form of flying. So we’re really pleased to have you on here.

Just for all the listeners, a little bit about Nikhil. He founded and ran Uber Elevate, which spawned the air taxi revolution that we have here in the industry as we know it, and has now been with Archer for six years, pre their recent IPO. So he’s really been at the ground floor and raising up, if you will. No pun intended.

Nikhil, again, welcome to the show. Tell us a little bit about you and the company. I look forward to hearing about it.

Nikhil Goel: Thanks, Alex. It’s a pleasure to be here, and thank you for that introduction. I’ve been very fortunate to have the opportunity to work on air taxis for over a decade now.

Almost 11 years ago now, I was at Uber. I was working on other parts of the business, particularly how Uber scaled internationally. And one of the core insights that we had as a company at the time is that all of these cities all over the world were getting more dense. More and more people were moving to cities, but even as that was happening, transportation really was not getting any better. In fact, quite the opposite. It was getting more expensive, more slow, more congested, and worse for our environment.

And so one of the thought experiments we ran was, residential and commercial had moved to three dimensions. People live in skyscrapers today. They work in them. But transportation within cities is largely stuck on this two-dimensional grid. And so we said, “Why don’t we fly in cities? Why can’t we fly from A to B?”

And we ran an experiment. We launched helicopters in almost two dozen cities. It was very interesting. We launched this in New York, São Paulo, Japan, Mexico, and for a lot of people it was phenomenal. You could use the Uber app to push a button and get a flight. So you could fly from JFK to Manhattan or from one side of São Paulo to the other. And that was an incredible experience if you were in the helicopter. It was a pretty bad experience if you weren’t in the helicopter.

Alex Krutz: A lot of the wind wash, right?

Nikhil Goel: The wind wash, but it was really the noise. A lot of these cities were not excited about a bunch of Uber copters in the air. The noise, I think, was very controversial. And it was just not something that we felt proud of integrating into the environment. In fact, a lot of the cities have all but banned helicopters outside of New York and São Paulo, outside of medical or news.

On top of that, I think a lot of people were terrified of getting into helicopters. They were very expensive. No matter how hard we tried and we thought about the utilization and load factor of these machines, it was clear that the costs asymptoted at a level that was still out of reach for most people. And so we came to the conclusion that helicopters would never be a mass-market product. This is not a technology you could scale to the masses.

But I was lucky enough to start working with NASA. There’s a gentleman there, Dr. Mark Moore, who invented this technology called distributed electric propulsion, which is in basically any modern drone today. The concept was, instead of one large fuel-burning rotor like you have in a helicopter, what if, using electricity, you could have a dozen all-electric propellers?

And the reason that’s really important is because now you no longer have to have this very, very large rotor that has to turn so fast to generate lift that it generates a lot of noise. Instead, you can have these smaller electric propulsors that can spin more slowly. And it results in an aircraft that’s 100 times quieter than a helicopter. And that was the breakthrough.

Now, 10 years ago, this was like a science experiment. This was a thing that NASA had been working on for three decades, and nobody had ever commercialized it. And the insight we had was, what if we took some of this technology and worked with NASA and helped get it out into the real world, helped generate some of these companies that would be able to build the technology, and then Uber would use its platform to commercialize it into the real world?

And that’s exactly what we embarked on. We worked with the large OEMs, the Airbuses and Boeings of the world. We worked with many of the upstarts. We worked with many of the traditional rotorcraft companies. And ultimately, five of these companies listed publicly and became real public companies building this technology.

In 2020, I left Uber to join Adam Goldstein. Adam was, I thought, just an incredible serial entrepreneur who saw the same thing I did: the commercial application for this technology. He was able to bring on incredible investors, had, I think, a very prescient vision for how the technology would scale across cities. And I left in 2020 to go join him.

Archer went public in 2021 with world-class partners and a world-class team. Six years later, I have the privilege of working alongside that team, and we’re just in the final stages of getting this tech out in the real world.

Alex Krutz: That’s awesome. And so you’re the chief commercial officer there, right? Tell everybody, what does that mean? I kind of think of Archer as a startup, but it’s a publicly traded company, right? So tell us a little bit about what you do in that role, helping Adam in your venture to commercialize eVTOLs and electrification.

Nikhil Goel: Yeah, absolutely. The vast majority of the company, and we have well over a thousand people now, focus on the technology. We have incredible technology leaders, guys like Tom Muniz, who has been in the industry longer than everybody else, and he’s built now, I think, eight eVTOLs. He originally started building aircraft with Larry Page and is one of the pioneers in the industry.

We’ve got folks like Benjamin Lyon, our president of the OEM. He worked on basically all of the core Apple products and technologies and is helping us build here now at Archer. Most of the folks here are heads down on making the tech work.

I have the privilege of helping that technology get out into the world, whether it is our civil product Midnight or some of our defense products that we’re working on, and now our AI platform Z, and thinking about how that platform can really turbocharge airlines and air traffic control all over the world.

Alex Krutz: That’s great. And tell Tom I said hello. That reminded me, about four or five years ago, I wrote an article for Aviation Week, and it talked about Archer’s go-to-market strategy. And that was one of the things that I think is really unique. Maybe in our technology section we’ll highlight that, but where you use off-the-shelf or more standardized and approved systems, and your industrialization approach, which is very much trying to use the grid, trying to use standard systems instead of trying to recreate everything, and how you do that.

I don’t know if you want to take a minute on that, but that’s super interesting, how you differentiate yourself. Maybe you could explain that for a little bit.

Nikhil Goel: That’s one of the fascinating things about Adam as an entrepreneur: he’s not an aerospace engineer, meaning he’s not singularly focused on the technology. He is prioritizing how you build a business. And his core insight, which I very much agree with, was that these aircraft are going to have multiple iterations. And so it’s very important to think about the stuff that you have to own and then the stuff you don’t have to own on version one.

For us, there were a few things that were essential. The powertrain is really, if you think about it, the core of these aircraft. I like to say it’s these proprietary battery packs, and then we’ve applied an airframe structure to it. The battery really is the secret sauce.

And so we’ve got well over a hundred people who are designing and assembling these battery packs that are aviation grade, built to be certified, and built to be really, really safe and power efficient, which is incredibly important as you think about this all-electric form of transportation. The software that powers the aircraft, and thinking about that as the baseboard for future autonomy. And then the aircraft design itself.

But a lot of the core systems, the avionics, things like the climate control system or the ailerons or the flight computer, things that the aviation industry has really perfected and, more importantly, certified over the last several decades, we get those from existing suppliers, folks like Honeywell, Safran, Garmin.

Alex Krutz: Huge.

Nikhil Goel: And that accelerates us, right? That doesn’t mean that we’ll be relying on third parties forever, but what it does mean is that we eliminate a lot of these pieces that are critical path to getting certified. And until you’re certified, you can’t really start launching and flying these aircraft. So it was really important for us to get to market safely and quickly.

Alex Krutz: Okay. Well, great. When we get to technology, one of the questions I have for you to think about, and we’ll get to that in a minute, is about battery density and distance and how we could talk about that. But let’s talk about industry. What is industry not talking about that they should be around eVTOLs and your mode of transportation that we’re talking about here?

Nikhil Goel: I think there are a lot of incredible people thinking about a lot of the different challenges, but one thing that is really important to understand, Alex, is that this isn’t just about the aircraft.

Now, traditional aviation, I think people play different roles, and some people are focused singularly on the aircraft. Some people are focused on other parts of the operation. I think because this is a new industry, it’s really important that the leaders think about this systemically. And what I mean by that is the aircraft’s an important part of it, but you also have to have the infrastructure. You also have to have the charging, and you also have to figure out how to work with cities.

I’ll give you an example. One of the things that we have done is we’ve teamed up with BETA. BETA is another OEM in the space. They’ve built an incredible CTOL product that I think is initially going to be focused on cargo. But we’re going to have a lot of the same needs. We’re going to have to put charging infrastructure in cities. We’re going to have to have places to take off and land.

And so what we did was we teamed up with BETA. We brought in Macquarie, which is one of the largest real estate owners in the world. And we said, “Hey, let’s build a consortium.” We called it ACES, America’s Consortium for Electric Skyways. That’s going to focus on how you safely and quickly bring this infrastructure to cities all over the world. And our goal is to bring that to 250 aviation sites across America by the end of the decade.

Now, the core insight here was that a lot of these infrastructure locations already exist: helipads, airports, FBOs, places where you can already land a helicopter today. But they need to be electrified, and they need to be comfortable for passengers to ingress and egress. And so that’s one of the things we’re taking on, and I’m really proud of that partnership that we’ve built.

Alex Krutz: That’s amazing. We’ve talked a little bit about the industry and such. Let’s jump into people. How do you and Adam, how does the team organize, influence, achieve your business objectives? How has going public changed that? And core driving factors for your workforce, your mission and North Star. Anything you could share there would be great to hear.

Nikhil Goel: It’s a good question, and Adam and I talk about that a lot. It all starts with the mission. There are a lot of companies in the Valley that pay a lot. They have great perks. They have phenomenal massage rooms and benefits and those sorts of things. What we try to have is a mission that really drives everybody here at Archer.

This is the first new category of aviation in 60 years. And if we achieve even a fraction of what we’re trying to achieve, this is going to be a new form of transportation that will literally change the way people live and work in cities all over the world. And it’s going to start right here in America.

And so as I talk to people at Archer who have been here for years or folks who are joining now for the first time, they say, “Look, I want to be a part of creating that change I want to see in the world. And I want to fundamentally change cities.” That’s why people come and work here.

And seeing that technology fly in the air. I was just at the California International Airshow last weekend in Salinas with all of the Archer employees, and everybody was so proud to be able to see our aircraft there in the sky and there in real life. You didn’t have to squint too hard to extrapolate that and say, “Okay, I understand what this is going to be like in people’s daily lives.” So mission is number one.

Two is culture, which is tied to mission. But culture is the set of repeated actions you build around that mission. For us, we have a few pieces of our culture which are very, very important. Speed is a core tenet of that. Normally, you don’t hear the word speed and aerospace used in the same sentence. What we’ve been able to uniquely do is think about how you marry speed with safety and use that to innovate in ways that people in the industry have not done before.

We have taken multiple VTOL aircraft from complete clean-sheet design to first flight within 18 months. That’s almost unheard of. And if you look at Midnight, which is the aircraft we intend to bring to market here in the U.S. and globally, it went from piloted all the way to piloted city-to-city flights, to the first flight of Thunder, which is the defense variant of the dual-use aircraft that we are building with Anduril that we expect will debut as soon as next year.

And so it’s platforms that we’re building. We’re able to go do it with speed, which I think, especially if you come from the Valley and you’re used to releasing products very frequently, is very, very important to keep people motivated and excited.

Alex Krutz: That’s great. Let’s move into product. I think it would be great to hear a little bit more of where you’re focusing your time. Quality? Is it delivery? Is it still design? And maybe where you’re at in that development life cycle, and where it’s at bringing it to market.

Nikhil Goel: We’re in the final innings here. With new aircraft development, there are several pieces that are really important. One of the areas where we’ve spent a lot of time is thinking about the customer experience. And by customers, I mean not just the passengers who are flying the aircraft, but also the operators, the airlines.

We’re very lucky to be in a position where we work with, what we’ve announced, about seven of the world’s top airlines. Folks like United Airlines, who was the first to really jump into the eVTOL story. They’ve agreed to purchase up to one and a half billion dollars’ worth of aircraft and have already put down deposits against those aircraft. Southwest, which is the largest carrier in California. We’ve got the nationwide exclusives with Japan Airlines and Korean Air.

We work with Etihad as we think about how to go commercialize in the UAE. So Etihad Aviation Training there, which is one of the top in the world around bringing new pilots into the ecosystem. Ethiopian Airlines, and then there are a number of others that we haven’t spoken about publicly. But all of these folks are customers.

So we, and particularly my team, spend a lot of time thinking about how this aircraft will serve both the end consumer but then also operate in these large fleets in the cities that these operators serve.

And so on the Midnight side, we’re now in the final stages of certification. I believe that we’re still, to our knowledge, the only aircraft that’s achieved 100% of its means of compliance with the FAA, which is a long way of saying we’ve had a very, very productive partnership with the regulators, and one that is very collaborative. And I go back to speed as a core tenet. We’ve been able to progress through those steps very rapidly.

Now, the other reason that’s important is earlier this summer at Farnborough, we announced a new aircraft platform called Halo. Halo, I believe, is one of the most sophisticated vertical-lift platforms that’s ever been developed. And we did it in partnership with Anduril.

What Halo is, is a hybrid-electric platform that will be fully autonomous from day one. And importantly, it’ll be dual use. So it’s going to be for both commercial and for defense operators. The defense variant, it’s called Thunder. Anduril has a number of customers, I think the allied forces around the world, that will ultimately use that product.

And then on the commercial side for Halo, we think about offshore energy, we think about freight, humanitarian, medical cargo. There are a bunch of folks who are really excited to start using that aircraft.

Alex Krutz: That’s pretty cool. Just for everybody listening, you have the Midnight, which is your commercial application, and I think that’s still four pax, right? One pilot, three passengers, right? And then Halo, is that basically a variant off of the Midnight, but for those dual-purpose/other industry needs?

Nikhil Goel: It leverages a lot of the core tenets of Midnight, things like the powertrain that are really important. When you see it, they look pretty different. And a lot of the things are an evolution of Midnight, but it’s meant to serve very different purposes.

Alex Krutz: Okay. And then Thunder’s purely, is that just like two pilots and with more payload capabilities?

Nikhil Goel: So it’s fully autonomous.

Alex Krutz: Thunder is fully autonomous?

Nikhil Goel: That’s right. It’s fully autonomous. Anduril will basically missionize the Halo platform and then ultimately deliver that to the end customer across the allied forces. It’s meant to be a companion aircraft for armed attack reconnaissance helicopters.

Alex Krutz: I’m going to geek out on you a little bit here. Is that part of that [unclear] combat aircraft program for the unmanned, or is it going to have its own kind of missions that are destined for the U.S. government?

Nikhil Goel: I can’t talk about specific customers or programs, but just broadly, the intent is to be a collaborative aircraft for the traditional rotorcraft platforms like the Apache, like the Black Hawk that you see in use all across the world.

Alex Krutz: Okay. So it’d be kind of similar missions as to those. That’s great to hear. All right. Let’s maybe get into some strategy, as we’re rounding maybe second base here.

If we think about strategy, from what I remember, even pre-IPO was all around Midnight, and now you’ve got Halo and Thunder. Not getting into details, but what does your future look like for that? Is that just developing those out more with the regulators and bringing those to market? And how do you think about the actions you’re taking with those programs in the future?

Nikhil Goel: I think an important thing to talk about is, just earlier this quarter, we announced a deal with Boeing. Now, this transaction is not closed yet. But what we announced was that Archer would be acquiring three business units from Boeing that are all very forward-facing and centered really around autonomy.

The first is Wisk. Wisk is the business unit that originally was founded by Larry Page. Larry Page, as he was thinking about getting into the space, founded what at the time was Kitty Hawk, that ultimately became Cora, which then sold over to Boeing, which became Wisk. And they had a very unique approach of an aircraft that was fully autonomous from day one and, as a result, built a lot of technology and a lot of progress on how to integrate autonomous aircraft into the airspace.

The second is a company called Insitu. Insitu does ISR. They operate with over 35 countries all over the world, and it’s a profitable business today. And as you think about combining their legacy platforms with all of the autonomous flight hours that they’ve flown over the years and bringing in some of the magic that we’ve been able to develop here at Archer, I think there’s a really exciting opportunity to grow that business.

And then finally, you’ve got SkyGrid. SkyGrid plays into the larger AI push that we’ve been talking about over the last year. And that’s been really interesting because as Archer’s built out the OEM side of the business, one of the things we’ve been able to do is spend a lot of time with governments, a lot of time inside of ATC control towers, and then a lot of time with airlines.

And what we’ve realized is that there’s really been no one who has spent time in R&D collecting and putting into one place all the data that exists in the aviation world. Things like ADS-B, things like communications data, weather, ground movements. And what we’ve done is we’ve built a foundational model that is purpose-built for aviation. We call it Z, Z for the third axis.

And this is a foundation model upon which we can build applications for airlines, governments, even defense. And I think SkyGrid is going to be able to integrate very nicely into that.

Alex Krutz: That’s nice. Before we go on to technology, and I’ve got a couple of questions there, still on the strategy piece. A lot of folks have questions about the use case. Let’s maybe just focus not on Halo or Thunder, because that’s a little bit more secret squirrel stuff, but more on your commercial use case.

Can you maybe talk a little bit about how Archer’s progressed in its development of the business case, use case, what that means, and the technology and industrialization that you’re working on? I guess I know a little bit more from what I’ve written and know you guys, but I think it would be really helpful for people to understand how you’re going to make it work. It would be great.

Nikhil Goel: It’s very important, and it’s something I spend a lot of time on. A lot of this starts with the airlines because they are really our first customer as the operators of these aircraft.

Airlines are focused on a few things. One is just the fact that airports are moving further and further away from cities as you need more space and air travel is becoming more prevalent. And two is the focus on the premium passenger. If you look at the new aircraft that Boeing and Airbus are delivering to customers, there’s an increase in focus on the premium passenger, and it’s taking up more than 50% of the real estate of the plane. So there’s a lot of competition for these passengers.

As an airline thinks about a city, let’s say the greater New York City area, the journey doesn’t start when you take off. It really starts when you leave your house for the airport. And oftentimes that home-to-airport leg of the journey is the most painful. It can take you an hour and a half to get to the airport.

Alex Krutz: I know. Tell me. I live in Orange County, and to get to LAX, it’s like an hour and 30, an hour and 40 minutes just to get there and park and get to the airport. It’s a monstrosity.

Nikhil Goel: A hundred percent. But if you could fly from Orange County to LAX, you’d probably get there in 20, 25 minutes maximum. And so, as you can imagine, a lot of the airlines that fly in and out of LAX have come to us and said, “Hey, we want Archer Midnight to power the first and last mile of that journey, especially if you’ve got somebody that is traveling in business or first class.”

And so I think the initial rollouts of these aircraft will likely be with our airline customers for premium passengers as they think about, holistically, that journey from home to airport to airport to where you’re going. And so that’s been a lot of the initial use case.

Another use case that we think about a lot is just simply replacing helicopters. Every city in the world has some number of helicopters for emergency medical services, for media, for VVIP transportation. And as I mentioned earlier, those aircraft are not always met with a lot of enthusiasm because of the noise and safety concerns that they create. Well, we can, early in the journey, start replacing those helicopters with a quieter, safer alternative.

So there’s no shortage of use cases, and we’re very excited to continue engaging the cities and the airlines that we’re going to serve.

Alex Krutz: All right. Before we get to technology, one more strategy question. It would be great for people to know, but I think in a year or two, when the Olympics are hosted, you guys are playing a pretty big role in that, right?

Nikhil Goel: That’s right. That’s a partnership that started almost 10 years ago when I was back at Uber. We got to know Casey Wasserman, who at the time was lobbying for the Olympics to be in Los Angeles in 2024. Of course, it ultimately became LA28, which I think, given COVID and such, turned out okay for the world.

But a few years ago, he came to us and said, “Look, this is going to be a phenomenal show, not just of athletes from all over the world, but American innovation in one of the largest, most complex cities in the world, Los Angeles.”

And so we started the conversation around how LA could be the initial showcase for this technology at scale. And we were very fortunate to be selected as the exclusive air taxi provider for the Games and the partner for Team USA.

The plan there is to, and we are already hard at work at this, think about the key venues, places like SoFi Stadium and the Coliseum, and how Archer can be the form of transportation for the dignitaries that’ll be visiting, for the VIPs and the athletes. And really, it’ll be a showcase to the world where every city and country and head of state that comes and visits or watches on TV will be able to see how that technology that was built here in America is powering one of the greatest American cities in the world.

Alex Krutz: That’s amazing. Thanks for sharing that. All right, so technology, as we’re wrapping up here. Let’s talk a little bit about battery density and maybe the trade-offs of weight and speed. How do you guys think about that?

And again, not trying to get into secret squirrel stuff, but just generally, you have aerodynamics that you have to think about here. How do you guys think about that, and where are you maybe spending some time around now that makes sense to talk about?

Nikhil Goel: It all comes back to weight at the end of the day. From a regulation perspective, as well as just a physics perspective, these aircraft, every single pound matters.

And so what we’ve done is we’ve built a world-class powertrain team, folks from Tesla, Apple, SpaceX, who have been working on these challenges for the last several decades. We buy battery cells from very, very reputable manufacturers in the world. But what we do in-house is we design and manufacture our own battery packs.

There are a few things that really matter. First is safety, and thinking about, even if there were to be an incident with the aircraft, making sure that you aren’t prone to things like thermal runaway or other events with the battery.

Certification. You’ve got to be able to get these aircraft certified with the FAA, just like you do with the rest of the aircraft.

And then three is performance. So thinking about both volume density and power density, because you’ve got to be able to take off vertically fast, and then you’ve got to be able to have the endurance to be able to go where people want to go. And so those are some of the problems that the team’s optimizing around.

And because of the team we have, we’ve been able to have a product that uses today’s battery technologies without any extrapolation on where the numbers are from today. And then that technology is only going to get better year after year, just like the battery in your iPhone or other devices does.

Alex Krutz: That’s great. As I wrap up with every show, talk a little bit about industrial policy. Can you give me your insights or thoughts around reindustrialization, reshoring back to America, maybe even talk about your new factory and what you’re producing?

I know you have international partners, and those are really important. So I don’t want to diminish that by any means, but it would be great to just get your perspectives because I know you’re around the circuit a bit in D.C., and understand your guys’ thoughts around that.

Nikhil Goel: This is an incredibly exciting time where we’re lucky to have so many leaders across Washington, all the way up to the president, really personally engage in eVTOL and help push the entire industry forward.

You’ve got Michael Kratsios, who’s the director of the Office of Science and Technology Policy, and he partnered with Secretary Sean Duffy about a year ago to push forward an executive order. He called it “Unleashing Drone Dominance,” and that included what is now known as the eIPP, the eVTOL Integration Pilot Program. A fancy way to say, “Hey, we’re not going to necessarily wait for this certification to occur just to start testing the technology.”

And so what this is going to do, and this is already in progress, is establish zones across America, places like Texas, Florida, New York, where we can start testing the aircraft tech in a slow, controlled manner to start showcasing it, showcasing how quiet the aircraft are, how safe they are, and start flying in and around our cities.

And I think what that’s going to do is it’s going to get the American public really excited, and it’s going to ultimately help facilitate the certification process as well.

Now, you brought up manufacturing and reindustrialization, which is really important to us. We’ve built a large factory in Covington, Georgia.

Alex Krutz: Yeah.

Nikhil Goel: This factory will ultimately be able to bring hundreds of jobs and then play a very vital role in manufacturing across the ecosystem. And again, that’s been both state and national policy that’s helped accelerate that and catalyze it. So we’re very grateful for all the government support, and I think when it comes to aviation in particular, it’s really key to getting the industry going.

Alex Krutz: That’s great. I look forward to the opportunity to see these Archers coming out of the Covington facility down there at some point. And please tell Adam and Tom and the team I said hello.

With that, Nikhil, thank you for joining The Factory Doctor podcast. Nikhil Goel, the chief commercial officer of Archer. Again, Nikhil, thanks for joining us here.

Nikhil Goel: Thanks for having me.