For decades, humans have imagined zooming through the sky in flying vehicles to whisk you away to wherever you need to go. That idea has yet to take off, but with modern technology, flying taxis are going from an idea of science fiction to a reality -- and it could be coming to a city near you soon.

Archer Aviation (ACHR 0.23%) is one of the pioneers of flying vehicles, and is one of the best-positioned companies to lead the charge in the budding economy. The company has made some serious headway, and regulators have also made progress in defining rules and regulations for this emerging form of travel. However, Archer Aviation is still a young company and has work to do before flying taxis are mainstream.

Here's what you should know if you're thinking about scooping up shares in the company today.

Archer aims to reimagine urban travel

Archer Aviation is at the forefront of a transportation revolution with its groundbreaking electric vertical takeoff and landing aircraft (eVTOL) technology. The company looks to reimagine urban travel with its Midnight aircraft, designed for vertical take-off, landing, and hovering like a helicopter. Unlike traditional helicopters, eVTOLs use electric motors, delivering a more efficient, quieter, and eco-friendly mode of travel that perfectly suits bustling city life.

Earlier this year, Archer reached a critical milestone, executing a successful transition flight of the Midnight. The aircraft soared vertically before racing forward, reaching speeds of over 100 miles per hour, effortlessly shifting from hover to wing-borne flight, and returning to a smooth vertical landing.

By early September, Archer had completed an impressive 402 test flights and had made significant strides toward achieving its Type Certification. This crucial certification will signify that the Midnight meets rigorous safety standards, paving the way for commercial flights.

Image source: Archer Aviation.

Archer anticipates completing the Type Certification by late 2025, followed by production certification, which will allow it to manufacture at scale.

The FAA is clearing the way for air taxis

Last month, the Federal Aviation Administration (FAA) unveiled its final Special Federal Aviation Regulation (SFAR) tailored for powered-lift pilot certification and operations. This regulation opens the door for the commercialization of advanced air mobility (AAM) travel.

With training and pilot certification protocols now put in place, the FAA is setting the stage for a safe and efficient operational environment for these innovative aircraft. Analysts at Canaccord viewed the decision to provide final regulations before the election as broadly positive for the air taxi industry.

What's next for Archer Aviation?

Archer recently inked a memorandum of understanding with Southwest Airlines, aiming to develop operational plans for electric car taxi networks at California airports. As part of this, it plans for a Los Angeles air mobility network, with an anticipated launch by 2026.

But that's just the beginning -- plans are in motion to electrify key locations in the New York City metropolitan area, Northern California, and South Florida. Looking globally, Archer is setting its sights on the United Arab Emirates, where it hopes to commence operations as early as 2025 and in India by 2026.

The company has already demonstrated impressive momentum, with an order book of 1,141 aircraft with significant pre-delivery payments at the end of the second quarter. Leading the charge, the United Arab Emirates has placed 475 orders, followed by 300 from the U.S. and 200 from India.

On Nov. 7, Archer inked a deal with Soracle, a joint venture of Japan Airlines and Sumitomo Corporation, to bring AAM services to Japan. As part of the agreement, Soracle has the right to order up to 100 aircraft, pushing its indicative order book over $6 billion.

So, is the stock a buy?

Archer Aviation is an exciting company that is developing an entirely new form of urban transportation. The upside potential is massive, with Morgan Stanley projecting that the urban air mobility market could reach $1 trillion by 2040.

ACHR Net Income (TTM) data by YCharts

The company is still in the early stages of its growth story, pre-revenue and pre-commercial operations, and there remains significant execution risk. For example, any hiccups in testing or manufacturing its aircraft could affect its timeline, push back deliveries, delay revenue generation, and potentially increase costs.

For this reason, Archer Aviation stock is ideal for investors with a high tolerance for risk and a long-term investing horizon. The stock remains story-driven for now, as commercialization and cash-flow-positive operations are still years away. If you buy the stock, don't risk more than you're willing to lose, and make sure it's part of a well-balanced portfolio.