PARIS, Jan 4 (Reuters) — Carmaker Stellantis (STLA.MI) will help build Archer Aviation’s (ACHR.N) electric aircraft and increase its stake in the U.S. company, the two firms said Wednesday, driving Archer’s shares up nearly 17%.

Industrial firms and new startups are flocking to invest in air taxis, which can take off and land vertically to ferry travelers to airports or on short trips between cities, allowing them to beat traffic.

The vertical take-off and landing (eVTOL) Midnight aircraft, which can carry four passengers and a pilot with a range of 100 miles (161 kms), will be manufactured in Covington, Georgia, in 2024, with a production target of 2,300 aircraft annually, Archer and Stellantis said in a joint statement.

It is designed for back-to-back short distance trips of around 20 miles, with a charging time of approximately 10 minutes in-between.

“The goal is for Stellantis to mass produce Archer’s eVTOL aircraft as its exclusive contract manufacturer,” the companies said.

Stellantis, created from the merger of Fiat Chrysler and France’s Peugeot, will provide up to $150 million in equity capital for potential draw by Archer at its discretion in 2023 and 2024, subject to achievement of certain business milestones.

Stellantis will also increase its existing stake in Archer through stock purchases in the open market, though its CEO Carlos Tavares said it wanted to keep a minority holding.

“We are here to support, not to control,” he said at a press conference at Archer’s headquarters in San Francisco.

Stellantis aims to become a long-term, cornerstone investor in Archer, the companies said.

On why the car company is branching out into aircraft manufacturing, Tavares said: “You can enjoy freedom of mobility with any kind of mobility tool.

“It can be a bicycle, it can be a car, it can be an aircraft, it can be anything else, so any high technology equipment which can deliver freedom of mobility safe, clean and affordable, is what we are committed to.”

Other eVTOL ventures involving the car industry include a collaboration between Hyundai Motor Group’s air taxi unit and aerospace supplier Honeywell International to develop avionics systems.

The auto industry is well ahead in battery design but the weight of current-generation batteries is seen as a limiting factor for the range and payload of the new vehicles.

In November, European planemaker Airbus (AIR.PA) forged a partnership with French carmaker Renault (RENA.PA) to develop a new generation of electric batteries and hybrid technology for cars and planes.

Reporting by Gilles Guillaume; writing by Silvia Aloisi; editing by Richard Lough and Emelia Sithole-Matarise