“Lilium Faces Financial Crunch-Time After Potential Loss of German Government Loan”
What a week it has been for German company, Lilium. Twitter was all aflutter on Tuesday when a series of tweets set alarms bells ringing across the eVTOL industry.
One stated, ”Struggling air taxi startup Lilium, which faces insolvency if it doesn’t soon raise more capital, has been in talks with the German government about the possibility of receiving state support for over a year — a lifeline that is now off the table, reported Der Spiegel yesterday.”
This was followed by:-
“In response, over 650 founders and investors — and counting — have come out in support of a federal guarantee for the Bavarian startup, having signed an initiative called ‘Enable loans for Lilium, strengthen Germany as a deep tech location.’”
Germany’s BILD newspaper published an interview that day with Lilium co-Founder, Daniel Wiegand, who was quoted, “If we get a no on Wednesday, we will not be able to keep the company in its current form in Germany. This means that this future technology will either move abroad – or go bankrupt. It’s about Germany’s technological leadership in electric flying. That would benefit everyone.”
The company has been waiting close on a year for a decision by the federal government on a loan of EUR50 million. If agreed, the state of Bavaria will match that sum. Yet, according to news reports, the government coalition is split over the decision, with Federal Chancellor Olaf Scholz (Social Democratic Party SPD), the Greens and Transport Minister Volker Wissing (Free Democratic Party, FDP) are understood to be in favour of the loan, while some members of the FDP are against it.

Lilium’s eVTOL Jet Wowing the Crowd at the Farnborough Airshow in July (Credit: Lilium)
The online news website, sifted.eu, also posted an article that same morning, headlined, “German startup founders and investors call on federal government to support struggling air taxi startup Lilium.” with a sub-heading, “The company faces insolvency if it doesn’t soon raise more capital.”
Written by Miriam Partington, she says, “In a press release, the German Startup Association makes clear that if Germany wants to compete globally, it needs to back startups working on innovative deep-tech technologies. The Association was quoted, “We want to make our country a globally leading deep-tech location by 2030. This area is capital and research intensive, but it is here that the future of Germany as a location for innovation will be decided.””
The signed names supporting Lilium include Daniel Metzler, co-Founder and CEO of Isar Aerospace; Bastian Nominacher, co-Founder of Celonis; and Miriam Wohlfarth, co-Founder and CEO of Banxware; as well as Verena Pausder, the Chairperson of The German Startup Association.
In Lilium’s latest accounts, the company said it has secured commitments of approximately EUR32 million from existing investors ‘to meet the immediate liquidity requirements’. Although, securing some of the money depends on whether the federal government chooses to support Lilium with state aid.
Christoph Stresing, MD of the German Startup Association, remarked, “Political decisions should not only take into account the consequences of action, but also the consequences of inaction. In the case of Lilium, this means that if the federal government does not grant the EUR50 million guarantee in question, this would probably not only result in the literal collapse of the company itself, but there would be a risk of lasting damage to the reputation of Germany as a deep-tech location, the long-term costs of which are difficult to quantify.”

Christoph Stresing
In a LinkedIn post on Monday, Lilium CEO Klaus Roewe, wrote that the company wants to receive a fixed-rate loan of EUR100 million as a signal to its investors that Germany supports the entry into electric aviation.
“It is not about rescuing a crisis-ridden company with lost subsidies,” he pointed out. “The loan is fully repayable, the conditions are very advantageous for KfW (the German state-owned investment bank), and thus for Germany, and it is highly likely that this will mobilise further private investor money from home and abroad.”
Lilium has always been the underdog and punched above its weight. The eVTOL company has never had the financial backing of a large car manufacturer or the support from a major airline, yet somehow has kept gathering momentum, where in the Middle East it has not only competed with leading eVTOL companies like Archer and Joby for potential sales, but is showing that European aviation start-ups are just as capable as American or Chinese ones.
Therefore, it would be gutless and myopic behaviour from the German government, if it decides not to financially support Lilium. This could not only cause the eVTOL company to go bankrupt, but leave a terrible and rancid smell of failure across the European Union.
Let us hope Lilium’s gamble of political pressure via the media pays off for both the company and the eVTOL industry as a whole. After the recent humiliation of another German electric air taxi company, Volocopter, being refused flights over Paris during the recent Olympic Games due to yet more “political wrangling”, this potential bankruptcy would be a devastating blow for Europe’s nascent green aviation industry.
For more information
(News Source: https://sifted.eu)
(The impressive Lilium Jet displayed at Farnborough Airshow in July — Credit: Lilium)
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