Lilium Runs Out of Money – CleanTechnica

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Lilium has been developing one of the more attractive eVTOL (electric vertical takeoff and landing) aircraft over the past decade or so. It also had some positive news recently. A few months ago, I noted that the company had logged a good chunk of future sales in the UK. Three months before that, Lilium had logged sales of 20 jets in Florida. Also six months ago, I reported on the company’s plans to expand into high-volume production facilities in France. Alas, all of these things may be dead in the water, because Lilium just ran out of money.

A few days ago, Lilium explained it in this way: “Lilium N.V. (Nasdaq: LILM), a leading electric aircraft manufacturer and pioneer in Regional Air Mobility (RAM), today announced that its principal German subsidiaries will apply for self-administration proceedings in the next few days with the competent court in Germany. This follows a lengthy and complex government approval process for a loan from KfW, which failed in the Budget Committee of the German parliament.

“Lilium’s international competition is receiving grants and loans in the U.S., France, China, Brazil, and the UK. Therefore, German government support was seen by Lilium investors as critical to retain market confidence and potential future investment.”

Now, “Lilium has now officially filed for insolvency for its two most important subsidiaries,” electrive reports. “According to the German publication Handelsblatt, this means that more than 1,000 employees at the administrative headquarters in Gauting and at the special airport in Oberpfaffenhofen near Munich now have to fear for their jobs. Potentially around 1.5 billion euros in investor funds have been lost.”

Getting back to Lilium’s explanations, here’s more: “Our plan was to obtain shareholder investment in a new funding round anchored by a German government backed loan of €100 million,” Lilium CEO Klaus Roewe said. “We had already conditionally secured additional private capital to complement the KfW loan. However, the Budget Committee was unable to agree on the loan and Bavaria couldn’t do it alone.”

Going on, the company writes: “German government support of the KfW loan was a closing condition to already committed private funding and without this support  Lilium was left with no alternative but to cause the principal German subsidiaries to file for self-administration.

“Lilium was also in advanced discussions regarding a French government guarantee of a €219 million loan to finance a battery factory and an assembly line in the Southwest of France. Following the Lilium Jet’s planned first flight in early 2025, Lilium anticipated receiving pre-delivery payments and new investment to finance the company into 2026 when the company expected delivery would begin on its current order pipeline consisting of firm orders, reservations, options, and memoranda of understanding for more than 780 Lilium Jets to operators in the U.S., South America, Europe, Asia, and the Middle East.”

More than 780 electric jets. Naturally, the biggest part of the challenge is getting from 0 (zero) to mass production, and there was no guarantee Lilium ever would. But it’s a bit shocking to see a company with this much consumer demand and seemingly all the momentum in the world shut down suddenly.

That said, the story probably isn’t over yet. “Self-administration, if and when granted by the court, aims to preserve and continue the business that is the subject of the proceedings. Management would retain control and would continue operating the business under the supervision of a custodian,” Lilium explains. “The procedure is often used to initiate investment by new parties or a process to sell the company’s assets and/or business as a whole. In Germany, the procedure is generally perceived as providing an improved chance for a successful in-court business restructuring.”

“We deeply regret the insolvency and its consequences for all stakeholders at such a crucial stage of our company’s development,” CEO Klaus Roewe said. “However, while there is no guarantee for success in insolvency proceedings, we hope that the Lilium Jet will get a chance for a fresh start after the self-administration process is completed.”

In response to an article we wrote about Lilium in May 2019, Elon Musk responded “Good design imo.” Some people are now wondering if Musk could end up buying Lilium. I could see that happening, in theory, but he seems to be heavily distracted by other matters at the moment.