Lilium majority shareholder Tencent Holdings added to US blacklist
January 8, 2025
The US Department of Defense (DoD) has released an update to its list of ‘Chinese Military Companies’ operating “directly or indirectly in the United States,” including tech firm Tecent; currently the majority shareholder in bankrupt eVTOL company Lilium.
Shenzhen-headquartered Chinese multinational technology company Tencent Holdings Limited is Lilium’s biggest investor, owning around 20% of the company’s shares. However, although its inclusion of the federal register’s so-called blacklist – which requires a company to have some business operations within the US – only specifically precludes companies from participating in DoD contracts, it could spark concern among other US-based business partners.
One prominent Lilium supplier (crucially, with key involvement in the US defence industry) is Honeywell, selected in April 2024 to supply propulsion unit position sensors for the Lilium Jet. Lilium also partnered with Honeywell and Denso to co-develop and manufacture an electric motor in May 2022. Honeywell has been approached for comment.
In May 2023, Tencent pre-funded the purchase of $100 million in Lilium shares, alongside committing to pre-fund the purchase of an additional $75 million (subject to an equal amount being raised via “equity, debt or grants from certain third parties”). In May 2024, Tencent’s affiliate Aceville Pte Limited also participated in Lilium’s $114 million capital raise; funding around $24 million.
Tencent believes that its inclusion in the CMC list “is a mistake,” being “neither a Chinese military company nor a military-civil fusion contributor to the Chinese defense industrial base,” and intends to engage in further dialogue with the US DoD to resolve any misunderstanding. It adds that as it is not engaged in US defense procurement, its inclusion on the list “does not affect the business of the group”.
However, Tencent’s involvement with Lilium may not yet last. On 30 December, newly-established investment consortium MUC Mobile Uplift corporation announced it intends to buy up Lilium’s subsidiaries, aiming to “resume Lilium’s business operations and lead the eAviation pioneer to market maturity and economic success”. However, whilst some of Lilium’s existing shareholders and creditors have expressed an interest in joining MUC, Tencent has remained notably silent.
Nevertheless, in June 2024, Lilium also established its APAC regional headquarters in the Shenzhen-based Bao’an District by way of its recently created Chinese entity ‘Powerful Wing’. At the time, the Lilium CEO Klaus Roewe stated that “China represents a huge opportunity for the eVTOL industry,” believing that “the Lilium Jet is well placed to meet the demands of customers in China and across the region”.
