Lilium stresses ongoing support for government loans
Lilium has hit back at a suggestion from German news publication Der Spiegel that claimed insolvency-saving state assistance for the German eVTOl developer is “now off the table,” stating that over 650 founders and investors have come out in support of a federal guarantee for the Bavarian startup.
With Der Spiegel reporting yesterday that “struggling air taxi startup Lilium, which faces insolvency if it doesn’t raise more capital, [having] been in talks with the German government about the possibility of receiving state support for over a year,” Lilium has been quick to clarify its belief that government-sponsored support remains a viable option – and moreover, represents a wider-reaching investment than solely into air taxis.
“Lilium is to receive a fixed-rate loan of €100 million as a signal to our investors that Germany supports the entry into electric aviation. It’s not about saving a crisis-ridden company with grants,” stated Lilium CEO Klaus Roewe, who added the fully-repayable loan’s conditions “are very advantageous for KfW, and thus for Germany”.
Noting that there has never been a successful aircraft programme in the world that has not received state support (with the initial investments simply too high to be handled purely by the private sector), Roewe further expressed his support for a “very modest investment” to help develop national capabilities. “Do we now want to let the electrification of aviation migrate abroad if the world’s best technology for this has been developed by German engineers? Shouldn’t even pragmatism win over ideology here?” he questioned.
Having spent $102 million in Q1 2024 (with its adjusted cash spend for H1 2024 projected to be between $200-$211 million), Lilium conducted a €114 million capital raise at the end of May. Due diligence proceedings regarding the $100 million loan were also initiated by the German Federal and Bavarian State governments (equal guarantors towards the total amount), something Lilium expected to take six to eight weeks.
This bullishness was called into question when rejection by the Bundestag’s budget committee in October 2024 called the proposed funding into question, with Bavarian backing – conditional on a similar guarantee from the federal government – no longer guaranteed. However, with a decision due soon, it could be ‘make or break time’ for a company already facing heightened liquidity issues.
In a September 2024 US regulatory filing, Lilium noted it expects to “continue to incur significant expenses in the foreseeable future, and [it expects] substantial cash burn in connection with [its] ongoing activities,” notably the completion of type certification and the build of the serial production factory.
