Lilium has accumulated losses of almost 1.5 billion euros without generating any revenue. Now the money is running out and bankruptcy is looming. The hoped-for 100 million in aid from the state will probably not be forthcoming.
The fate of Lilium will be decided by the end of the year at the latest. In the semi-annual report now submitted to the US Securities and Exchange Commission (SEC), the developer of the vertical take-off aircraft with electric turbines shows progress in the development of its models – but urgently needs more money. If state financial aid from the federal government and the state of Bavaria is not confirmed in the next few weeks or investors give new money, there is a risk of drastic cuts in business operations, including the application of “current insolvency law”.
The documents literally state that, according to financial planning, “the group requires immediate additional capital to continue to finance its ongoing operations.” In the past, Lilium has repeatedly referred to the need for additional capital until the e-air taxis are approved by the EASA supervisory authority and ready for use. Every shift in the schedule costs money. The first manned flight has been postponed from the end of this year to the beginning of 2025. The market launch is planned for 2026, although this date is no longer explicitly mentioned in the latest report. For the first time, Lilium refers to insolvency law in a stock market report.
Too much uncertainty for state guarantees
Lilium is hoping for state guarantees totaling 100 million euros; the state of Bavaria had agreed to provide half of that if the federal government did the same. As Spiegel now reports, nothing will come of it. The uncertainties in the budget committee are too great. Federal Transport Minister Volker Wissing (FDP) urged parliamentarians to give their approval quickly.
FDP householder Frank Schäffler had previously spoken out against federal aid for the Bavarian air taxi company. The member of the Bundestag told the German Press Agency: “I think help for Lilium is wrong. There is no apparent federal interest in promoting air taxis.” The risk for the federal government is far too high. “If Bavaria wants to accept this subsidy, then it should do so alone. There should be no speculation with federal tax money.”
Meanwhile, another option for Lilium appears to be presenting itself. According to a report in the Süddeutsche Zeitung, France wants to attract the air taxi startup with a government subsidy of 220 million euros. Condition: The company would have to relocate a significant part of its production to France. However, according to the report, the current location west of Munich, where Lilium is working on an electric aircraft for up to six passengers, will be retained. However, according to the report, the French money will not help save the company in the short term.
Volcopter was able to stave off bankruptcy
The second German developer of air taxis, Volocopter, also threatened bankruptcy in the spring. However, this was averted through a capital injection from the previous shareholders, including the Chinese Geely Group.
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Volocopter had also asked for state aid, which initially failed due to the veto of Baden-Württemberg and Bavaria, while the federal government gave the green light. With Lilium it is the other way around. Bavaria has now promised to assume liability for 50 million, while the federal government has not yet approved the same amount in the budget committee.
Lilium's financial dilemma
The financial dilemma of Lilium, based just outside Munich, is reflected in a few figures. According to information provided to the US Securities and Exchange Commission, losses totaling 1.446 billion euros have been accumulated so far – with virtually no sales. In the first half of 2024 alone, the operating loss was 185.9 million euros (same period last year: 128.5 million euros). Due to the positive revaluation of financial assets, the net loss in the first half of the year was 86.9 million euros. The available financial resources (cash) amounted to just under 110 million euros at the middle of the year.
It will take another three to five weeks until the final documents are created. Previous investors have already promised a capital injection of 32 million euros and have made this partly dependent on state aid.
“Power-On”: The power supply is working
The company reports further progress in the development of its electric flight model, which is intended to be used like a small vertical take-off regional aircraft. The first three models are either already finished or production has started. Production of the fourth model is scheduled to begin in the first half of 2025.
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Lilium considers the fact that the “power-on” milestone has now been reached in the final design of the first model to be a major development success. For the technicians, it is proof that the power supply and the connected electronics are working as planned. As with some electric cars, the power grid is based on a 900-volt architecture, which allows the batteries to be charged relatively quickly.
This article first appeared on World and was updated on October 11, 2024. With material from dpa.
Source: https://www.businessinsider.de/gruenderszene/business/lilium-flugtaxi-startup-warnt-vor-insolvenz-keine-staatshilfe-frankreich-produktion/
