Volocopter boss Dirk Hoke was the first to raise the alarm a few days ago. If his air taxi company is not quickly supported with loan guarantees, then insolvency would have to be considered, or at least a sale to strategic investors from abroad. Now Klaus Roewe, head of the second prominent German air taxi start-up Lilium, is also making serious allegations about politics in the SZ interview.
“I sometimes think that we would be no worse off on the moon than in Germany,” said Roewe. “Only two percent of our private capital is from Germany. Only 20 percent of the employees are from Germany. We have spent over 200 million euros here at the site, but we receive zero support, while our competitors in the USA and China have hundreds of millions in government aid “You ask yourself, why am I doing this here? If there is so little help, what reason do we have to do everything here?” said the Lilium boss.
The start-up is in danger of running out of money
Lilium is developing the Lilium Jet at Oberpfaffenhofen Airport. This is a six-seater electric air taxi that will initially fly up to 175 meters. The first test machine is currently being assembled in one of the hangars, and employees plan to assemble the second from mid-May. The first test flight is scheduled to take place at the end of the year, or at the beginning of next year at the latest.
But the start-up, which has already invested well over a billion euros in the project, is in danger of running out of money. Lilium had about 200 million euros in liquid assets at the beginning of the year, but according to budget planning it will spend about 350 million in 2024. Initially, private investors were happy to put a lot of money into the sector, even if there were no sales and certainly no profits. But the climate has changed dramatically. The comparatively high interest rates make investors think twice about who they give their money to.
Volocopter had already applied for aid at the beginning of 2023, initially in Baden-Württemberg, but was ultimately rejected there with a much smaller package and then turned to Bavaria. The state government, together with the federal government, was supposed to support the company with loan guarantees of up to 100 million euros, but Economics Minister Hubert Aiwanger (Free Voters) blocked the project, even though the CSU would have been in favor of it. The federal government, in turn, linked its aid to a positive vote from Bavaria.
Lilium has applied for guarantees in the same amount in autumn 2023. But Roewe complains: “The situation has not changed since last autumn. In principle, half a year has passed without any progress.” For a start-up, six months is “a lot, a lot of time”. At first, the slow process was seen as “relatively relaxed”. But “today the capital market sees the lack of funding as the German state’s lack of trust in us and electric flying. If we don’t get anything from the state, it will cause total uncertainty in the capital market. The signal is fatal,” says Roewe.
“I’m running my feet sore and talking my mouth off”
For Bavaria, the risk of a guarantee is extremely low. 50 million – the share that would go to the Free State – is almost exactly the amount that Lilium pays in the country per year through taxes and social security contributions. For Lilium, however, the support is extremely important: 100 million euros in guarantees plus a capital increase of a similar amount, in which private investors participate, are enough to finance Lilium until the planned first flight. After that, a new era will begin anyway. Because the first flight triggers advance payments from customers who have firmly ordered Lilium jets. In addition, there will certainly be a certain amount of “euphoria” among investors once the machine is in flight tests.
But until then it is still a long way. “I’m running my feet sore and talking my mouth off in both Berlin and Munich and telling people: You’re not doing us any favors here,” said Roewe. “The fact that we are doing nothing is doing us massive harm at the moment.” Nevertheless, the Lilium boss is combative: “My plan A is to be successful in Germany. My plan B is to be successful somewhere else. Failure is not an option.”
A strategic investor, possibly from China, Saudi Arabia or the USA, could probably take over Lilium for little money and would still have to finance the time until production ramps up. However, a large part of the company would then probably move and disappear from Germany. Volocopter boss Hoke had also outlined a similar scenario. Germany would no longer play a role in the emerging air taxi industry.
There are currently a three-digit number of projects in this segment worldwide. In Europe, Lilium, Volocopter and Vertical Aerospace are the best-known names. In the USA, Joby and Archer are working on air taxis. The two companies are in a significantly better financial situation, also thanks to generous government aid; they are financed at least until 2025. China has made the industry a priority in economic policy. The Brazilian aircraft manufacturer Embraer is also working on it Evean aircraft that, like the Volocopter, is intended to be used within large cities.
Despite all the anger over politics, Roewe emphasizes that everything at Lilium is technically going according to plan. Tests in the wind tunnel confirmed model calculations of the aerodynamics of the Lilium jet; in his opinion, advances in battery technology enable Lilium to fulfill its promises in terms of range. One and a half years are planned for the flight tests, so that the first series machines can probably be delivered in mid-2026. 400 Lilium jets are to be built in Oberpfaffenhofen when production is in full swing.
Of course, everything is subject to the condition that the financing works. This week there was reportedly a positive signal for a change in this regard: Bavaria now apparently wants to commission a report that will assess Lilium’s prospects. It could serve as the basis for a decision on a guarantee. Time is running out.