Lilium, a German electric aircraft startup, is facing financial difficulties and has announced that its main subsidiaries will file for insolvency. The company had been developing vertical take-off and landing (VTOL) aircraft designed to travel at speeds up to 100 km/h. Despite raising over $1 billion from investors and going public on the Nasdaq Exchange in 2021, Lilium encountered setbacks, including a prototype fire in 2020.
The company sought emergency funding from the German government, including a 50 million euro loan, but lawmakers denied the request. Lilium stated that it had not secured sufficient additional funds to continue operations and would file for insolvency under German law in the coming days.
Lilium’s insolvency challenges
Filing for insolvency means Lilium will lose control of its subsidiaries, including Lilium eAircraft, signaling a bleak future for the once-promising startup. CEO Klaus Roewe explained, “We had already conditionally secured additional private capital to complement the KfW loan. However, without the parliament’s approval, and with Bavaria unable to provide the funds alone, we are now facing insolvency.”
The Lilium Jet, priced at $10 million and scheduled for its first flight in early 2025, promised higher passenger capacity, lower noise levels, and better maneuverability compared to competitors.
The company’s shares plunged 61% following the news, closing at a new 52-week low of roughly 20 cents per share. Lilium’s management may retain control under the supervision of a custodian as it seeks new investors or may have to sell the business assets in parts. If it fails to restructure, Lilium would be the first major eVTOL maker to cease operations, while competitors such as Joby and Archer Aviation continue to make progress in the industry.
