German air taxi manufacturer Lilium declares bankruptcy

Lilium, a pioneer in the development of electric vertical take-off and landing (eVTOL) aircraft, has declared insolvency and ceased operations. Despite pre-orders, the company was unable to secure long-term financing to fulfill all its tasks and obligations.

Image source: Lilium

Lilium, whose products were expected to hit the market in 2026, previously announced that it had begun assembling its first two all-electric aircraft in Germany. The company also worked to obtain certification from the European Aviation Safety Agency (EASA) and the US Federal Aviation Administration (FAA). It is noteworthy that just this week the FAA finalized the development of rules for the operation of eVTOLs, which Lilium was very much looking forward to.

Despite big plans, including an order for up to 100 aircraft from Saudi Arabia and the sale of four more to British company Volare Aviation, Lilium was unable to secure adequate funding. Last year, the company also worked with a brokerage firm in Texas to sell its air taxi for $10 million. However, the main problem was the lack of a loan of 50 million euros, which was supposed to be guaranteed by the Bavarian authorities.

In 2021, Lilium went public in the United States through a reverse merger with a SPAC (Special Purpose Acquisition Company), but this did not help it avoid financial difficulties. In a recent filing with the US Securities and Exchange Commission (SEC), the company said it was unable to raise the funds needed to continue operating its subsidiaries Lilium GmbH and Lilium eAircraft GmbH.

Now Lilium may lose control over them if there is no investor ready to save the business. At the same time, competitors continue to develop confidently. For example, the American aviation company Joby Aviation received an investment of $500 million from Toyota and FAA certification in 2022, and Archer Aviation, which is also developing eVTOL devices for use in urban infrastructure, in 2023.