Lilium Ends eVTOL Project After Investment Deal Collapses

German electric vertical takeoff and landing (eVTOL) aircraft developer Lilium has ceased operations after a group of investors failed to deliver a promised €200 million ($210 million) investment. The company, which had filed for insolvency in October, was expecting a financial rescue through a takeover deal. However, with the investors unable to complete the transaction, Lilium has announced it will shut down.

Lilium's financial collapse reflects broader challenges in the eVTOL industry, as other companies also struggle with funding shortages and operational setbacks. Recently, Vertical Aerospace faced potential collapse amid a cash crunch and crashes, underscoring the difficulties manufacturers face in bringing electric air mobility to market.

Lilium Aerospace stated:

"While talks about alternative solutions are still ongoing, the chance for restructuring right now is highly unlikely and therefore operations will be stopped. Given the situation, this is deeply regretful for all employees, and Lilium Aerospace thanks them for their resilience and dedication."

Investors Fail to Provide Capital

Lilium had been in the process of restructuring under new ownership after MUC Mobile Uplift Corporation agreed to acquire its German assets in early January. The takeover deal involved investors Christian Reber, Jens Beckers, and Frank Thelen, who had pledged to inject fresh capital into the company. However, despite a notarized financing round, the funds never materialized.

The agreement was expected to be finalized by January 31, but the process continued into February due to what was described as “technical difficulties.” Some employees had been recalled to work in January in anticipation of the company’s relaunch, but the lack of funding has now resulted in the complete shutdown of operations.

Employees Left Unpaid Amid Financial Struggles

As financial uncertainty grew, Lilium employees reported going without pay for weeks. Many had relocated to Germany for their roles and were left struggling to cover living expenses. In response, a GoFundMe campaign was launched earlier in the month to provide assistance.

Lilium’s financial troubles began in October 2023 when it filed for "self-administration" insolvency after the German parliament rejected a proposed €50 million loan guarantee. The failure to secure government support was attributed to political divisions within Germany’s coalition government, with the decision coming just months before the country’s general election on February 23.

Wider Implications for the eVTOL Industry

Lilium is not the only eVTOL company facing difficulties. Another German eVTOL developer, Volocopter, filed for pre-insolvency proceedings in December and is currently searching for new investors. Despite its challenges, the company recently secured an agreement with French charter operator Jet Systems Hélicoptères Services, which plans to use its VoloCity aircraft for air taxi services in Paris.