German aerospace startup Lilium, known for developing flying electric passenger drones, is on the brink of insolvency, a potential downfall for a company once heralded as Europe’s leading chance to revolutionize urban travel with electric air vehicles, or “eVTOLs.” These electric vertical take-off and landing aircraft, commonly called flying cars or air taxis, are being developed across the globe by various startups. Lilium’s financial troubles have led it to seek emergency funding from the Bavarian state government, after a €50 million ($54 million) loan request was turned down by Germany’s federal lawmakers.
The proposed loan, part of a €100 million convertible facility, would have been backed by the state-owned KfW bank but did not receive approval from the federal parliament’s budget committee. Bavarian Economy Minister Hubert Aiwanger criticized the federal government’s decision, stressing the need for support in pioneering industries. Danijel Višević, co-founder of World Fund, pointed out the disparity between how Lilium was being treated and the backing that U.S. companies like Tesla previously received, highlighting misconceptions about air taxis being luxury items rather than feasible infrastructure solutions.
Initially founded in 2015 by four students, Lilium gained swift prominence and unparalleled investment from major firms like China’s Tencent. The company transitioned from developing a proprietary ride-hailing service to collaborating with airlines and airport operators to realize its vision of easing urban congestion. However, after going public on the Nasdaq through a SPAC merger in 2021, Lilium’s valuation has suffered a steep decline, with its stock plummeting by over 95% from its peak worth of $3.3 billion.
Despite partnerships with Lufthansa, Saudia, and Groupe ADP, Lilium’s ambitious ventures have come under threat due to financial instability, encapsulating the precarious journey of high-risk, high-reward aerospace innovation in today’s economy.
Original Story https://www.cnbc.com/2024/10/23/lilium-faces-insolvency-as-air-taxi-firm-struggles-to-raise-cash.html
Category :
Tags:
