Frankfurt, Germany — A German flying taxi company, Lilium, narrowly avoided closure this week as a group of investors stepped in to acquire the struggling startup, sparking renewed discussions about the level of support for innovative companies in Germany.
Lilium, which filed for bankruptcy in October, had been on the brink of shutting down entirely. On Tuesday, the Munich-based company announced it had reached a deal with Mobile Uplift Corporation, a newly formed entity backed by European and North American investors, to acquire its assets. The details of the agreement, including the purchase price, were not disclosed.
“This marks a major breakthrough for our company and will allow us to restart operations,” said Lilium CEO Klaus Roewe. The deal is expected to be finalized in early January.
A Pioneering Vision with Challenges
Founded in 2015, Lilium has been developing electric-powered vertical take-off and landing (eVTOL) jets capable of carrying four to six passengers up to 175 kilometers (110 miles) at speeds of 250 kilometers per hour. The company has secured 100 firm orders and hundreds of pre-orders, including a deal with Saudi Arabian airline Saudia to purchase 50 aircraft, with an option for 50 more.
However, Lilium has yet to conduct a manned test flight, with trials scheduled for next year and the first customer deliveries planned for 2026. The ambitious development timeline has strained the company’s finances, despite raising $1.5 billion from investors, primarily in the U.S. and China.
Financial Struggles and State Support Debate
The high development costs forced Lilium to seek emergency funding from the German government. However, in October, the German parliament rejected a proposed €50 million loan guarantee, leaving the company to seek private investors. The financial strain led to widespread layoffs, with over 1,000 employees losing their jobs. Many are now expected to return following the rescue deal.
Lilium’s struggles have reignited a debate in Germany about whether the country provides adequate support for startups. Critics have long argued that Germany lags behind nations like the U.S. in funding young, innovative companies. The German Startup Association warned that Lilium’s failure could harm the country’s reputation as a hub for tech innovation.
Some commentators, however, have cautioned against using public funds to support startups, arguing that private investment should determine their viability. “The firm didn’t struggle because the state refused to act as an investor,” noted a Sueddeutsche Zeitung commentary.
Broader Implications for the Flying Taxi Industry
Lilium is not alone in facing challenges. Another German eVTOL manufacturer, Volocopter, recently canceled planned test flights during the Paris Olympics due to delays in engine certification. The financial and technical hurdles in the flying taxi sector highlight the competitiveness of this emerging market.
As the rescue deal moves forward, Lilium aims to regain momentum and secure its place in the evolving eVTOL industry, while broader questions about Germany’s approach to fostering innovation remain unresolved.
