Lilium, a German electric aircraft startup, has announced that it will cease operations and lay off approximately 1,000 workers after failing to secure financing and exit insolvency. The company, which had raised over $1 billion before going public, made the announcement on December 23, 2024. However, a consortium of investors has agreed to acquire two Lilium subsidiaries, enabling the company to potentially restructure and emerge from insolvency.
Lilium co-founder Patrick Nathen shared the news in a public statement, expressing his heartbreak over the situation. The layoffs impact the majority of Lilium’s workforce and follow an earlier round of cuts on December 16, when about 200 employees were let go. Lilium had been developing vertical take-off and landing (VTOL) aircraft capable of speeds up to 100 km/h.
Despite securing backers like Tencent and orders, including one for 100 electric jets from Saudi Arabia, the company faced significant challenges. It had gone public on the Nasdaq Exchange in 2021 via a reverse merger with a blank-check company, SPAC Qell, but struggled to progress its technology to a marketable stage. In October, Lilium announced its intention to declare insolvency after failing to raise emergency funds from the German government.
Under insolvency proceedings, Lilium lost control of its subsidiaries, and KPMG was appointed to handle the sale process.
Lilium insolvency leads to massive layoffs
On Christmas Eve, Lilium announced that a consortium of investors, operating under the name Mobile Uplift Corporation, had agreed to acquire Lilium and restart the company’s operations.
CEO Klaus Roewe said, “We are very pleased to announce the signing of an investment agreement with a very experienced consortium of investors, which is a major breakthrough. Deal closing at the beginning of January will allow us to restart our business.”
The consortium will acquire the operational assets of Lilium’s subsidiaries, Lilium GmbH and Lilium eAircraft GmbH. Proceeds from the sale will be distributed according to German Insolvency Law.
Lilium has also stated that Mobile Uplift Corporation intends to reemploy staff after the transaction closes. Lilium is not alone in facing financial struggles within the eVTOL market. Volocopter, another European eVTOL maker, is also experiencing funding difficulties, with China’s Geely in talks to buy a majority share.
Similarly, Britain’s Vertical Aerospace received a significant boost from Mudrick Capital Management, which committed $50 million and converted $130 million in debt on December 23. As these companies look to 2025, a critical year is anticipated for the European urban air mobility market, with potential test flights and certifications on the horizon. The news marks a significant setback in the quest for sustainable aviation but also offers a glimmer of hope for Lilium’s future.
