Lilium: When the Technology Is Real and Revenue Is Still Years Away

Lilium was founded in Germany in 2015 and developed an electric vertical take-off and landing aircraft intended primarily for regional mobility.

Its approach differed from many eVTOL programmes focused on relatively short journeys across cities and suburbs. The Lilium Jet used electric ducted fans integrated into its wings and canards and was intended to cover longer regional routes, creating the possibility of connecting locations where the alternative might involve several hours by road or a conventional flight.

The commercial logic was understandable. Regional transport represents a sizeable market, while electrification offered the prospect of lower operating emissions and a different cost structure if the aircraft could reach certification, production and sufficient utilisation.

Customers were interested as well. In July 2024, Saudia Group agreed to acquire 50 Lilium Jets with options for another 50. Reuters reported the potential value of the transaction at approximately US$700 million, making it Lilium’s largest order at the time. The first aircraft under the agreement were expected to be delivered from 2029.

A US$700 million agreement can be important evidence of customer interest while having limited ability to finance a company spending tens of millions of euros every quarter. The economic value depends on deposits, payment schedules, certification conditions, cancellation provisions and the point at which aircraft deliveries convert the order into cash.

An order book can validate demand while doing very little to solve next month’s liquidity.

Technology companies sometimes become accustomed to development models in which customers begin using a product while it is still improving. Revenue and development can overlap, allowing the market itself to help finance product maturity.

Commercial aviation offers far less room for this approach. Aircraft development requires the design organisation, aircraft architecture, systems, components, manufacturing processes and compliance evidence to progress through a lengthy regulatory programme. Ground testing and flight testing generate further evidence, followed by type certification, production approval and the operational infrastructure required by customers.

Lilium had already achieved a significant organisational milestone when EASA granted Design Organisation Approval in November 2023. The approval confirmed that Lilium possessed the organisation, procedures, competencies and resources required to design aircraft within the relevant regulatory framework.

The remaining certification work still carried considerable cost and schedule uncertainty. For the board, I would therefore want to know which technical uncertainty had actually disappeared after each milestone and whether investors were likely to value that reduction in risk strongly enough to finance the next stage.

Lilium’s earlier plans had envisaged certification and commercial entry into service around 2024. As the programme developed, those expectations moved.

By 2023, the company was targeting the first piloted flight for the second half of 2024 and type certification around late 2025. During 2024, the first piloted flight moved again, this time into early 2025, while the company continued to target initial customer deliveries for 2026.

None of these changes is particularly surprising when viewed as an aerospace programme. New aircraft regularly encounter technical discoveries, supplier issues, testing requirements and regulatory questions that alter the schedule.

They become much more significant when viewed from the cash flow statement. A six-month engineering delay is also six additional months of payroll, supplier payments, facilities, testing and corporate costs. Production equipment may already have been ordered. Specialist teams need to remain employed. Aircraft and components continue to be built even though commercial revenue has moved further into the future.

A schedule delay has a second identity: it is a financing requirement.

On 1 October 2024, Lilium announced that it had completed the first systems power-on of MSN 1, its first in-production Lilium Jet.

The aircraft was intended for ground testing and certification work, while MSN 2, then in final assembly, was expected to become the first Lilium Jet flown with a pilot aboard in early 2025.

For the engineering organisation, this represented years of work becoming physical hardware. For investors looking at the same company, considerable uncertainty still remained. The aircraft had yet to complete its first piloted flight, the flight-test programme lay ahead, type certification remained unfinished, production capacity required investment and customer deliveries were still in the future.

Three weeks later, Lilium’s principal German subsidiaries announced that they would seek insolvency proceedings.

During 2024, Lilium sought government-backed financing involving a proposed €100 million KfW convertible loan, supported by guarantees from the German federal government and Bavaria.

The federal budget committee declined to approve the expected €50 million federal guarantee, while an agreement with Bavaria for the other guarantee was also unresolved. Lilium subsequently stated that it could no longer continue financing its principal German operating subsidiaries.

It is easy to turn this part of the case into an argument about whether the German government should have supported a strategically important aerospace company. I find another question more useful.

What would €100 million actually have bought?

If the financing could have carried Lilium through a major flight-test milestone that materially reduced technical risk and opened access to a larger pool of capital, the strategic value of the money might have been considerable. If the same amount would simply have financed several additional months before another large funding requirement arrived, the calculation becomes very different.

Runway by itself is only a period on a calendar. Its value depends on what the company can prove during that period.

The Lilium case also exposes a problem that appears frequently in aerospace, defence technology and other long-cycle industries. Companies announce orders, options, reservations, letters of intent and memoranda of understanding, and eventually all of these numbers can find their way into a presentation under the broad heading of commercial pipeline.

Their economic characteristics can be very different. Lilium itself described its pipeline of more than 780 aircraft as including firm orders as well as memoranda of understanding.

For the board, I would want the pipeline separated according to financial quality.

Two companies can each announce an order pipeline of 500 aircraft while possessing very different financial positions. The headline number cannot tell the board how much development the customer is helping to finance.

Lilium entered the public market through a SPAC transaction in 2021, during a period of strong investor interest in electric aviation and other emerging technologies.

The transaction gave the company access to substantial development capital, although the underlying sequence of the aerospace programme remained unchanged. Engineering, flight testing, certification, industrialisation and commercial delivery still had to occur in roughly that order, with capital required throughout.

By 2024, investors had become more selective across the eVTOL sector, while certification programmes continued requiring large amounts of money. The result was an uncomfortable mismatch between the capital environment in which several eVTOL companies had been financed and the length of the industrial programmes they were attempting to complete.

A company whose business model requires repeated external financing should treat future access to capital as one of its central operating risks.

Lilium was pursuing a technically distinctive aircraft with regional range and a ducted-fan propulsion architecture.

If successful, that approach could have created an interesting position in regional electric aviation. It also required several demanding technical elements to mature together, including propulsion, batteries, aerodynamics, thermal management, aircraft weight, noise performance and certification.

This creates a difficult strategic choice for boards. A technically ambitious product can offer stronger differentiation and potentially support a larger future market, while a more limited first product may allow the company to reach testing, certification and revenue earlier.

I would resist treating either route as automatically superior. The decision becomes credible when the company has enough capital, engineering capacity and organisational resilience for the product it has chosen to build.

Technical ambition and financial capacity belong in the same conversation.

Joby Aviation provides a useful comparison, although the companies have different aircraft, commercial models and certification programmes. What interests me most is the difference in financial capacity.

In October 2024, only one day after Lilium announced the power-on of its first in-production jet, Toyota announced another US$500 million investment in Joby, taking Toyota’s planned cumulative investment in the company to US$894 million. The funding was explicitly intended to support certification and commercial production.

By 30 June 2026, Joby reported approximately US$2.26 billion in cash, cash equivalents and short-term investments. Five aircraft were flying and another twelve were in production, while the company was still working through the fifth and final stage of the FAA type-certification process. Joby used approximately US$202 million of cash and short-term investments during the second quarter of 2026.

This comparison tells us something important because Joby is still spending heavily after years of development. The capital requirement did not disappear simply because its aircraft progressed further.

Its larger balance sheet gives the company more capacity to absorb certification work, manufacturing investment and schedule changes while continuing the programme. That capacity matters enormously in a long-cycle regulated industry because it allows the company to accommodate reality when the original timetable changes.

Lilium’s story continued after the October 2024 insolvency filings.

In December 2024, a consortium operating through Mobile Uplift Corporation agreed to acquire the operating assets of Lilium GmbH and Lilium eAircraft GmbH. The company presented the deal as a route towards restarting operations, with the transaction expected to support a financial restructuring. The principal transfer of operating assets took place on 7 January 2025.

For a brief period, the engineering programme appeared to have another opportunity. The expected investment then failed to materialise.

In February 2025, Lilium entered insolvency again after the rescue funding was not provided as planned. German public broadcaster ARD reported that the investor consortium had been expected to provide around €200 million and that the promised funds had not arrived.

October’s problem had already been the availability of capital required to continue development. The December transaction temporarily changed who might provide that capital. It did little to change how much financing an uncertified aircraft programme still required.

Lilium’s corporate failure did not make its engineering work disappear.

In October 2025, Archer Aviation won the competitive process to acquire approximately 300 Lilium patent assets covering areas including ducted fans, high-voltage systems, battery management, flight controls, aircraft design and electric propulsion. The purchase price was €18 million. Archer stated that Lilium had spent more than US$1.5 billion developing technologies associated with its programme.

Years of engineering investment therefore created intellectual property that another eVTOL manufacturer considered worth acquiring, although the insolvency process produced a price vastly below the cumulative development expenditure.

That difference does not tell us that the engineering lacked value. It shows what happens to bargaining power when a company can no longer finance its own route to commercialisation.

By November 2025, Lilium eAircraft’s EASA Design Organisation Approval had also been surrendered. The company that had spent years building the regulatory organisation required to develop the aircraft had reached the end of that programme before completing certification.

The same progression can develop inside a drone company far earlier than management expects, especially in defence, maritime applications and regulated civil operations.

A prototype may perform well in demonstrations while production remains expensive and inconsistent. A defence customer can show genuine interest while procurement moves through testing, budgeting, tendering and approval cycles measured in years. An autonomous system can achieve impressive field performance while integration, certification, documentation or cybersecurity requirements remain incomplete.

Meanwhile, payroll arrives every month.

I would therefore treat the development programme of a drone company as several connected timelines: engineering maturity, field validation, regulatory approval where relevant, production readiness, customer procurement and financial runway.

Those timelines rarely move at the same speed. The board’s job is to understand where they need to meet.

An engineering team reaching technical readiness in twelve months offers limited comfort when the company has eight months of liquidity and its next customer payment arrives after procurement approval eighteen months later.

Customer interest can be genuine while the timing still kills the company.

The easiest interpretation of Lilium is that the company ran out of money before it could certify its aircraft. That description is accurate, although it leaves most of the useful analysis untouched.

The more interesting issue is how a company with years of engineering work, regulatory progress, production-conforming aircraft and substantial customer interest reached a position where continuation depended upon another financing decision arriving at precisely the right moment.

The answer sits in the distance between technical progress and commercial cash generation. In businesses like Lilium, that distance can be measured in years and hundreds of millions of euros.

Boards therefore need to govern capital with the same seriousness that they govern technology. An aircraft programme can be technically credible and still require far more capital than originally expected. Customer demand can be genuine while revenue remains distant. A large commercial pipeline can coexist with immediate liquidity pressure. Successful fundraising can finance several milestones while leaving later ones exposed.

Lilium reached the point where its first production-conforming aircraft was being powered on, its first piloted flight was approaching, customers were waiting and the company had already built much of the regulatory organisation required to continue. The corporate structure failed before the aircraft programme could complete the journey from engineering to commercial operation.

A company developing complex technology needs enough capital to reach the point where its next milestone changes the economics of the business.

The board should know where that point is, how much it costs to reach it and what happens when reaching it takes a year longer than expected.

In aerospace, drones, robotics, pharmaceuticals and other long-cycle technologies, those questions belong at the centre of strategy because eventually even very good engineering has to survive long enough to meet a paying market.