1. Executive Summary:
Lilium, a German aerospace company founded in 2015, is at the forefront of developing the Lilium Jet, an electric vertical take-off and landing (eVTOL) aircraft designed for regional air mobility. The company’s vision centers on enabling faster and more sustainable travel by establishing direct connections through a novel air transportation network. This report aims to analyze Lilium and specifically address the viability of an investment in the company at this juncture. However, a critical initial observation, supported by recent events, is the significant financial instability surrounding Lilium, evidenced by multiple insolvency filings and a recently collapsed investment deal. These repeated financial setbacks are not isolated incidents but rather indicate fundamental vulnerabilities that significantly impact the assessment of any potential investment. Given the current financial turmoil, a cautious stance on investing in Lilium is warranted.
2. Company Profile and Technology:
2.1. Lilium: A Vision for Regional Air Mobility:
Established in 2015 and headquartered in Gauting, Bavaria, Germany, Lilium’s core mission is to revolutionize how people and goods travel regionally by creating a sustainable and accessible high-speed transportation system. The company aspires to facilitate quicker journeys than existing high-speed alternatives, thereby forging new direct connections through an innovative air network. Lilium has assembled a substantial team of over 1000 individuals, comprising engineering experts, global business executives, and seasoned aviation leaders. Notable figures within the leadership include Chief Operating Officer Yves Yemsi, who previously held a senior procurement and supply chain role at Airbus, and Lead Test Pilot Markus, who formerly served as the Chief Pilot for Solar Impulse. While this demonstrates the company’s ambition and access to experienced personnel, the recent suspension of operations suggests that a talented team alone cannot guarantee success in the absence of a robust financial foundation.
2.2. The Innovative Lilium Jet:
Lilium’s primary product is the Lilium Jet, an all-electric aircraft engineered for vertical take-off and landing (VTOL) capabilities. A distinctive feature of the Lilium Jet is its propulsion system, which utilizes 30 ducted fans to generate thrust for both vertical ascent and descent, as well as efficient forward flight. The initial prototype, known as the Lilium Jet (2x), was designed to accommodate two occupants and achieve a cruise speed and range of 300 units each. It is likely these units refer to kilometers per hour (or miles per hour) and kilometers (or miles), respectively, though the exact units are not specified. Later iterations of the aircraft aimed to increase passenger capacity to between four and six. The design emphasizes an aerodynamic form to maximize efficiency and speed during horizontal flight, with an anticipated initial operating range of approximately 110 miles for its entry into the US market via Houston. The use of ducted fan technology sets Lilium apart from many competitors who employ open-rotor designs. This approach potentially offers advantages in terms of noise reduction and aerodynamic efficiency but also introduces unique engineering and certification complexities.
2.3. Development Milestones Before the Financial Crisis:
Prior to its recent financial troubles, Lilium had announced plans for the first flight of a full-sized Lilium Jet in early 2025. The company also reported achieving key developmental milestones, such as the first systems power-on of the initial Lilium Jet (MSN 1) in October 2024. This was considered a significant step towards the aircraft’s maiden flight, confirming that the aircraft was being built according to Lilium’s design specifications and that the flight systems were functioning correctly. Furthermore, Lilium GmbH reported continued progress in both its commercialization efforts and the testing program for the Lilium Jet in early December 2024. This included the successful completion of a landing gear drop test in November 2024, a critical safety test required for manned flight and conducted in alignment with the European Union Aviation Safety Agency (EASA) regulations. While these achievements indicated forward momentum in the company’s technological development, the subsequent financial collapse suggests that these milestones alone were insufficient to ensure the company’s long-term financial health and operational continuity. There appears to be a disconnect between the reported technical progress and the underlying financial stability necessary to bring the technology to market.
3. Market Landscape:
3.1. The Burgeoning Global eVTOL Market:
The electric vertical take-off and landing (eVTOL) aircraft market is projected to experience substantial growth in the coming years, with forecasts indicating a multi-billion dollar market by 2030 and beyond. While specific market size predictions vary across different reports, ranging from $3.47 billion by 2030 to significantly higher figures, the overall trend points towards significant expansion. Key factors driving this growth include increasing urbanization and the resulting traffic congestion in cities, the growing global emphasis on sustainable transportation solutions to reduce carbon emissions, and continuous advancements in critical technologies such as battery energy density and autonomous navigation systems. Beyond passenger transport, eVTOL technology is expected to find applications in various sectors, including cargo delivery for logistics, emergency medical services to improve response times, and surveillance for security and other purposes. The strong projected growth of the eVTOL market presents a considerable opportunity for companies in this space. However, Lilium’s current financial crisis and the cessation of its operations severely impair its ability to effectively participate in and benefit from this expanding market.
3.2. Regional Dynamics and Lilium’s Global Ambitions (Before Collapse):
The development and adoption of eVTOL aircraft are progressing at different paces across the globe. North America and the Asia-Pacific region, particularly China, are considered leaders in this sector, with Europe also exhibiting significant activity and investment. China, for instance, has a government-backed initiative focused on developing the “low-altitude economy,” which includes eVTOL technology. Lilium, prior to its recent financial difficulties, had articulated ambitious plans for establishing regional air mobility networks across several continents. These plans included networks in Europe, stretching from Venice to Frankfurt and encompassing the Benelux countries and the French Riviera. In the Far East, Lilium had intentions to establish networks in the Philippines and China. The company also had agreements and Memoranda of Understanding (MOUs) in place for potential networks in Latin America (Brazil) and the Middle East (Saudi Arabia and Dubai). These partnerships involved collaborations with airlines, airport operators, and infrastructure providers. While Lilium demonstrated a strong global vision and secured partnerships in key regions, the company’s current insolvency casts significant doubt on the future of these collaborations and the realization of its international network ambitions. Maintaining and expanding such global initiatives requires substantial and consistent financial resources, which Lilium presently lacks.
4. Competitive Analysis:
4.1. A Crowded Field of eVTOL Innovators:
The electric vertical take-off and landing (eVTOL) market is characterized by a significant number of companies actively developing aircraft for various applications. Prominent players in this competitive landscape include Joby Aviation, which is focused on urban air mobility and aims for FAA certification for passenger flights. Archer Aviation is another key competitor developing eVTOLs for short-haul urban travel with plans for commercial operations in 2025. Volocopter, a German company, has been a pioneer in the industry, focusing on air taxis for urban environments. EHang, a Chinese company, has achieved certification in China for passenger-carrying autonomous eVTOL flights. Vertical Aerospace, based in the UK, is developing the VX4 aircraft for urban and regional transport. Beta Technologies is gaining attention for its ALIA-250 eVTOL, targeting logistics and medical transport. Eve Air Mobility, a spin-off from Embraer, is developing an eVTOL for urban air mobility networks. Even established aerospace giants like Airbus and Boeing (through its investment in Wisk Aero) are actively involved in the eVTOL sector. These companies employ various technological approaches, including tilt-rotor, multirotor, and lift-plus-cruise designs, and target different segments of the emerging market. The sheer number of competitors, many with significant funding and strategic partnerships, underscores the intense competition that Lilium faces in this nascent industry.
4.2. Lilium’s Position and Challenges in the Competitive Arena:
Lilium’s ducted fan technology represents a unique approach in the eVTOL market, potentially offering advantages in noise reduction and efficiency compared to the more prevalent open-rotor systems used by many of its competitors. While Lilium was among the early entrants in the eVTOL space, some expert opinions suggest that the company has fallen behind certain competitors in terms of tangible progress towards commercialization. Notably, another European eVTOL company, Volocopter, also entered bankruptcy proceedings in March 2025 , indicating potential broader financial challenges for eVTOL companies in Europe. This development adds further context to Lilium’s struggles. Despite its innovative technology and initial market presence, Lilium’s recent and repeated financial difficulties have significantly weakened its competitive position. The company’s operational standstill puts it at a considerable disadvantage compared to competitors that are continuing to advance their development, testing, and certification programs.
5. Financial Health and Recent Events:
5.1. Lilium’s Financial Trajectory Before the Crisis:
Like many companies in the advanced air mobility sector, Lilium operated in a pre-revenue state, with substantial financial outlays directed towards the extensive research and development required to bring its innovative aircraft to fruition. Over the decade leading up to its February 2025 bankruptcy, Lilium had successfully attracted significant investment, totaling approximately €1.5 billion. A research report by Longspur Research in February 2024 indicated that Lilium anticipated a cost outflow of around €300 million, with this figure expected to increase as the company approached its targeted commercial launch in 2026. This pattern of high development costs and the absence of revenue made Lilium particularly susceptible to any disruptions in its funding pipeline.
5.2. The Onset of Financial Distress and Insolvency (October – December 2024):
Lilium’s financial stability began to unravel in October 2024 when the Budget Committee of the German parliament did not approve a crucial loan guarantee of €100 million. This loan guarantee was a prerequisite for a larger round of private investment that Lilium had conditionally secured. Without this government support, the private funding did not materialize, leaving Lilium with a critical funding gap. Consequently, the company’s principal German subsidiaries applied for self-administration proceedings with the competent court in Germany. Self-administration is a form of insolvency proceeding in Germany aimed at preserving and continuing the business under the supervision of a court-appointed custodian, while the company’s management retains control. Following the initial insolvency filing, Lilium’s board approved the commencement of an open M&A process, mandating KPMG to seek potential investors or buyers for the company’s assets. Adding to the financial woes, Nasdaq notified Lilium N.V. that its securities would be delisted and suspended from trading, effective November 6, 2024, due to the insolvency filings of its primary German subsidiaries.
5.3. The Brief Respite and Ultimate Collapse (December 2024 – February 2025):
In a development that offered a temporary glimmer of hope, Lilium announced on December 24, 2024, that it had achieved a breakthrough in its investor search, signing an asset purchase agreement with Mobile Uplift Corporation GmbH (MUC), a consortium of experienced investors from Europe and North America. MUC intended to acquire the operating assets of Lilium’s German subsidiaries, with plans to invest over €200 million into the insolvent company to restart operations and continue the development of the Lilium Jet. Key investors in the MUC consortium reportedly included Slovak entrepreneur Marian Boček, co-founder of battery manufacturer InoBat. However, this anticipated investment ultimately failed to materialize. For reasons not explicitly detailed in the provided snippets, the funds pledged by the investors were not provided. This failure led to Lilium Aerospace, as the company was renamed, filing for insolvency for the second time on February 21, 2025, and announcing that it would shut down its business operations. Sources within the company also confirmed that employees had gone without pay for several weeks, further illustrating the severity of the financial crisis.
5.4. Current Precarious State and Uncertain Future:
As of February 2025, Lilium Aerospace indicated that while discussions about alternative solutions were ongoing, the chance for restructuring at that time was highly unlikely, and therefore, operations would cease. This marks a significant setback for the company, which had once been considered a frontrunner in the eVTOL sector. The failure of the €200 million rescue deal has cast serious doubt over the commercial viability of Lilium’s electric aviation ambitions. The situation is further compounded by the fact that another European eVTOL pioneer, Volocopter, also joined Lilium in bankruptcy proceedings in March 2025, suggesting broader challenges within the European eVTOL landscape. The outlook for Lilium remains highly uncertain, with any potential path forward likely requiring a significant and currently unforeseen shift in its financial circumstances.
6. Regulatory Considerations:
6.1. Navigating the Complex Global eVTOL Regulatory Landscape:
The regulatory landscape for electric vertical take-off and landing (eVTOL) aircraft is still in its nascent stages and is evolving across different regions. In the United States, the Federal Aviation Administration (FAA) is in the process of adapting regulations to accommodate the unique characteristics of eVTOL technology and operations. Similarly, the European Union Aviation Safety Agency (EASA) is developing regulatory frameworks to govern the use of eVTOLs within Europe. For eVTOL aircraft to be deployed commercially at scale, three core aviation regulatory approvals are generally required: type certification (approval of the aircraft design), production certification (approval of the manufacturing process), and operational authorities (approval for commercial flight operations). However, the establishment of a unified global regulatory framework faces several challenges, including inconsistencies in regulations between different countries and even within regions, as well as the absence of universal standards for aspects like charging infrastructure. Furthermore, the roles of local authorities and urban planners in regulating eVTOL operations are still being defined in many parts of the world. This complex and evolving regulatory environment presents a significant hurdle for all companies in the eVTOL industry, including Lilium.
6.2. Implications for Lilium’s Path to Commercialization:
The evolving regulatory landscape has significant implications for Lilium’s plans to commercialize its Lilium Jet. The company had previously aimed for its first customer deliveries to begin in 2026. Achieving this ambitious timeline would have required Lilium to successfully navigate the complex certification processes of relevant aviation authorities, likely including both EASA in Europe and potentially the FAA for operations in other regions like the United States. Obtaining type certification for the Lilium Jet, with its unique ducted fan technology, could present specific regulatory challenges, as it deviates from more conventional aircraft designs. The process of gaining production certification and the necessary operational approvals would also require substantial resources and adherence to stringent safety standards. Given Lilium’s current financial and operational paralysis, the prospect of successfully navigating these regulatory hurdles to achieve commercial certification in the near future appears exceedingly challenging. Financial stability is often a prerequisite for undertaking the lengthy and expensive certification process, and Lilium’s repeated insolvency filings indicate a severe lack of such stability.
7. Investment Risk Assessment:
7.1. Overwhelming Financial Instability and Insolvency:
The most significant risk associated with investing in Lilium at this time is the company’s profound financial instability, evidenced by its repeated filings for insolvency. The recent failure of the anticipated investment from Mobile Uplift Corporation further underscores the severity of Lilium’s financial distress. The company has suspended its business operations, indicating a complete cessation of its primary activities. Moreover, Lilium’s delisting from the Nasdaq stock exchange severely limits the liquidity of its shares and diminishes investor confidence. Investing in a company undergoing multiple insolvency proceedings and having halted operations carries an exceptionally high probability of complete loss of investment. In such situations, the claims of creditors typically take precedence over those of equity holders, meaning that shareholders are often left with little to no return.
7.2. Intense Competition and Uncertain Market Adoption:
The eVTOL market is characterized by intense competition, with numerous well-funded companies pursuing various technological approaches and targeting different market segments. Furthermore, there is still uncertainty surrounding the widespread public acceptance and commercial viability of urban air mobility and regional air mobility solutions. Even if Lilium were to overcome its current financial difficulties, it would still face a significant challenge in competing effectively in this crowded and evolving market. Its specific focus on regional air mobility, while potentially offering advantages, also means it is targeting a segment where the demand and infrastructure requirements are still being established.
7.3. Significant Technological and Operational Risks:
Developing and certifying a novel aircraft like the Lilium Jet involves substantial technological and operational risks. The company could encounter further technical setbacks during the testing and certification process, leading to costly delays and potentially requiring significant redesigns. The unique ducted fan technology, while innovative, may also present unforeseen engineering and operational challenges. Safety is paramount in the aviation industry, and any incidents or concerns regarding the safety of the Lilium Jet could severely impact its development and public acceptance. The path from prototype to mass production and reliable commercial operation is fraught with complexities and potential pitfalls.
7.4. The Uncertain and Evolving Regulatory Landscape:
The regulatory framework for eVTOL aircraft is still under development globally, and this uncertainty poses a risk to companies like Lilium. Changes in regulations or unexpected delays in the certification process could significantly impact Lilium’s planned timelines and potentially necessitate costly modifications to its aircraft or operational procedures. The lack of harmonized global standards could also create challenges for international operations and market expansion.
8. Potential Opportunities and Upsides (Extremely Speculative and Low Probability):
8.1. A Highly Unlikely Turnaround Scenario:
While the current situation appears dire, there remains a remote possibility of a significant, unforeseen influx of capital that could rescue Lilium from its insolvency and allow it to resume operations and development. This would likely require a major new investor or a consortium willing to take on the substantial risks associated with the company. However, given the repeated failures to secure funding and the current cessation of operations, the probability of such a dramatic turnaround is exceptionally low. Relying on such a speculative event is not a prudent basis for investment.
8.2. Potential Acquisition of Assets at a Deep Discount:
Another possibility, albeit one that is unlikely to yield significant returns for current equity holders, is that another company in the aerospace or automotive sector might be interested in acquiring Lilium’s remaining assets, including its intellectual property and technology, at a significantly reduced price due to its current financial distress. Lilium’s initiation of an M&A process suggests that the company is open to such a scenario. However, in insolvency proceedings, creditors typically have priority over equity holders in the distribution of any proceeds from asset sales. Therefore, any return to current shareholders in the event of an acquisition is likely to be minimal, if it occurs at all.
8.3. Long-Term, Highly Speculative Bet on the eVTOL Vision:
In the extremely long term, if the eVTOL market were to mature into a massive and successful industry, and if a completely restructured Lilium (or a successor entity utilizing its technology) were to emerge and capture a substantial market share, then theoretically, an investment made now, at a very low price, could potentially yield significant returns. However, this scenario is fraught with uncertainty and depends on numerous factors, including the successful restructuring of Lilium, overcoming its technological and financial hurdles, and the overall growth and acceptance of the eVTOL market. This represents an exceptionally high-risk, low-probability bet that is unsuitable for most investors.
9. Conclusion and Investment Recommendation:
In conclusion, the analysis of Lilium reveals a company facing severe financial distress, evidenced by multiple insolvency filings and the cessation of its business operations. While the company possesses innovative technology and operates in a market with significant long-term potential, the immediate and overwhelming challenges related to its financial instability make any investment at this time exceptionally risky. The intense competition within the eVTOL market and the uncertainties surrounding the regulatory landscape further compound these risks. The recent failure of a seemingly promising rescue deal underscores the precariousness of Lilium’s situation.
Investment Recommendation: Based on the comprehensive analysis of the available information, it is strongly recommended that most investors should not invest in Lilium at this time. The extreme financial risks, the company’s operational standstill, and the uncertain path forward make this an exceptionally speculative and potentially value-destroying investment. Only highly sophisticated investors with a very high risk tolerance, a deep understanding of distressed investing, and the capacity to lose their entire investment might consider a very small, speculative position. However, even for such investors, extensive due diligence beyond the scope of this report is absolutely essential.