German government denies state aid to struggling air taxi startup Lilium

Struggling electric air taxi company Lilium will not receive German state aid in its bid to avoid insolvency. Lawmakers rejected the Bavarian startup’s application for federal guarantees for a loan of 50 million euros, according to media reports.

Bavaria’s state premier Markus Söder said the decision was a “bitter setback for Germany as a centre of technology”. The southern German state had already agreed to provide guarantees for the same volume of loans, but only on the condition that it was matched by the federal government.

Lilium has previously hinted at a sale to foreign investors or relocation abroad due to the lack of support from the German government. The technology promoted by the company remains controversial: A recent report found that air taxis and other electric vertical take-off and landing vehicles are not useful mass transport technologies for the energy transition, with the authors concluding that they raise costs, hardly affect travel times, and cause more emissions than electric cars.

Lilium needs the money for the development and certification of a seven-seater electric aeroplane and spent 200 million euros in the first half of 2024, according to media reports. Lilium has previously voiced its difficulties in securing state loan guarantees, after first applying to the Bavarian government in 2023, reports revolution. The firm announced it was in “advanced talks” with the French government on loans and subsidies totalling up to 400 million euros.

Social Democrat chancellor Olaf Scholz, as well as transport minister Volker Wissing and finance minister Christian Lindner, both members of the pro-business Free Democrats (FDP), were in favour of granting the guarantees to Lilium “to the very end”, even though several FDP MPs also opposed them, according to a Spiegel report. The main opposition against the loans came from the Greens, sources told ntv.