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Lilium is seeking a combined $300 million in loan guarantees from German and French governments.
Lilium CEO Klaus Roewe expects $100 million in loan guarantees from the German and Bavarian governments, while talks with France toward a further $200 million are ongoing, raising the likelihood that the startup can finance its path to type certification and entry-into-service in 2026.
Despite its continued progress in developing the all-electric Lilium Jet, the Munich-based startup faces a narrow cash runway, with just $110 million in total liquidity as of the end of the first quarter (Q1), barely enough to keep it funded through midsummer. But having raised an additional $114 million earlier this month, mostly from existing shareholders, the company received a badly needed financial lifeline that should allow it to operate its first manned flight later this year.
Still, that will not be enough money to carry Lilium far into 2025, even considering its ability to access customer predelivery payments (PDP) following its first manned flight. As such, Lilium is seeking the loan guarantees from the German federal and Bavarian state governments, which have commissioned state development bank KfW to conduct due diligence on the startup–a process Roewe says should conclude “six to eight weeks” from now.
Roewe also says Lilium is in “advanced discussions” with the French government for its loan guarantees, with disbursements to be paid in tranches “over the next several years.”
The French subsidies would be used to fund construction of high-volume production facilities there, including a final assembly line, battery pack assembly line and maintenance facilities, Roewe explains, adding Lilium is discussing potential locations with French regional governments.
At the same time, Lilium continues to “engage in active dialogue with sovereign entities, strategic partners, prospective customers and stakeholders for further funding initiatives,” the company notes in a shareholder letter issued alongside its Q1 financial results.
“Given the visibility on potential government-backed capital sources, along with our recent capital raise, we believe we have a liquidity road map for our first piloted flight later this year,” Roewe told analysts on the startup’s latest earnings call.
Despite Lilium’s optimism about its latest fundraising progress, SMG Consulting analyst Sergio Cecutta cautions it still may not be enough to finance the complete path to entry-into-service (EIS).
Even with a total of $414 million—the recent $114 million capital raise and $300 million in expected German and French subsidies—as well as PDP, Cecutta estimates the company will still be short $150 million, assuming an estimated EIS in Q4 2026. A major caveat, however, is the timing of disbursement of government funds, which he notes could have a “major impact” on Lilium’s financial outlook.
At expected rates of cash burn, Cecutta predicts Lilium will run out of cash “one or two quarters” prior to EIS. Critically, he also notes his analysis does not take into account the cash needs for a production ramp-up, which he said “could make the situation a bit more complex.” He does note additional customer PDPs could mitigate those concerns.
The funding update comes as Lilium works through final assembly of its first Lilium Jet, MSN-1, while MSN-2 continues to progress with the fuselage, wings and canard now assembled.
Lilium’s adjusted cash spend in Q1 totaled roughly €95 million ($103 million), driven largely by prototype assembly and supplier expenses. The company estimates its spending in the first half of the year to total €185-195 million, with outflow in the second half to be “slightly higher.”
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