Lilium, once a prominent player in the electric aircraft industry that raised over $1 billion before going public, has ceased operations and laid off approximately 1,000 employees after failing to secure financing or exit insolvency.
Potential Restructuring Lifeline
In a turn of events, Lilium announced on December 24 that a consortium of investors had agreed to acquire two of its subsidiaries, potentially allowing the company to restructure and emerge from insolvency.
The German publication Gründerszene first reported the layoffs, and co-founder Patrick Nathen confirmed on LinkedIn that the 10-year-old company had stopped operating.
“After 10 years and 10 months, it is a sad fact that Lilium has ceased operations. The company that Daniel, Sebastian, Matthias, and I founded can no longer pursue our shared belief in more environmentally friendly aviation. This is heartbreaking, and the timing feels painfully ironic,” Nathen wrote.
The layoffs affect the majority of Lilium’s workforce, following an earlier round of 200 job cuts reported in a regulatory filing on December 16.
A Lilium spokesperson, responding to inquiries, declined to provide further details, stating, “The company will communicate once we can say something.”
Lilium’s Struggles and Setbacks
Lilium had been developing vertical take-off and landing (VTOL) electric aircraft capable of speeds up to 100 km/h, attracting investors such as Tencent and securing customer commitments, including an order for 100 electric jets from Saudi Arabia. In 2021, the company went public on the Nasdaq through a reverse merger with SPAC Qell.
Despite progress, including powering up its first full-scale prototype, Lilium was still years away from delivering its product. The company’s financial challenges came to a head in October when it filed for insolvency—Germany’s equivalent of bankruptcy—after failing to secure emergency funding from the German government. Under insolvency, control of its subsidiaries, including Lilium eAircraft, was transferred to administrators, with KPMG overseeing the sale process.
Lilium’s potential restructuring offers a glimmer of hope for the company and its vision of sustainable aviation, but its future remains uncertain as it navigates the aftermath of these challenges.
