No state aid for e-jet manufacturer Lilium

The electric aircraft pioneer Lilium is not to receive any government support. A loan guarantee of 50 million euros from the federal government failed due to the resistance of the Greens in the traffic light coalition. This also nullifies a support promise from Bavaria. What consequences this will have for the Munich-based company with 1,100 employees and for the high-tech location is completely open. Lilium initially did not comment. 

SPD budget expert Dennis Rohde said, "Germany cannot afford to let future industrial jobs disappear. That’s why we as the SPD would have liked to support this climate-neutral future technology with government aid. Unfortunately, there was no majority for this economic policy conviction in the current coalition.”

The start-up company has developed a fully electric, vertically starting and landing air taxi. The manned maiden flight is scheduled for early 2025, and the first machines are to be delivered to customers in 2026. But first, it costs a lot of money: almost 200 million euros were spent in the first half of 2024 alone. Customers and investors have already invested 1.5 billion euros in the company, which is listed on the US stock exchange Nasdaq. 

Söder attacks the Greens and the billion-euro aid for shipyards

The Bavarian cabinet wants to grant a credit guarantee of 50 million euros if the federal government participates in the same way.

"We would have made our contribution," said Prime Minister Markus Söder (CSU).

The Greens refused support for Lilium, even though it had been discussed differently with the Federal Chancellery.

"Old industry in the north, such as shipyards, is supported by the federal government with billions, but for future investments in the south there is not a cent. This is a stark misjudgment and further severe disadvantage for Bavaria," criticized Söder.

Four weeks ago, the federal government and the state of Lower Saxony supported the troubled cruise shipyard Meyer with guarantees of two billion euros and the purchase of company shares for 400 million euros.

Mutual Blame

Green Party members of the Bundestag did not comment openly. Sources within their faction only said:

“Due to many internal and external expert assessments and a difficult budget situation, we have doubts that the federal government should take the risk here. Mr. Söder is welcome to take more risks with Bavarian money, he always boasts about how much of it he has.”

The deputy Green Party leader in the Bavarian state parliament, Claudia Köhler, said: “In times of tight budgets, the colleagues did not want to approve a high-risk investment for a luxury product. I find that responsible.”

The FDP representative on the Budget Committee, Aschaffenburg member of parliament Karsten Klein, said the FDP faction saw more chances for federal assistance.

“The failure is not a good signal for the company, the jobs, and the high-tech location Bavaria.” At the same time, he criticized the Bavarian state government: It must “finally implement instruments that make it easier for start-ups in Bavaria and, above all, provide more planning security.”

The Bavarian DGB leader Bernhard Stiedl criticized:

“If the traffic light government is serious about Germany as a technology location, it must take responsibility instead of recklessly putting future-proof jobs at risk.” The fact that the federal government is “refusing its support after it has already promised it is a disastrous signal.” 

Offer from France?

Lilium employs around 500 aerospace engineers and has already secured customers for its electric air taxis with over 700 firm and pre-orders in the USA, Great Britain, France, Saudi Arabia, and many other countries. A company spokesperson said:

“France has promised us substantial support if we open a second site in southwest France.” 

However, according to Lilium CEO Klaus Roewe, the investors also demand that the German start-up be given initial aid, similar to what other countries do for their electric aviation pioneers:

“The initial investments are simply too high to be handled purely privately.”

Worldwide, not a single aircraft program has succeeded without state support, wrote the former Airbus manager Roewe.