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Fighting for eVTOL funding

By Treena Hein

Published on: June 13, 2024
Estimated reading time 10 minutes, 19 seconds.

We take a look at Volocopter and Lilium’s efforts to secure financing in Germany and beyond.

Recent news of eVTOL partnerships in the United Arab Emirates (UAE) and its laser focus on providing financial aid has demonstrated its support of advanced air mobility (AAM). The U.S. has also provided support for its young eVTOL firms through the U.S. Air Force AFWERX Agility Prime program, among other initiatives. And similarly, China has provided help to companies like EHang, as have other countries’ governments — from the U.K. to Brazil.

Meanwhile, the two eVTOL developers in Germany, Volocopter and Lilium, have had some issues getting their government to back them. 

Sergio Cecutta of SMG Consulting points out that although some European countries have supported their eVTOL industry mainly through technology grants, “they pale in comparison” with the support enjoyed in the U.S. via the U.S. Department of Defence. Various state governments have also provided incentives for production facilities.

“It’s a handicap for an eVTOL company not to have government support,” he said. “In general, we think that a lack of government support for its domestic AAM industry is a downside, especially in a worldwide market where U.S. and Chinese OEMs are getting this kind of support.”

Looking at Volocopter, earlier this spring, CEO Dirk Hoke announced that his firm may need to look at insolvency options, after the company failed to secure loans from two German state governments, as well as the federal government.

Hoke said at the time that “Volocopter has been transparent that the fundraising market has been difficult in the past few years … In general, Germany has very limited mechanisms to support startups in the late stages of financing.”

He also noted that these mechanisms are largely missing across Europe, and he called for new initiatives to help shape and support local technologies in the international arena.

After Volocopter’s first failed attempt to secure a €100-million (US$107-million) loan that would be split equally between the company’s home state of Baden-Württemberg and the federal government, the eVTOL startup had applied for a convertible €100-million (US$107-million) loan from the feds and the state of Bavaria.

From its early days, Volocopter has also faced ongoing legal disputes with its Seedmatch investors. As well, the company’s leaders had decided in November 2021 to back out of its planned merger with a special purpose acquisition company (SPAC), a financing option that some other eVTOL firms have chosen — which may or may not have been a good move in retrospect.

However, Hoke has said that Volocopter is engaging in “good discussions with existing and new investors for alternative means of financing” in Europe and beyond. Its existing investors include Saudi Arabian organization Neom, Chinese car manufacturer Geely, South Korean investor WP Investment, Italy-based Atlantia SpA, and Tokyo Century.

Volocopter’s 2X demonstrator flying at the Pontoise-Cormeille UAM testbed. The company said it intends to fly its VoloCity eVTOL aircraft in Paris this summer. Volocopter Photo

New funding

On June 5, Hoke was pleased to announce financing success. Volocopter’s last push to market will be funded by several existing shareholders, which can’t yet be named, the company said.

A Volocopter spokesperson said that as a private company, “we are not able to disclose any detail until the end of the round, which could be Q4 of this year,” but added that “this funding will see us through to EASA type certification and beyond.”

In terms of future financing that may be needed, the spokesperson said all options will stay open. “SPAC and IPO are a few of these mechanisms to go public, but we will choose the option that suits our business and corporate strategy when the market is right.”

Volocopter is still “determined to achieve our development milestones toward type certification,” the spokesperson said, “and to fly in Paris in the summer when all eyes are on the city.”


Germany-based Lilium is also seeking funds to continue toward type certification and is currently in talks with the governments of nearby countries. Entry into service of the Lilium Jet is planned for 2026. Lilium said it has an order pipeline of over 780 aircraft, including binding orders and agreements from operators in the U.S., South America, Europe, Asia, and the Middle East.

Specifically, while Lilium waits for the due diligence of government development bank KfW to determine whether financing will be forthcoming from the governments of Germany and Bavaria, the company announced in May that it’s in discussions with the French government to explore high-volume production facilities there. Lilium said it is currently working with multiple French Tier 1 suppliers, including Saint-Gobain, Michelin, Expliseat, and Ratier-Figeac.

“We are confident that the due diligence procedure in Germany will be done fairly quickly, allowing the governments to act in the second half of the year,” said Lilium spokesperson Rainer Ohler. “The process in France is also ongoing. We are also confident that results will become visible fairly quickly.”

Cecutta noted that similarly to Airbus, which he describes as a “European champion” that transcends the definition of a company based in a specific country, “we should think about AAM companies in Europe as European, and thus they should be free to look for support from European countries other than the one they were started in.”

Germany-based Lilium is seeking funds to continue toward type certification of its Lilium Jet eVTOL aircraft and is currently in talks with the governments of nearby countries. Lilium Image

U.S.-Europe comparisons

As to why government financing in Europe appears to take much longer than in the U.S., Ohler points to complex European financing regulations.

“The established schemes were all not appropriate for deep tech/startup/pre-revenue companies,” he explained. “France has, in the meantime, established broader schemes as it strongly tries to implement re-industrialization measures. Germany acts in these circumstances in a concerted effort between the federal and the state level, which adds complexity but also impact — realities we have to live with and can live with.”   

In anyone’s assessment of the situation, Ohler puts forth three other points to consider. First, he noted that “historically, there is not a single successful aircraft program in the world that came to fruition without government support.” 

Secondly, he noted that eVTOL firms in the U.S. have received government support “on a level that will most likely never be achieved by Lilium. In China, government support is even stronger. However, the envisaged support by Germany and France would strongly help to create a better level playing field.”

Lastly, Ohler noted that financial markets see government support as an indicator of trust and confidence, a sign of societal and industrial relevance of a project that supports their own engagement.

On this note, with regard to Lilium and other eVTOL firms, he pointed out that “we represent a strong contribution to the decarbonization of aviation — something that is very much in the interest of our societies and governments.” 

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