Lilium CEO hits out at ‘misunderstandings’ over German state bank loans

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Klaus Roewe, CEO and executive director of German eVTOL developer Lilium, has responded to what he calls “misunderstandings” regarding the firm’s loan from German development bank KfW. 

In a statement published today on LinkedIn, Roewe (pictured below right) sought to clarify a number of points regarding Lilium’s €100m loan, alternative fundraising efforts and ensuring Germany has an electric aircraft programme. The loan, which has been the subject of industry discussion, including multiple articles from Revolution.Aero, was confirmed in June, subject to due diligence. 

Speaking at the time, Roewe told us he was “very encouraged” by the developments in respect of German state support for Lilium. In today’s statement, Roewe has reiterated the importance of state support for any new aircraft programme. 

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“Lilium is to receive a fixed-rate loan of €100m as a signal to our investors that Germany supports the entry into electric aviation. It’s not about saving a crisis-ridden company with grants. The loan is fully repayable, and the conditions are very advantageous for KfW, and thus for Germany,” says Roewe. 

Lilium has already been funded to the tune of $1.5bn from a series of investors predominantly in the US and China. Roewe says these investors would like to continue funding Lilium, but they also want a signal that investing in a German company is not a disadvantage. He makes the comparison to Joby Aviation, which has received more than $500m from the US state through various initiatives and contracts. 

“There has never been a successful aircraft program in the world that has not been supported by the state,” says Roewe. “The initial investments are simply too high to be handled purely by the private sector. See Airbus: Today an important employer and taxpayer.

“Our investors have some alternatives. The USA, China, Great Britain and France have long since significantly promoted Lilium’s competitors and continue to do so. If the funding situation in Germany deviates too much from this, Germany will not be competitive as an investment location. The competitor Joby alone has so far been supported by the USA with more than $600m.”

Lilium’s CEO also points out that the company has over 1,100 employees and contributes to around 2,000 jobs at its various suppliers. He also revealed the company pays €50m per year in taxes and social security contributions in Germany. Therefore, a guarantee of €50m from the federal government is what he calls a “very moderate investment”. Note, it is €50m because the State of Bavaria has issued a guarantee declaration for the KfW loan of the same amount to make up the €100m.

“Do we now want to let the electrification of aviation migrate abroad if the world’s best technology for this has been developed by German engineers?” Roewe concludes. “Shouldn’t pragmatism win over ideology here? Does Germany want to buy electric aircraft in the USA and China in the future, just as we did historically with passenger aircraft (Boeing, McDonnell Douglas, Lockheed), because we don’t have our own industry?”

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