Lilium - 100 million euro guarantee from the state?

Planned guarantee for Lilium: prestige project with question marks. It remains unclear whether competitors such as Volocopter will receive similar support and what role Lilium Schweiz GmbH in Lucerne will play.

Munich, September 2024 - According to media reports(1,2), Bavaria and the federal government are planning to support the air cab manufacturer Lilium with a guarantee of 50 million euros each. This guarantee is intended to secure a loan from the state-owned Kreditanstalt für Wiederaufbau (KfW) in order to further advance the development of the flying cab.

Bavaria or Switzerland?

It is to be hoped that, in addition to Lilium GmbH in Bavaria, politicians are also keeping an eye on Lilium Schweiz GmbH (CHE-220.716.338), which is based in Lucerne. While the purpose of the company in Germany is focused on the research, development, construction and sale of manned aircraft as well as related services and marketing, the purpose of the Swiss subsidiary includes a remarkable addition: it can also acquire, sell or grant patents, licenses and other intellectual property rights. From the founders' point of view, this structure is certainly a common and strategically clever way of protecting valuable intellectual property rights and using them flexibly. From the perspective of the German taxpayer, however, the legitimate question arises as to where the company's actual assets are located and whether public funds actually benefit the location that is to be promoted. It becomes even more exciting when you take a closer look at the address of Lilium Schweiz GmbH: Hertensteinstrasse 2, c/o ECOVIS ws&p ag, Lucerne branch, CH-6004 Lucerne.

Flagship project for Bavaria - what about the competitors?

The Lilium Jet is considered an important project for Bavarian politics, as the company's headquarters will not be relocated to Gauting near Munich until spring 2024 according to the commercial register. The state guarantee is intended to prevent production from moving abroad, especially as Lilium is also negotiating possible support with the French government. However, this aid would be tied to investments of up to 400 million euros for the development of production capacities in France. At the same time, the question arises as to whether competitors such as Volocopter would receive similar guarantees of the same amount or whether it would not make more sense to channel fresh venture capital into the companies.

Targeted investment

Political guarantees and investments in the start-up scene are generally very welcome, as they promote innovation and advance new technologies. However, it is crucial for the domestic location that these funds are used productively and in a targeted manner in order to create long-term jobs and secure value creation in the region. This is the only way to ensure that government support not only offers short-term relief, but also provides sustainable economic impetus that strengthens the location in the long term and keeps it competitive in the global marketplace.