Lilium’s New Course: On Verge Of Going Public, It’s Working On A Bigger Air Taxi. Can It Deliver?

^The German electric air taxi developer Lilium, after a disappointing fundraising haul last year, is poised to go public through a reverse merger with a special purpose acquisition company, industry sources tell Forbes. And there’s another surprise that the startup, which private-equity investors have valued at $1 billion, could unveil details of along with an infusion of SPAC cash that a source says could be in a range of $700 million to $800 million: It’s quietly been developing a much larger, seven-seat version of its boundary-pushing aircraft.

Lilium representatives confirmed to Forbes that it’s been working on a bigger variant of the five-seat prototype that’s been the public face of the company since 2019, but they wouldn’t go into details on its size (or discuss fundraising), saying only that the aircraft will have “market-leading capacity.” Lilium aims to begin flight testing of the new aircraft in 2022 and to win safety certification by the end of 2023 – an extremely short time for any airplane, let alone for an electrical vertical takeoff and landing aircraft, none of which have yet to pass through the regulatory gantlet.

It’s another bold claim, but that’s Lilium. Competitors, as well as some ex-employees, say its brilliant, domineering CEO and cofounder, Daniel Wiegand, is making promises as to the performance of his air taxi and when it will come to market that he can’t deliver on, and some are concerned that failure could cast doubt on all the companies attempting to develop electric aircraft capable of hopping from rooftop to rooftop and freeing urban commuters from snarled traffic.

Three former Lilium employees, who spoke to Forbes on the condition of anonymity due to confidentiality agreements, said that they and a number of their colleagues left over the past year out of frustration over the management of the company by Wiegand, who they say is overcontrolling and has held to an unrealistic timeline in the face of development delays, pushback from his engineers and a planning process that was throwing up red flags.

“If you’re trying to attract investors, you have to have an ambitious vision, but at which point are you misleading investors with big numbers?” says a former engineer. “I’m not saying Lilium is guilty of investor fraud, but at some point, I just couldn’t live with that part anymore.”

Alexander Asseily, an early investor in Lilium who joined the executive team as chief strategy officer, told Forbes the startup was confident in the schedule and in the soundness of the development processes it has established following the addition of experienced aerospace executives from the likes of Airbus and Rolls-Royce. While slippages are possible, he says, “what matters is we have a serious, mature team, certainly the largest team in the EVTOL space, working with standard programmatic discipline.”

Frank Thelen, a board member from investor Freigeist Capital, wrote by email: “The company operates a transparent aerospace program with regular board reporting and we have full confidence in their timelines.”

In 2019, Lilium unveiled a prototype for a five-seat, battery-powered aircraft that takes off vertically like a helicopter and that it said would be able to transition to flying on wing like an airplane for 300 kilometers (186 miles), roughly the distance from New York to Boston, at a speed of 300 kilometers per hour (186 mph) – farther and faster than most other electric air taxi startups are aiming. Lilium’s primary target is longer-range intercity and regional transportation rather than the cross-town hops some competitors are focusing on.

Those big claims have helped Wiegand, 35, raise $390 million in venture capital from the likes of China’s Tencent, Skype co-founder Niklas Zennstrom’s fund Atomico and Tesla backer Baillie Gifford, making Lilium the second best-funded startup in the space after California-based Joby Aviation, which has raked in $820 million and is reportedly also exploring going public through a reverse merger with a SPAC that could value it at $5 billion.

But two former Lilium employees told Forbes that development of the five-seater prototype was dogged by problems and that the flight test campaign made minimal progress before it was incinerated in a battery fire in February 2020. (A second version was almost complete at the time but has yet to fly.) Outsiders have raised questions over whether Lilium’s power-hungry design can come even close to the performance claims the company has made, with critical analyses published last year by the German aerospace publication Aerokurier and the magazine Der Spiegel.

With 36 small, ducted fans arrayed along its four wings, the five-seater requires a whopping 1.2 megawatts of power to lift off, ex-employees told Forbes, almost as much electricity as courses through a giant Boeing 787.

Now, Asseily tells Forbes that the five-seat design that Lilium has been promoting for the past two years was only a testbed and that the company had already determined before it was unveiled that it wasn’t going to meet the performance goals the company touted along with it. “We were never going to ship it, we were never going to certify it,” he says.

Lilium is now targeting “250 km-plus” range, or 155 miles, with the larger aircraft – not including the safety reserves that regulators will require. That could rule out some of the city pairs that Lilium has previously discussed, such as London to Paris, Zurich to Munich, or in the case of the network it’s planning to build in Florida, Orlando to Miami.

All four ex-Lilium employees Forbes spoke with said they believe Lilium’s design can be made to work – eventually, in some form – but three of them and industry observers say it would be exceedingly difficult for the startup to win safety certification for an aircraft by the end of 2023. Previously the company had publicly said it was aiming for 2025.

That Lilium has switched paths to a larger aircraft makes it even more challenging. Lilium secretly launched development of it right around the time flight testing began of the five-seater in May 2019, Asseily says.

Two former Lilium employee said the design, for the most part, is a blown up version of the five-seater that would have a maximum take-off weight of 3,175 kilograms (7,000 pounds), 2.4 times that of the five-seater’s 1,300 kg (2,866 pounds). The higher weight is the maximum under new regulations the European Union Aviation Safety Agency released in 2019 to govern the burgeoning development of vertical takeoff and landing passenger aircraft that allowed them to have a larger maximum takeoff weight than previous rules.  

A source shared with Forbes a section of what he says is the business plan that Lilium circulated to potential SPAC investors that appears to show the aircraft will be a seven-seater; it says the company will launch production in 2023 with 25 of the aircraft, followed by 250 in 2024 and 400 in 2025, before rolling out a 16-seater in 2027 and a 50-seat aircraft in 2030.

Asseily said Lilium wouldn’t discuss its product roadmap.

To make the timeline work the company will be relying on the soundness of its modeling and ground testing of components.

While three of the former employees say engineers were happy with the results of the flight tests of the five-seater prototype, the campaign didn’t get far. Prone to malfunctions, the aircraft only completed roughly 20 unmanned flights, two said, none of which lasted for more than a few minutes, before it was incinerated (an internal investigation concluded the fire was likely caused by a bent pin in a battery connector that caused a short, two of the former employees say – to save weight, connectors weren’t fully covered). And they say the prototype never pulled off a crucial maneuver: transitioning from vertical mode to wing-borne forward flight, which requires the aircraft to gather speed and rotate the four flaps bearing its 36 fans, which point straight down at launch, 90 degrees so that the fans are pointing backward.

Meanwhile, Joby has completed hundreds of test flights of its five-seat tiltrotor, while Volocopter, Wisk and EHang all say they’ve topped 1,000 test flights of their two-seat designs.

“If you haven’t flown an aircraft for a year, and you still haven’t proven transition from vertical to forward flight and you still haven’t flown for more than a few minutes at a time, it’s incredibly bullish to say you’re going to get there in 2023,” says a former employee. “It’s impossible.”

The company hopes to get the second five-seater prototype in the air this spring.

Another area where Lilium trails competitors is in patents for electric air taxi technology: It has four, placing it last among the top 20 patent holders, according to a report by Lufthansa Technik.

^Wiegand was obsessed with flight from an early age — he’s said that he cried when he was 7 or 8 while watching sea birds fly: “I was seriously unhappy that I was born as a human and not as a bird.” He went on to study aerospace engineering at the Technical University of Munich, where he founded Lilium in 2015 with three classmates. Few of their early hires had any aerospace industry experience either. An ex-employee says that showed in the early years in an inability to write detailed enough design specifications for the aircraft they were trying to build – they flew a prototype for a two-seater before moving up to the five-seat design — and haphazard garage-style working processes.

They struggled with weight as they built out components of the five-seat prototype. “You don’t account for all the screws you need … or you need more carbon fiber than in your original CAD model,” the former employee says. “The grams, they just add up and up.”

A misunderstanding led to the wingspan of the main wings for the five-seat prototype stretching roughly a meter (3 feet) longer than planned, and one wing weighed about 5 kg (11 pounds) more than the other, two ex-employees say. They added weights to the lighter wing and proceeded with them anyway because they had fallen far behind schedule, having told investors first flight would be by end of 2017. It ended up taking place in May 2019. Lilium told Forbes the wingspan came in under 11 meters as designed.

For months at the company’s weekly “all-wings” meetings, management repeatedly said that first flight would be in two weeks, which became a running joke among workers.

The unrealistic assertions were at the insistence of Wiegand, the ex-employees say, who, in the manner of many startup founders, they describe as unyieldingly optimistic and deeply involved in every aspect of the aircraft’s design.

With a keen memory for physics formulas, Wiegand would overwhelm his engineers with rapid-fire calculations on his iPhone calculator to sketch out design specifications that they say others might take hours or days to arrive at.

Ex-employees say Wiegand could be argued with, but it required careful preparation and backing data, and he would regularly keep them in long, exhausting meetings, poring over issues at a granular level before yielding or making a decision. He would bore into weaknesses in an employee’s presentation or concept, they say, dismantling it in a calm, methodical fashion.

“You’d just come out thirsty and needing to pee and you’re just completely devastated,” said one engineer. It was a working style that delayed decision making, the ex-employees say, and as the company grew from around 30 employees in 2017 to over 500, it became harder to get time with Wiegand. Two of the former workers say that as the company got larger, Wiegand became more prescriptive as a way to maintain control. “If he tells you what to do, he knows what you’re doing, I think that’s the way he was thinking,” says one.

Design specs would sometimes be changed and not all engineers involved might be informed, leading to weeks of wasted work, while engineers walking into meetings with suppliers sometimes found that the suppliers had been given different parameters, they say.

Airbus veteran Yves Yemsi, who joined the company as chief program officer in 2019, brought in a team of project managers and attempted to implement more rigorous work and planning processes, but three of the ex-employees say Wiegand resisted the conclusions.

Yemsi’s projections showed that shooting for certification in 2023 would be extremely difficult, an ex-employee says. Wiegand convened meetings to try to find ways to advance the schedule. “There would be long meetings with lots of people involved to work out how we can resolve it and it would end it in frustration,” according to the ex-employee.

Asseily says Wiegand’s obsession for detail is a healthy trait of successful tech founders, and says he has pulled back to a certain extent, yielding the title of chief technology officer and chief engineer to aerospace veterans over the past couple of years. “I’m not going to pretend as a first-time CEO that he doesn’t have room to grow,” Asseily says. “But I think he’s shown incredible maturity and he’s attracted phenomenal people around him.”

Wiegand may genuinely think certification in 2023 is achievable, former employees say — and publicly aiming for that date would put Lilium to the front of the pack of air taxi hopefuls, and perhaps to the front of consideration of SPACs sniffing around the industry who would prefer a quick entry to market. Joby is the only other contender that’s currently publicly targeting certification in 2023.

Lilium, which is planning to operate its own air taxi network, will need hundreds of millions more dollars to develop its aircraft and build up the manufacturing muscle to produce hundreds of aircraft a year as well as the vertiport network it’s envisioning in Florida and Germany. The opportunity to get that money through a SPAC comes after it failed to raise as much money as it hoped last year.

Lilium reaped $275 million but was aiming for $450 million, an ex-employee said, confirming reporting by TechCrunch on the funding goal, and it only brought in one new investor. “They were pissed, there was a lot of finger pointing,” the ex-employee says of Wiegand and other executives. Lilium told Forbes it was pleased with the results.

^One of the largest sticking points to Lilium’s timeline may be procuring batteries that could make the ambitious design work. It’s a hurdle for all the aspiring air taxi makers: With the best batteries on the market today packing 14 times less usable energy by weight than jet fuel, there are doubts whether any of the startups will be able to field aircraft in the near term with enough range and carrying capacity to make business sense.

At Forbes’ request, battery researchers at Carnegie Mellon University used design specifications that the company has shared publicly, as well as details provided by ex-Lilium employees, to estimate how large and powerful a battery pack Lilium would require.

Venkat Viswanathan, an associate professor of engineering at Carnegie Mellon, and his graduate student Shashank Sripad, made several charitable assumptions. They modeled a range requirement of 200 km (125 miles), lower than Lilium’s ambitious goal, allowing for a battery pack with lower total energy and weight. They also allowed for the battery pack weight to take up a fairly high share of the total takeoff weight, leaving just 35% of the weight budget for the aircraft’s other structures and systems. That fraction is typically 55% to 65% for certified conventional airplanes.

The math still was tough, thanks in large part to Lilium’s decision to use dozens of small, ducted fans for propulsion. The company says ducted fans will make its air taxis quieter and more efficient in forward flight than other concepts that employ open rotors. But in takeoff, those small fans will have to work much harder to generate lift.

The power needs of the abandoned five-seat design appear to be well beyond current and near-term battery technology, based on Viswanathan and Sripad’s calculations. Given that the aircraft draws 1.2 MW of electricity to get off the ground, even dropping the range goal to 200 km, the battery pack would need specific power (a measure of how much energy the battery can discharge at once) of 3.4 kilowatts per kilogram. It’s “practically impossible” to do that more than a handful of time with current battery cells before they’re fried, says Sripad.

The larger aircraft that Lilium is now working on will require even greater takeoff power: 3 MW, Viswanathan and Sripad estimate. With a maximum takeoff weight of 3,175 kg, Lilium actually gains a wider design envelope to work with, they say. However, the battery researchers estimate that even if Lilium didn’t add seats and kept it to a pilot and four passengers plus luggage, allowing more weight to be devoted to batteries, the required specific power for the battery pack would still be a shade over 2 kW/kg.

The highest specific power that battery manufacturers rate any current cells to provide is around 2 kW/kg, and that figure goes down once the cells are assembled into a pack, with insulation to prevent fires from spreading, wiring and cooling and control systems.

Lilium is working with partners on a custom battery cell that will meet its requirements that just involves “tweaking” a “known cell chemistry,” and is not banking on experimental next-generation batteries maturing quickly, Asseily says. The changes are minimal enough that its battery cells won’t require new manufacturing methods, allowing them to be produced on current standard scale production lines, in volume, on the timeline Lilium needs to launch mass production, he says.

That sounds like Lilium is working on an improved version of standard lithium ion cells, says Viswanathan, who’s worked with a number of eVTOL startups. It’s possible that approach could deliver a battery on Lilium’s timeline that meets its needs — if it holds cabin capacity to a pilot and three or four passengers, he says. “I would give them the benefit of doubt that maybe it’s possible,” he says.

In the long run, there are novel battery chemistries under development like lithium metal and silicon anodes that will undoubtedly meet Lilium’s requirements, Viswanathan says, but the near-term problem for all the electric air taxi hopefuls is that battery makers are putting the needs of electric car manufacturers first, since they’re producing large volumes of vehicles now. And because electric vehicle drivers don’t need to floor it for more than a few seconds at a time, they don’t need batteries that can deliver nearly as high specific power as electric air taxis require. Takeoff and landing, says Viswanathan, “It’s like being on Ludicrous Mode but not for 3 seconds, but for 60 to 90 seconds,” he says. “The battery, it’s singeing inside.”  

What electric cars primarily need is for batteries to pack more total energy for a given weight, known as specific energy, to increase range (something electric air taxis need too), so optimization for higher specific power will likely come later.

Joby Aviation is attempting to bring its tilt rotor air taxi to market with battery cells that are currently in mass production for use in electric vehicles – the company says it’s figured out how to build a battery pack with auto cells that has specific energy of 235 Wh/kg. That would be well above the best automotive battery packs, which are at 180 Wh/kg.

Viswanathan and Sripad estimate that a seven-seat version of Lilium’s 3,175 kg MTOW aircraft with 200 km of range would need a battery pack with specific energy of 165 Wh/kg – which is achievable now – but it would need specific power of 2.6 kW/kg at the pack level, well above what they expect prototype Li-on cells to be able to achieve.

Asseily said that Viswanathan and Sripad’s estimates were “a pretty good deduction,” but a “bit off.” He declined to discuss the battery specs in detail.

Viswanathan predicts that next-gen battery cells that have both enough specific power and specific energy to make higher-capacity versions of Lilium’s designs feasible will be commercially available by the second half of the decade, though he says it’s not out of the realm of possibility that a battery developer could have a small volume of prototype cells available at a high cost earlier.

^Batteries aren’t the only question mark for Lilium’s ambitious timeline. Among other potential issues with its boundary-pushing design, the flight controls could take time to perfect. The aircraft lacks conventional control surfaces like a tail, rudder and wing flaps; instead it’s designed to be steered by varying the thrust of its dozens of fans. (It’s unclear how many will be on the new aircraft, but it’s unlikely to be fewer than the 5-seater’s 36.)  

To coordinate their thrust, each of the electric motor and fan units will need reliable sensors to accurately measure pressure, temperature and other indicators. Each of the motors will induce vibrations in the wings, and their fans may not all spin with the same efficiencies as wear and tear set in. It will be complicated to write software to reliably control all that, says Ella Atkins, an aerospace engineering professor at the University of Michigan. While Atkins says she doesn’t see anything that’s “absolutely a showstopper” with the design, she thinks the many years it took to solve the deadly control problems of the first tiltrotor aircraft, the U.S. military’s V-22 Osprey, offers a sobering parallel for Lilium and other EVTOL developers.          

 “You need a lot of money and time to be successful in aerospace, and the truth is, this industry is trying to go too fast,” says Atkins.

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