Air taxi firm Lilium says in funding talks, defends battery design

By Tim Hepher

PARIS (Reuters) - German air taxi developer Lilium said on Tuesday it was in "active and constructive" discussions for new funding as it ramps up battery-cell production.

In a shareholder letter, the company also defended battery technology which has come under scrutiny because of the extra power required compared to other eVTOL projects.

"...independent tests have shown that our cell technology is on track to deliver the energy, power and charging cycles we require," it said.

Lilium is competing in a crowded market for electric Vertical Take-Off and Landing (eVTOL) vehicles, hoping to replace road trips or short hops by aircraft or helicopters.

It plans a cruise speed of 250 km or 155 miles per hour and says its system of tilting electric turbofans embedded in the wings will be quieter than open rotors from rivals.

But the challenge of securing certification and funding innovations such as batteries weigh heavily on the new sector. Lilium shares have plunged some 89% since the start of 2022.

In November, Lilium raised $119 million from existing and new shareholders and partners such as Honeywell. At the end of 2022 it had liquidity of 206 million euros.

Headed by former Airbus executive Klaus Roewe, Lilium is initially targeting contracts with large corporations and private individuals. It says it has 640 potential orders.

In a recent interview at Oberpfaffenhofen industrial airport outside Munich, once used to sustain the Berlin Airlift and now dotted with research labs and abandoned Cold War testing hangars, Roewe defended the unusual hinged-engine design.

"I think what is different in Lilium, compared to others, is that we haven't only taken something that more or less existed like a big drone or helicopter type of design," he said.

"You can make your engine become a lifting device, not only a fast device. If somebody said how do you design an unconstrained aircraft, it would look like that. Nothing else moves and it's all in the software."

That, he said, makes Lilium's concept closer to the uncluttered design of a Tesla than a helicopter. Lilium is also aiming for longer regional routes than urban air taxis.

"Complexity should not be in the physical parts but should always be in the software part, because that's the one you can change the fastest," he said.

Critics say the more radical design may be harder and take longer to certify than other eVTOL models.

Updated research from two academics who had previously questioned Lilium's battery plans suggests the design is "in the realm of possibility" but could face challenges in execution, industry publication The Air Current reported last November.

(Reporting by Tim Hepher; Editing by David Gregorio)