In 2024, the European eVTOL industry faced substantial financial turbulence, with German startups Volocopter and Lilium struggling to stay afloat. Despite securing billions collectively in funding, both are on the brink of insolvency due to capital constraints, regulatory hurdles, and shifting investor sentiment.

Last year, the German eVTOL company Volocopter GmbH applied for insolvency proceedings at the Karlsruhe Local Court. Despite multiple financing rounds and one of the industry’s lowest burn rates, the company failed to secure additional funding to continue operations outside insolvency. 

The news follows Lilium’s efforts to get the German federal government to guarantee €50 million of a €100 million convertible loan following the insolvencies of its subsidiaries Lilium GmbH and Lilium eAircraft GmbH.

The company had already secured a matching €50 million commitment from the State of Bavaria – but only on the condition that federal backing was secured. The German government said no. 

“A Christmas miracle”

In late December Lilium signed an asset purchase agreement with the newly formed Mobile Uplift Corporation GmbH — a consortium of European and North American investors which focused on the acquisition of Lilium GmbH and Lilium eAircraft GmbH’s operating assets. 

Participants have not been publicly disclosed but are rumoured to include Marian Bocek, Earlybird Venture Capital, GenCap, 468 Capital, Financial Investments SPC, and Lilium partner and supplier CustomCells.

Mobile Uplift Corporation aimed to provide sufficient funding to restart business operations. The agreement resulted in “well-over €200 million” for the beleaguered company.

As part of the restructuring, Lilium’s subsidiaries terminated all employee contracts on December 20, 2024, but Mobile Uplift Corporation GmbH plans to rehire employees upon closing. 

But since then there have been stories of frozen accounts, unpaid staff, and people walking out. A Q1 restructuring deadline feels increasingly unrealistic. 

All this from a company that has raised over $1.4 billion and secured hundreds of millions in pre-orders.

In the US, Lilium could have been saved, says industry insider

Lilium’s technological edge is undeniable — with a greater speed and range compared to US competitors like Joby and Archer, and a superior passenger capacity, the Lilium Jet was set to transform aviation. 

However, capital constraints and a failed NASDAQ listing strategy have significantly undermined its progress, leading to what may be the most significant setback in the European eVTOL industry.

I spoke to an insider close to the company who explained that Lilium’s current crisis stems from a missed capital investment of “well over $200 million”, expected to sustain the company for at least another year.

Leading investor, Marian Bocek, CEO of Inobat, was expected to provide the bulk of the funds, but delays from a third-party financial source have resulted in weeks of uncertainty, leaving smaller investors hesitant to commit their own capital.

This led to a cascading effect, with each passing day eroding confidence in the deal.

After six weeks of stalled transactions and reassurances that funds would arrive “tomorrow or the day after,” hope is fading. Insiders acknowledge that time has nearly run out, and unless a last-minute miracle occurs, Lilium may be forced to file for insolvency.

One of the key challenges European companies face is access to capital. Unlike their American counterparts, who benefit from more robust investment ecosystems and stronger government support, 

“In the US, this would not have happened,” an industry expert commented. 

“There’s much better access to capital. If Lilium had been based in the US, it likely would have been saved already.”

Conversely, this month, US eVTOL company Archer Aviation secured $300 million in equity capital, bringing its total liquidity to approximately $1 billion. Archer has obtained FAA approval to launch commercial operations in 2026 and has expanded its focus to military applications with an exclusive deal with defence contractor Anduril to develop military aircraft. It definitely puts European eVTOLs a step behind. 

What next for Lilium?

Unless a last-minute investment steps in, Lilium could soon file for insolvency, joining a growing list of failed mobility startups.

“It’s a pivotal moment,” an industry insider concluded. 

“eVTOL is coming—that’s certain. But whether Europe will be a leader in the space? That’s looking far less likely.”

If Lilium collapses, it won’t just be a loss for its investors and employees but Europe’s entire approach to funding high-risk, high-tech ventures.

Where are we at as a sector?

It’s not looking good at a glance. In late 2024, Rolls-Royce announced the closure of its Advanced Air Mobility division after failing to find a buyer. Late last month, Airbus Helicopters announced plans to temporarily halt its CityAirbus NextGen eVTOL demonstrator program, citing the need for advancements in battery technology.

However, yesterday, Volocopter announced a partnership with Jet Systems Hélicoptères Services, a licensed air service provider with over 30 years of experience, to introduce eVTOL services in France.

Under this long-term agreement, Jet Systems will receive an initial delivery of two VoloCity eVTOL aircraft following their certification by EASA.

That said, the company needs substantial financing to take further steps toward market entry and lift itself out of the insolvency process. 

Assuming Lilium and Volocopter — worse case — fail to raise enough funds to reach commercial viability, the question arises as to whether there’s anyone else to step into the breach.

Excluding China, the key players in the industry, each representing different technical specifications and business models — and one up-and-coming — look something like this: 

Let’s take a look at Vertical Aerospace and Zuri. 

Vertical Aerospace: A compelling UK contender

The biggest contender to the German duo is Bristol aerospace manufacturer Vertical Aerospace.

Founded in 2016, the company’s flagship eVTOL, the VX4, is designed to carry a pilot and four passengers for urban and short-range travel. It boasts a range of over 160 kilometres and a top speed of approximately 241.40 kilometres per hour. 

I spoke to CEO (and former CFO) Stuart Simpson, who shared: 

“We are one of only two companies worldwide to have flown a piloted tiltrotor eVTOL. 

Our aircraft are designed for real-world operational needs, and we’ve developed the most powerful 1.4 MW battery in the industry, built in-house the battery consists of 12,000 finger-sized cells.” 

Simpson revealed that the company has taken a cautious approach, pushing back aircraft certification “from 2026 to 2028 to ensure we’re being open, honest, and transparent with our customers, suppliers, and regulators.”

“This move allows us to set realistic expectations and position ourselves as a mature, long-term-focused company.”

According to Simpson, the company’s burn rate is $100 million per year — “less than 25 per cent of what Joby and Archer spend — because we are laser-focused on aircraft development. With secured financial backing and a lean operational model, we’re in a stronger position than many competitors.”

The company has raised over $530 million but is not without struggle. In November 2024 US hedge fund Mudrick Capital converted $130 million of loans into equity, acquiring a 70 per cent stake in the company. However, in January Vertical raised $90 million, including $60 million from new investors, as well as $25 million from Mudrick Capital,

Earlier this year Vertical completed Phase 2 of its piloted thrustborne testing with the VX4 prototype, exceeding expectations for stability and performance. The company is now preparing for the next stage in its testing programme – piloted wingborne flight – a world first for a full-scale tiltrotor eVTOL.

It plans to commence public demonstration flights soon, aiming to achieve certification and initiate commercial operations by 2028.

Zuri: The Czech hybrid eVTOL approach

Czech company eVTOL Zuri, founded in 2017 by entrepreneur Michal Illich, has developed Zuri 2.0, a hybrid-electric VTOL aircraft capable of carrying one pilot and three to four passengers. Could it be a contender?

It features eight tilting propellers mounted on a high wing and rear horizontal stabilisers with a cruise speed between 300–350 km/h and a range of over 700 km, making it suitable for regional travel. 

The aircraft is powered by both battery and sustainable aviation fuels, with Illich contending, 

“To be viable, flights should cover at least 300 kilometres, and given current battery limitations, hybrid propulsion is the only solution.”

According to Illich, weight is the biggest challenge with battery-powered aviation weight. 

“While heavy batteries can easily be supported in ground vehicles, in aircraft, every gram counts, making it extremely difficult to carry large enough batteries.”

Zuri is one of the few European companies with a large-scale demonstrator already in flight tests; it’s been testing it for three years.

According to Illich, while the company has made significant progress in experimentation — testing many subscale models and developing a large-scale demonstrator, “our biggest challenge has been financial—securing the necessary investors.”

The company is years away from certification but has attracted widespread interest, including Denmark, the UK, and India – due to its large helicopter market, explains Illich  — as well as Taiwanese and Japanese companies.

“From the start, we’ve prioritised long-range flights, as short-range electric flights are impractical due to travel logistics and efficiency concerns.”

However, the company has raised comparably small amounts compared to fellow aviation companies, raising €4.4 million in 2024. 

But Illich contends that “unlike companies in Germany or the UK, we don’t need massive amounts of money “because costs are much lower in the Czech Republic. Salaries are 3 to 4 times lower than in Germany or the UK. 

Further, the region has a strong aerospace ecosystem with universities and small aircraft manufacturers.

Illich shared:

“Right now, we’re a 20-person team. We can scale to 50-100 employees before talent shortages become an issue.”

​In terms of advice for startups entering the space, Illich asserts

“It’s too late to start now—it takes too long. We’ve been at this for seven years and are only halfway there.”

Can Europe sustain a thriving eVTOL sector, or will American and Chinese companies dominate the future of urban air mobility? It’s a sector I’ve been following for over a decade, and ultimately, I want the right usecases to succeed. Without stronger financial backing and strategic support, Europe risks losing its place in the global aviation revolution — just as the market prepares for takeoff. 

Lead image: Lilium.