German eVTOL developer Lilium has revealed a new seven-seat version of its Lilium Jet and plans to go public through a combination with Qell Acquisition Corp.
The highly anticipated news follows announcements last month by rival eVTOL developers Archer and Joby that they also intend to combine with special purpose acquisition companies (SPACs) for post-money valuations of $3.8 billion and $6.6 billion, respectively.
Lilium’s deal with Qell, a SPAC led by former General Motors North America president Barry Engle, values the combined company at approximately $3.3 billion. Total gross proceeds to the company are expected to be around $830 million, including a private investment in public equity (PIPE) totaling $450 million. PIPE contributors include Baillie Gifford, funds and accounts managed by BlackRock, Tencent, Ferrovial, LGT and Lightrock, Palantir, FII Institute, and private funds affiliated with PIMCO.
The combination is expected to be completed in the second quarter of 2021, after which Lilium will trade on the Nasdaq under the ticker symbol LILM. Engle will join Lilium’s board.
Along with announcing the merger with Qell, Lilium confirmed a Forbes report that it has been working stealthily on a seven-seat version of its Lilium Jet for the past several years. The largest model the company had revealed previously was the five-seat technology demonstrator that made its first flight in May 2019 and underwent a low-speed flight test campaign before it was destroyed in a fire during ground maintenance activities in February 2020.
Lilium CEO Daniel Wiegand told eVTOL.com that the company will be resuming flight testing with an upgraded version of the smaller demonstrator this summer. But the production model that will undergo certification is the seven-seat aircraft that is currently in a detailed design stage, he said. Lilium expects to produce its first conforming prototypes next year, then take them through a two-year ground and flight test campaign with the goal of launching commercial operations in 2024.
Significantly, Lilium revealed that in 2020 it received a Certification Review Item (CRI)-A01 for the 3,175-kilogram (7,000-pound) maximum gross weight aircraft from the European Union Aviation Safety Agency, which will guide the company through its certification program. Establishing a certification basis is a key milestone for eVTOL developers. Joby received the U.S. equivalent — a G-1 issue paper from the Federal Aviation Administration — for its five-seat air taxi last year, but other eVTOL developers have not publicly confirmed they have reached the same stage.
Wiegand expressed confidence that the proceeds of the Qell combination will see the company through certification, on top of the nearly $400 million in investment it has secured to date. “The $800 million we’re raising in this merger [is] such a big step for us as an eVTOL company, because it means that we can actually say now we are funded for the certification, with a little bit of buffer on top,” he said.
According to Wiegand, the larger Lilium Jet will be optimal for its regional air mobility model, which envisions flying passengers longer distances between cities, or from urban centers to the countryside, rather than on short intra-urban hops.
“The business model we’re running is an inter-city shuttle flight business model. This is very different to the on-demand ride-hailing type of business models which people usually associate with eVTOLs or urban air mobility, and this business model gives us two advantages,” he explained.
“The first advantage is that you get into hours of time saving for your customers because you’re flying longer trips. And this means that the second advantage is you can bring more passengers on one aircraft, and this helps you get better economics because you can distribute the pilot cost and the landing fees over more tickets.”
Wiegand told eVTOL.com that while the company continues to develop the digital platform for a Lilium-branded service, it does not intend to operate the aircraft itself. Lilium has not yet announced its “airline partners,” he said, although he pointed to recent agreements with Ferrovial on infrastructure and Lufthansa on pilot training as examples of the company’s collaborations.
“It’s very much an ecosystem approach,” he said. “It means less CapEx investments on our side, and we can leverage the strengths of all the strong players in the industry. There’s no need for us to do something that others can already do great and . . . have perfected over decades.”
According to Lilium chief strategy officer Alex Asseily, the company is also pursuing turnkey enterprise solutions for government and corporate customers.
“For example, we might lease a fleet of aircraft with supporting maintenance contract to a logistics company to help them move freight faster in a specific region,” Asseily said in an investor call on March 30. “We have a number of active conversations with potential turnkey enterprise partners around the world.”
Assuming an aircraft unit cost of approximately $2.5 million and service life of eight years, Lilium estimates that its business to consumer service will generate a lifetime profit per Lilium Jet of around $10 million, compared to $5 million for turnkey enterprise service.
“With the turnkey enterprise model we will charge an upfront fee and an annual maintenance fee over the course of the jet’s life,” Asseily explained. “This means we will be exchanging some of the profit upside of our network business to increase revenue visibility and immediate payback of the aircraft.”
Engaging with the technical community
While a seven-seat eVTOL aircraft may make sense from a business perspective, Lilium’s design carries significant technical risk. Rather than the propellers and traditional flight control surfaces of its winged competitors, the Lilium Jet uses 36 small ducted fans in its wings for both thrust and control — an architecture that results in very high disc loading and therefore high power requirements for hovering flight.
A number of engineers have expressed doubts about Lilium’s design, most notably in a 2020 article in the German aerospace magazine Aerokurier, in which an anonymous aerospace engineer (with access only to publicly available information) argued that it was impossible for the five-seat Lilium Jet to meet its declared target range of 300 kilometers (186 miles). The engineer further asserted that if the aircraft spent 60 seconds hovering in take-off and landing, it would be able to sustain cruise flight for no more than four minutes.
Now, Lilium is addressing its detractors in a technical paper authored by company co-founder Dr. Patrick Nathen and reviewed by five engineering professors who agreed to add their names to the document. The paper reviews the basic propulsion architecture of the Lilium Jet, acknowledging that it has a disc loading that is up to 10 times higher than some open propeller architectures. It also details its designers’ assumptions — including an optimistic battery energy density at the cell level of 320 Wh/kg — while exploring how varying those parameters would impact the aircraft’s expected performance.
The document concludes that the seven-seat Lilium Jet will be able to achieve a range of 261 km (162 mi) with 320 Wh/kg batteries and 60 seconds of hover time, but will still manage 180 km (112 mi) if the energy density is assumed to be 250 Wh/kg. (Lilium’s investor presentation notes that the company evaluated more than 50 battery technology companies before selecting fast-charging silicon-anode lithium-ion pouch battery cells that have been demonstrating greater than 330 Wh/kg in bench testing over 800 cycles.)
Lilium also argues that design choices and acoustic liners will allow the company to reduce noise in a hover to 60 dBA at a distance of 100 meters (110 yards), on par with what Joby claims to have achieved, and sufficiently quiet to take off and land in dense city centers.
“We have been in the past years not only secretive about the seven-seater and the serial aircraft, but also in general about our technology,” Nathen acknowledged to eVTOL.com. “We believe that right now is the right time to speak much more about the technology; to open up and to stay engaged out there with the community.”
“There’s so much excitement and curiosity on the technology and how it works that we intend to really connect with the community now that the aircraft is known to the public,” Wiegand echoed. “So we will not stop with this paper here — this is just the baseline for people out there to be able to understand and maybe do their own calculations.”
Mike Hirschberg, executive director of the Vertical Flight Society, told eVTOL.com that “the paper includes a number of startling assertions about the aerodynamic and propulsive efficiency of their aircraft, which Wiegand says is backed up by extensive analysis, modeling and simulation, ground testing, propulsion system wind tunnel testing and flight testing. Their technological breakthroughs allow Lilium to not only extend the Lilium Jet to seven seats, but also to larger aircraft sizes in the future.”
Because Lilium’s paper does not include the supporting data Wiegand referenced, it is unlikely to silence the company’s harshest critics. Nevertheless, Hirschberg praised the company’s overall decision to be more open about its design process.
“Part of the scientific process is to publish the theory and reasoning behind revolutionary concepts such as the Lilium Jet. So, this begins the scientific debate,” he said.
This article has been updated with details from Lilium’s investor presentation.