Lilium has started taking pre-delivery payments from early customers for its eVTOL aircraft as it budgets for a busy and capital-intensive 2023, during which it intends to build the first full-scale preproduction example of its six-passenger Lilium Jet. In a December 6 conference call for investors, the German company said it expects to reach a final agreement with EASA over the means of compliance for its type certificate during the first half of next year as it prepares to start test flights with the aircraft in 2024, en route to planned European type certification in 2025.
On the eve of releasing third-quarter financial results, Lilium announced that private aircraft management and charter group Volare has agreed to add up to 20 of the Lilium Jet eVTOL aircraft to its fleet. The UK company's new eVolare division placed firm orders for 10 of the Lilium Pioneer Edition version of the all-electric aircraft, with options to take another 10.
The production run for the four-passenger Pioneer Edition will be limited to 50 units. Lilium aims to have all of these sold by the end of 2023, collecting pre-delivery payments of 50 percent of the purchase price in the process. With a cabin that can be customized for individual customers, the aircraft will sell for $7 million to $10 million, potentially producing $250 million in deposits.
Including a recent provisional order from Saudi Arabian Airlines for 100 of the standard Lilium Jet, the company is now reporting a sales backlog of 603 units. It says it expects to firm these agreements up into binding contracts during 2023.
Lilium’s CFO, Geoffrey Richardson, explained that the company is seeking new grants and subsidies from governments and other agencies to support the development of the preproduction aircraft. He told analysts that the 2023 budget now being prepared will include some unspecified cost savings as the company seeks to stabilize spending following the conclusion of a $119 million funding round in November.
In a letter to shareholders, Lilium reported that cash spending in the third quarter of the current financial year reached €69 million ($73 million), which was up from €63 million in the second quarter. This increase was mainly due to a ramp-up in payments to suppliers and in line with its €250 million budget for 2022. The letter stated that the pre-delivery payments from customers are viewed as "an integral component in our future capital structure."
Lilium CEO Klause Roewe told analysts that since September the company’s engineering team has more than doubled the volume of certification basis requirements submitted to EASA to around 80 percent of the total. He said that the remaining certification plans are largely drafted and ready for submission, and that about 72 percent of the means of compliance has been agreed upon with the European safety regulator.
During the week beginning December 14, EASA officials will conduct the third of four audits to support Lilium’s application for design organization approval. The audit process should be completed in 2023, according to the company.
Meanwhile, flight testing with the subscale Phoenix 2 technology demonstrator aircraft is continuing in Spain, with this vehicle recently having achieved a new top speed of 120 knots (222 km/h). The company plans to add a second demonstrator, designated as the Phoenix 3, in the first quarter of 2023 to accelerate development work while the full-scale preproduction prototype is under construction.
As of the end of the third quarter, Lilium said it had suppliers in place covering around 75 percent of the Lilium Jet’s anticipated bill of material cost. It is currently focused on adding suppliers for key components such as the fans for the eVTOL aircraft’s 30 ducted electric motors that tilt on its wings and canard and also for the inceptor sidestick controls. As of the end of November, the company had filed 74 new patent applications, mainly with the European Patent Office.
