Lilium is facing bankruptcy because the air taxi company struggles to boost money

German aerospace startup lily There is a risk of bankruptcy if the state government doesn’t provide emergency aid for the southeastern state of Bavaria.

Bankruptcy would mark a dramatic decline for a startup once touted as Europe's best likelihood to construct the twenty first century equivalent of flying “cars.”

Lilium is one among quite a few firms attempting to construct “eVTOLs,” or electric vertical takeoff and landing vehicles.

These vehicles, popularly often called flying cars or air taxis, are being developed by startups within the US, Europe and Asia.

Today, nevertheless, Lilium is in trouble. The company is desperately attempting to collect tax money in Germany. And to date it has been unsuccessful.

Lilium is negotiating an emergency capital injection with each the German federal government and the Bavarian state government.

The company had applied for 50 million euros ($54 million) in loans from the federal government. However, his request was rejected by the German legislature.

In a regulatory filing published last week, Lilium said it had “received indications that the Budget Committee of the Bundestag of the Federal Republic of Germany will not agree to a €50 million guarantee for a planned €100 million convertible loan.”

The proposed state aid would have been issued by KfW, the German state development bank.

Lilium “is continuing discussions with the Free State of Bavaria regarding a guarantee of at least 50 million euros,” Lilium added in its filing.

A Lilium spokesperson told CNBC the corporate doesn’t intend to offer further comment beyond the statement set out in its 6K filing.

In response to Germany's decision to disclaim Lilium state aid, Hubert Aiwanger, Bavaria's economics minister, said: criticized the moveIt is “regrettable” that the federal government has decided to not support the corporate.

Danijel Višević, co-founder of Berlin-based climate technology investor World Fund, said that while it was “understandable” that lawmakers withheld support for Lilium because they feared the federal government was favoring one individual company over one other, it was common amongst politicians There is a misconception that air taxis are “toys for millionaires”. That idea was “too short-sighted,” he said.

Višević said it was unfair that US electric automobile maker Tesla – which burned through billions of dollars before turning a profit – was once in a position to get a loan from the US government, but Lilium was not.

“Flying cars” won’t be the proper term. But what Lilium ultimately desired to bring to the world was a vertical takeoff and landing aircraft that might fly people from one city to a different to ease congestion on the streets.

The company initially desired to launch its own digital “hailing” service that will have allowed users to order rides on their jets from specific locations where the vehicle could take off and land.

Lilium then decided to alter its business model.

Instead of developing your entire service itself, the corporate selected to partner with airlines and airport operators who would construct the service product and infrastructure needed to understand its ambitions.

Lilium's jets can cost as much as $9 million. The company also had a six-seat version in development, which might have cost a buyer around $7 million.

Lilium made big deals with people like Lufthansa in Germany and Saudia in Saudi Arabia. A collaboration was also agreed with Groupe ADP, a global airport operator based in Paris.

Lilium was founded in 2015 by 4 university students and quickly gained a fame as one among the best-funded air taxi firms in Europe.

The company managed to boost a whole lot of thousands and thousands of dollars from investors comparable to Chinese firms Tencent, Atomico and Earlybird.

In September 2021, Lilium went public on the Nasdaq stock exchange through a merger with a special purpose acquisition company called SPAC Qell.

At its peak, Lilium was price as much as $3.3 billion. Its shares have fallen to lower than 50 cents – a drop of greater than 95% since its stock market debut.