Lilium to Set Up Asian HQ in Shenzhen, China for All-Electric Air Vehicle Launch
Updated: Jan 5, 2024
Lilium, backed by Tencent, chooses Shenzhen as its Asian headquarters, targeting the Greater Bay Area for its all-electric air vehicle launch.
German aerospace firm Lilium, supported by Tencent, has revealed plans to establish a regional headquarters in Shenzhen, China, as a crucial step towards introducing its all-electric air vehicle in the Asia-Pacific market. The Bao'an District of Shenzhen, home to Tencent Holdings, has signed a memorandum of understanding with Lilium to facilitate the opening of its Asian headquarters by the end of the year. This collaboration aims to leverage Shenzhen's resources to assess the market, establish offices and vertiports, and commence operations of the Lilium Jet in China.
Lilium's CEO, Klaus Roewe, recognises China as a significant opportunity in the flying vehicle industry, estimating that it could contribute up to 25% of the market. In line with this partnership, Shenzhen Eastern General Aviation, the sole helicopter operator connecting Hong Kong and mainland China, has pledged its support to Lilium. Shenzhen Eastern will assist in identifying suitable takeoff and landing sites, operate the fleet, and provide maintenance and crew services. The company has already committed to ordering 100 Lilium Jets, pending airworthiness certification from the Civil Aviation Administration of China.
While Lilium awaits approvals from the European Union Aviation Safety Agency (EASA) and the U.S. Federal Aviation Administration, it expects certification from the European regulator by 2025. Shenzhen Eastern, a general aviation operation platform, plans to collaborate with other domestic companies, including Xpeng Aeroht, an affiliate of electric car manufacturer Xpeng, which is also working on a flying car.
Notably, the concept of flying cars still lacks a consensus on airworthiness certification, and no company has received such approval in China. Consulting firm SMG projected that Lilium would require $250-280 million in 2023 to complete its airworthiness certification application. As of the end of 2022, Lilium had $219 million in available cash, but its first-quarter expenditure amounted to $67 million. Additionally, the company faced the risk of delisting from Nasdaq due to its stock price dipping below the $1 threshold. To overcome this, Lilium announced a capital-raising plan, including a $100 million investment from Tencent, which holds a 23.4% stake in the company. Following this announcement, Lilium's shares rebounded above $1.
Lilium plans to set up its regional headquarters in Shenzhen, China, backed by Tencent.
The Bao'an District in Shenzhen will support Lilium in market assessment, office establishment, and entry into service for the Lilium Jet.
China is expected to account for a substantial portion (up to 25%) of the flying vehicle market.
Shenzhen Eastern General Aviation will aid Lilium in identifying potential takeoff and landing sites and will operate the fleet.