Interview with Lilium CSO Alexander Asseily

Interview with Lilium CSO Alexander Asseily
We chat about electric passenger jets, vertical landings, and SPAC mergers.
Published  
September 4, 2024

Last week we spoke to Lilium's Chief Strategy Officer Alexander Asseily. Lilium will be one of several electric vehicle companies to come to market this year when it merges with Qell Acquisition Corp, a SPAC headed up by former General Motors North America president Barry Engle.

But the company isn't building trucks or cars. Instead it plans on creating small passenger jets, powered by electricity, which it will use to transport people across a network of helipad-like stations.

During our conversation with Alexander we touched on the company's plans, how its jets and network will actually work, and why Lilium decided to merge with a SPAC. You can watch a video of the discussion below or read the transcript.

David Kimberley: Welcome, everybody here and thanks very much for joining us. My name is David Kimberley and I'm part of the editorial team here at Freetrade. If you are unaware of us, we have a daily newsletter, Honey, which goes out at 4:00 pm every weekday.


So if you're interested in getting that into your mailbox every day, remember to go and sign up. Now, with us today, we have Alexander Asseily, who is the chief strategy officer at Lilium, which I'm sure many of you are familiar with, an Electric Vehicle Company, which Alex will soon tell us more about in a sec. Alex was previously CEO and founder of Jawbone, which I think many people will also be aware of, which was a company that made wearable electronic devices. So, Alex, welcome. Thanks very much for joining us.


Alexander Asseily: Thanks very much. Much appreciated.


David Kimberley: So maybe to get started, could you tell us a bit about Lilium? What is Lilium? What are its plans? What do you do? All those sorts of things.


Alexander Asseily: Happy to. I'll start from in a sense, from the beginning. Lilium was founded by four friends who were all engineers at the Technical University of Munich. They had a vision of really reshaping how you get around by applying electric propulsion and batteries in the sense to aircraft, but taking advantage of what electric propulsion can do in order to reimagine what an aircraft can actually do. 

And so they have developed over the last five years, a set of technologies and an aircraft architecture which has created a jet aircraft that can take off and land vertically that is otherwise a fixed wing jet aircraft. 

And so the idea being that you can now connect cities directly with each other, with an aircraft that initially will do 150 miles and over time, it'll go up. You can take off and land vertically with very low noise. So considerably less noise than a helicopter. And of course, because it's electric, you have all these other benefits, like zero emissions, much lower carbon footprint. The engines themselves make less noise. There's a bunch of redundancy you can build into it. 

And so the company is really at the forefront of pioneering in a kind of a revolution in how we get around, essentially. And to some extent you could think about the ways we've been getting around haven't really changed that much in probably the last 50 or 60 years since high-speed Rail was deployed in places like Japan and France. And so this is really a steep change in both the efficiency, the time savings, the carbon footprint and so on, of high speed regional transport.


David Kimberley: Brilliant, very interesting. And maybe can you talk a bit about your own background and what you do at the company? I mean, you’re chief strategy officer, which is quite a grand title, what does it actually mean?


Alexander Asseily: It doesn’t get grander! So I've been an investor in the company since series A. So since 2016. I met Daniel and his co-founders back then, when I think about 10 people, and I was very much enamored by Daniel as a CEO, a very talented engineer with a big vision, I was very much won over. 

And my background is in engineering and in products. I immediately saw the potential of this new architecture and the disruptive nature of what these kinds of technologies can do for society, for the environment, so on. And I've been playing a kind of quasi board member role since then, both as a sort of engaged shareholder, but also as an adviser to Daniel and other members of the management team. 

And then last year, about a year ago, I hopped into this, like I said, very grandiose title to help think through the kind of the next phase of strategic growth. So fundraising, how do we go out and do the right kind of commercial deals? How do we position ourselves in a highly competitive global landscape for mobility and basically take the company to the next level? 

And so the idea being not so much that I can help with aerospace, because many of the folks around the table have learned more about building and certifying and shipping aircraft than I will ever learn. But it's more navigating the intersection between high technology and consumer experience — it’s the start….startup journey and so on, which of course I've been through a few times before.


David Kimberley: Fantastic, and maybe can you talk a little bit about what markets you're operating in or hoping to operate in? Because I think if you look over Lithium's website, it seems very much like it's US focused, although you seem to have most of your operations in Munich, as you said. So where are you working? What are your plans for the future in terms of which regions are you hoping to do business in?


Alexander Asseily: That's a fair question. We've certainly made announcements about Florida, but we have very much plans to be launching in Europe at the same time. So the company is based in Munich and we are doing concurrent certification, which means we are applying the certification for formal approval from the authorities, both in Europe, from NASA as well as FAA in the US. 

And that gives us the ability to access both markets in both Europe as well as the US, in addition to a bunch of other countries that recognize those certifications. Now, we've announced Florida as our launch region in the US, but what you may have caught is also we've announced vertical locations in Germany and other partnerships with companies in Europe like Lux Aviation, Lufthansa….and so on. So we very much have plans to launch in Europe as well as the US and then eventually be really global. I mean, we've got Tencent as an investor. We plan to go into China eventually. We see China as potentially being the biggest opportunity long term. But we're probably going to push those plans until a couple of years after we launch Europe and the US just because obviously we need to get our feet on the floor.


David Kimberley: Great. Well, I suppose in order to launch, you do actually have to have some planes. So how far down the development track are those? I mean, do you have planes that are up and running or are they still in some sort of trial stage? What's going on? And perhaps also for people that aren't necessarily familiar with the company, can you describe what those actually look like? I mean, because they're not….this is not a 300 person jet or something we're talking about, right?


Alexander Asseily: Yeah, no, absolutely. What I'll do is I'll, you know. I'll do as well with words as a picture could do them more efficiently. So the Lilium jet is a futuristic looking aircraft with two main wings and the rear. And to forward wings, which are typically called canard wings, canard configuration. 

And what that allows is….and then there are 36 engines distributed along those four wings, 12 on each rear wing, six on each front wing. And the aircraft itself has seven seats. So one pilot, six passengers. And because it's got these four wings, the flaps into which these engines, these jet engines are mounted can rotate. Vertically and allow the aircraft to take off in a very stable fashion and then those….bank of jet engines then tilt forward and it transitions into forward flight and they basically become a standard fixed wing aircraft. 

And, to some extent, this has only really been enabled by the fact that these are electric jet engines that have been designed internally by Liliom. This is proprietary technology and that allows this kind of beautiful synthesis of an aircraft that's a very efficient cruising aircraft that can travel fast and fall, but also allow that same aircraft to just land vertically and take off. 

So what the company has been doing for the last, more or less from 2015 until 2019, 2020 was proving this architecture. So if you go to the web, you go to the Lilium website and you'll see those videos we have of multiple technology demonstrators over the course of those years, that in a sense are proving our control systems, propulsion.

 Is it stable? How does it transition from vertical to forward flight? How does it rotate? How does it deal with wind? How does it deal with a loss of a particular engine? And so that first five years was really what's called technology maturity phase, which is to say, does this concept work? And, once we essentially confirmed that it worked and that happened in 2019, more or less, we started to work on a formal commercial aerospace program. 

And the commercial aerospace program is the same kind of program that Boeing or Airbus or Embraer would apply to build, let's say, a 320 commercial aircraft or a 380 or a 737 or one of those aircraft. So, the team that we have that's building this aircraft are literally the team that have shipped those very same aircraft I mentioned earlier. And so you need to apply the same rigor, the same attention to detail around safety, around stability, around longevity, around performance that you would have for a standard large commercial airliner to the Lilium jet. 

And so this is not just because it's smaller, doesn't mean it's not subject to the same kind of standards. And in fact, they also have made it very clear to the European regulators who made it very clear that they want to see those same standards. If you're going to be carrying passengers, they want to see the same safety standards. And so all of that kind of rigor, all of that type of philosophy has been ingrained in the development process. And that started a couple of years ago. And, listen, a typical commercial airliner program will be six to seven years. And we are taking the same approach, so we started the programme a few years ago and in 2024, more or less, we will launch a certified aircraft and market.


David Kimberley: They're amazing to look at. And I think another part of your plans are these sort of, almost like helipads, that will be dotted around the place and cities and so on, which you touched on a bit earlier. But can you talk a bit about that? I mean, are you facing any problems trying to explain what this is to whoever it might be, regulators, investors, that sort of thing? And what do you sort of envisage the network, if that's the right word, and use of your vehicles, looking like?


Alexander Asseily: It's a great question. A lot of it just depends on the way you go and what the muscle memory is, the audience you're speaking to. So, for example, and this is an important point with regard to the market opportunity, a lot of people come into this market and they think to themselves, “wow, this is a spanking new market. We have to create it from scratch.” It's really not entirely true. 

The reality is that the e-VTOL market hasn't really started yet. But the VTOL [vertical take off and landing] market is a $35bn industry, which is a fancy way of saying the helicopter market right now. If you go to places where helicopters are used heavily, like, for example, parts of the US, parts of Europe, Brazil, Hong Kong, if you can speak to people in those regions, they get it right away because they already are using these airports, heliports. 

They already do point to point, except that they're only offering those services to people who can afford, you know, 2000 bucks or €2,000 or £2,000 for the short haul. In a sense, what we're doing is we're bringing an e-VTOL aircraft, [which] by virtue of being electric Is four or five times cheaper to operate than a helicopter. And we can pass on those savings, obviously, to customers. But it's also like a 100 times lower footprint of noise, so it will be permitted to land in more places. 

So anyone who operates in and around VTOL, [for business] aviation or private aviation or helicopters, they get it right away and I'll give you an example of that. So in the United States, there are about 14,000 places you could physically land a Lilium jet today if it was available today. And so the question then becomes, well, why don’t you use those places? And the short answer is we will. The only difference is that our goal is to build regional shuttle services that connect cities and allow high throughput. In other words, we want to be able to allow the maximum number of people to enjoy the service day in, day out. 


For example, from Miami to West Palm Beach or from New York to Boston, for example. The demand for these routes is so high that you can't just have a single landing spot with a single gate because at that point you'd be….you’d basically be able to carry, I don't know, 50 people a day. It's not that many. So what we have to re-envision is to say, like, what can we do to adapt, especially in these urban hubs, the existing infrastructure, so it can actually handle dozens of aircraft that are cycling through carrying not just 50 people a day, but hundreds of people a day, and what you basically need to do is make a bigger piece of infrastructure. So let's say eight gates, multiple landing spots. And of course, you need charger infrastructure because you're charging up one of these aircraft in half an hour. In fact, in 15 minutes, you're getting to 80 percent charge, much like one of the super charges for EVs. 

So there is an element here of leveraging existing infrastructure. So heliports, airports and so on. And they exist everywhere, Europe, US and so on, but also in the heavily used locations, especially around airports and city centers and urban centers. We have to start thinking in terms of throughput, and that involves investing through our partners, like Ferrovial, which owns and operates Heathrow Airport is a big partner of ours. We're going to essentially build out this infrastructure so it can handle thousands of planes a day and dozens of planes an hour.


David Kimberley: So am I right in assuming that it would mainly be within a single country? So it's almost like if I want to get from London to Birmingham, I can use a Lilium flight, but maybe wouldn't from, say, London to Paris. I'm just thinking from a practical point of view, it's very much easier to do an internal flight rather than abroad, one that would probably involve all sorts of security problems and those sorts of things.


Alexander Asseily: It depends where you are, I think going from South Korea to North Korea might be a tricky one. But I think probably it….funnily enough, even post Brexit, I think even the UK to France isn't a big deal. In fact, there's a lot of civil aviation and private aviation folks who do it all the time, setting aside London and Paris for a second, that are connected, in a  sense, at the center with the Eurostar. 

What's more interesting is to consider the possibility, for example, that you could fly from…. you could fly from Bristol to Lille, which are really hard to connect. Because if you're sitting in Kings Cross in London and you're like, “oh, I need to go to a meeting in Paris”, the train’s there. It's a bit slower than the aircraft, but it's right there. The problem is not so much if you're sitting on top of King's Cross. The issue is if you're anywhere else but in the center of London to a large extent. Just think about it in terms of time savings and convenience, there are some trips today that [run] pretty well with trains. The truth is there just aren't that many and they're not flexible. So it's hard to say. For example, you could say, “oh, I want to go from London to Paris.” But the harder thing to say is I want to go from you know, I want to go from Greenwich, which is sort of on the periphery of central London to Fontainebleau, which is on the periphery of Paris. Much, much harder to do, and in that case, you would probably be saving like three hours.


David Kimberley: OK, well, I can't wait to do that, but doing so, I would imagine, will be rather expensive. But you guys are about to list, I think, in this quarter. So can you talk a bit about, firstly, why you agreed to do that or why you wanted to go public, particularly via a SPAC and not a regular listing and what you'll do with the money you're raising from it once it's completed?


Alexander Asseily: It's a great question. Look, the nature of aerospace….so when we went back, if you rewind the clock to about a year ago, we started evaluating the different financing options, a company like Lilium, which is essentially deep tech, three years before product launch, big capital expenditures, because you're building big hardware, big infrastructure, big supplier contracts and so on. I mean, you can imagine, right, it's more complicated than a Bluetooth headset, which is already complicated enough.

So you start to look at it as a project that requires hundreds of millions of dollars to get right and you don't want to be terribly distracted while you're doing it. Otherwise you don't really like stopping and starting. Oh, we built the wing and now we need [fundraising] to build the next wing. That's not helpful. Also, you need to hire hundreds of good, really good engineers and you need those engineers to be stable. 

So when we looked at all opportunities, we looked at private financing and we had a ton of opportunities, like traditional private equity, we looked at strategic investors, so companies that we may or may not want a relationship with in the future to take a strategic interest in what we're doing and can come with both capital and commercial opportunities. And then lastly, because of what was going on in the public markets with SPACs, it would have been foolish for us to not look at them. 

And I'll tell you why, the main reason is the capital markets, the public markets have somewhere between 30 and 100 times more capital available, just available for things like this and that they're much more instantaneous and so much a faster process to raise capital. And you can bring people along for the ride. In other words, a mission like Lilium’s, it's a mission that a lot of people who invest, whether they're retail investors or fund managers, can understand instinctively — “OK, I see this is the future. I see that the market's huge and therefore I can see the journey of how this company becomes big and I believe in the vision” and so on. That's not necessarily the case for other companies. 

And so when it came to deciding between the options we had, we ended up choosing the SPAC route because of the of the reasons I just mentioned, the capital available to take us through to certification and end product launch, but also the quality of the SPACs we were talking to. So we ended up picking Qell, for example, as our merger partner, because it was set up by Barry Engle, who is the former president of GM North America. Incredible experience running a large industrial company, understands the US market, understands complex supply chains. And we felt that was a really good marriage, not only to bring in capital, but to bring in US-based expertise to help us grow.


David Kimberley: All very, very interesting, and I think you guys are definitely not the only company in the EV sector to have gone public this year, and definitely from our point of view, we see a huge amount of interest in renewable energy and EV companies in almost whatever they're doing. And that's really taken place in the past 18 months or so. Why do you think that's happened? I mean, why has there been such a surge in interest, really during the pandemic, in the sector that Lilium is active in?


Alexander Asseily: I'm sure some folks have done more analysis around this but my sense is that the attention to the environmental issues was already growing. Over a number of years, we all know that it was accelerated with certain products that, you know, like Tesla and so on, and solar panels getting cheaper and greater push from NGOs and governments to decarbonise and so on. I

I think what happened during covid was it forced people to reassess in a very short time period what's important. And I think the end result of that process of reflection is like, wait a minute, the world can come to a standstill because of this actually relatively nonlethal virus. We need to prioritize global issues. What's the other big global issue? Well, it's environmental stuff. 

There's also another dimension here, funnily enough, which is related to the format of transport, which is I think people prior to the pandemic were like, “oh, I'm happy to get in a big plane with four hundred people.” And now they're like, “oh, I'd much rather get into a small plane that can take me from point to point.” 

We're going to be making bigger aircraft. But I think to some extent the world hopefully will move to a mode where long haul trips will be done by high speed rail or larger aircraft. But actually regional stuff, you want to be moving much more flexibly. You don't want to go to a hub, get into a train or an aircraft with four hundred other people and then be transported to another hub. It's much nicer to be hyper local when you're talking about regions. So I think it's a mixture of things. 

But look, the environment, the urgency of dealing with the climate, the ongoing sort of climate change, I think is driving a lot of this. And we're seeing a lot more interest from ESG investors. If you look at the carbon footprint of the Lilium jet. So the net footprint, when you account for building the aircraft, operating the aircraft, but also building the infrastructure on which the aircraft runs, it's got a lower footprint per passenger mile and high speed rail. The worst is commercial aircraft. Then internal combustion cars, then electric cars, then high speed rail, and then the lowest carbon footprint is a Lilium jet, because you basically don't need to build roads or rail. You're just building the aircraft and then you're operating on a very low carbon budget. So those things really matter and the calculations are pretty easy to do now.


David Kimberley: OK, we'll change tack a little bit. We've got a few questions from attendees and also from our own community. So one one person asks Alexander, would you say Jodi Jobby and Archer Aviation or Lithium's biggest competitors?


Alexander Asseily: We know of both companies very well, and we respect all the players in the space enormously. It's a little bit like, you know, climbing up a giant mountain like Everest and casting stones at the other people trying to climb the same mountain. It doesn't help, so we have a ton of respect for anyone who gets into this space. 

We also are very confident in what differentiates us. It's not just about being one of the first to hit the market. Ultimately, it's about the things that make the aircraft successful. The aircraft ultimately needs to deliver value for the customer. And that comes down to speed, range noise and ultimately also payload. 

So, you know, we've chosen an aircraft architecture that we think is the winning architecture. We're the only jet aircraft out there. I'm sure everyone who's on this call has flown in a jet in a commercial jet. Some of you may have also flown in a propeller plane. The question you have to ask yourself is, which one would you rather fly in regularly? So we've jumped straight to the jet age of electric aviation and we've invested heavily in propulsion technologies. And that allows us to have 50 percent more payload for passengers, in some cases, 100 percent more payload for cargo. It allows us to have the lowest noise, probably the greatest redundancy, the highest safety and so on. So we think we've chosen a good track, but frankly, we would love it for all the players in the space to be successful because the market is huge. The market is virtually limitless. And we think that it's a hell of a journey for all of us, so, you know, we're trying to be as constructive as we can, all the competition.


David Kimberley: Well, actually, your last point that touches on another question we got, which was how much of the proposed market exists already and how much can you expect to create with a new transport offering? 


Alexander Asseily: So while I mentioned this earlier, VTOL helicopters is about a $35bn industry today globally. And so that is a kind of easy sort of low hanging fruit because you're basically turning up with a, you know, less polluting, much, much cheaper, much less noisy aircraft, it's also considerably safer. 

And then you have to ask yourself what kind of trips are currently done with other modes of transport that can be done with Lilium. So there's long car journeys. There's certain kinds of flights that you would otherwise not do. So, for example, a good example of this would be, I'll give a US example, because it's one of the ones we've been using recently in New York to Boston. It's quite hard to get from New York to Boston. You have to have to drive for hours or you take a plane. 


With the plane journey, it’s very cumbersome to get to the airport, check in and do security. If you go from Manhattan to Boston, to center Boston, it takes you fifty five minutes in the Lilium jet. So you'd save two hours in that case. Right, so it's a combination of absorbing parts of the current VTOL market, absorbing parts the long car journey market, things that people would do because there's no alternative, certain kinds of train journeys and then certain kinds of regional commercial aircraft journeys. 

Then the question becomes, is the other emergent properties that come out of this industry where you're creating new routes that didn't exist before? I mean, we're certainly believers in that. But initially we're going to be connecting cities that are just very poorly connected to each other. It just takes too long to get from one to the other.


David Kimberley: We have, I think, one last question, which is perhaps an ambitious one from Sean — will these aircraft be available for private owners, perhaps following the same rules as private helicopters have?


Alexander Asseily: We will, if you look at all our materials online, you'll see that we've approached our commercialization plans with a hybrid sort of approach. On the one hand, we're planning to sell fleets of aircraft to partners, customers who will then operate those. And so, for example, a logistics company would buy a fleet of 100 aircraft and would operate them to move boxes from ‘a’ to ‘b’. Another version of the model, we build and run our own networks, which is what we've announced and we plan to do in Europe and in Florida. 

You can see examples of that online, which we've announced with partners like Ferrovial. Now, the reason I'm telling you these things is because what I'm really trying to say is we're exceedingly open minded. But what we want to do is we want to deploy as many aircraft as possible, as safely as possible, and actually create utility for the greatest number of people possible. So we certainly can imagine a scenario where we run networks of these jets, I think, selling them to individual customers. It remains to be seen if we're going to do that just because it's not so much because we have a philosophical thing against it, but because it might just get in the way of scaling the business.


David Kimberley: Great. Well, I think that's all we have time for today. So Alex, thanks very much for joining us. And for anyone watching on YouTube or here now, remember to subscribe to Honey. That's our daily market newsletter at Freetrade for us, honey. So I'll say thanks again to Alex and perhaps we'll catch up another time. Thanks very much.

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