Q2 2022 Lilium NV Earnings Call

Speaker 1: up the AC20 family program and I was also leading services at AirPods.

Program and that was also leading services at Atlas in this role it's what did I do what it alone what do I bring to lithium I'll, let development certification production ramp up and also the operational deployment.

Speaker 1: In these roles, what did I do? What did I learn? What do I bring to Lilium? I led development, certification, production ramp up and also the operational deployment of, I have to say, the most successful large commercial aircraft program in the history of the world.

If I have to say is the most successful large commercial aircraft program in the history.

Speaker 1: Along the way, I got to know firsthand and by real practical experience the importance of safety, of customer focus, but also of unit economy.

Along the way I got to know firsthand.

Real practical experience the importance of safety of customer focus, but also of unit economics.

Speaker 1: I've also experienced, and forgive me for the world, the manufacturing hell of ramping up the production of a large complex aircraft. And this is for sure what we intend to do as Lilium as well. So why am I so excited to be here to have joined Lilium and what will be my contribution to Lilium?

<unk> also experienced and forgive me for the world many.

Manufacturing Hell of ramping up production of a large complex aircrafts and especially with what we intend to do is volume as well. So why am I. So excited to be here to have joint lithium and what will be my contribution to lithium.

Speaker 1: It all starts for sure with the product, with the aircraft itself. And ours has a unique architecture and the electric jet propulsion technology that is behind it. Quite simply I'm convinced that this aircraft will be the best in its class. I also believe that its unique architecture in the eVTOL arena has been rigorously conceived and validated.

It all starts for sure was a product was the aircraft itself and ours has a unique architecture and the electric jet propulsion technology that is behind it.

Simply I am convinced that this aircraft will be the best in its class I also believes that its unique architecture in the retail arena has been rigorously conceived and validated.

Speaker 1: Its technology makes it suitable for multiple use cases including for premium customers but also as a shuttle of people mover type of aircraft, potentially cargo aircraft or even other applications that we are looking into and that you would have yet to develop.

It's technology makes it suitable for multiple use cases, including for premium customers, but also as a.

Shuttle if people move up type of aircraft potentially cargo aircraft or even other applications that we are looking into and that we would have yet to develop.

Speaker 1: In any way, it's very versatile and scalable. It can be scaled up to larger form factors. And I strongly believe that it will not stand on its own. It will form the basis of a complete product family.

The way its very versatile and scalable it can be scaled up to larger form factors and I strongly believe it will not stand on its own it forms the basis of a complete product family. It also features a lot of ground breaking technologies that may.

Speaker 1: It also features a lot of groundbreaking technologies that may spin off beyond aerospace into other sectors and that we could own.

Spin of aerospace into other sectors and that we could own.

Speaker 1: Furthermore, and that drives me a lot, decarbonisation is one of the great challenges of our time. The aerospace industry needs to face that fact and I'm convinced that the Lilium jet is one critical step in aviation's shift to a sustainable and exciting future that is also accepted by society.

Furthermore.

And you'll note Deepak Decarbonization is one of the greatest challenges of our time aerospace industry needs to face that fact and <unk>.

Vince that lithium and the lithium that is one critical step in aviation shift to a sustainable and exciting future that has also accepted by society. The experience. We are building today and electric propulsion flight mechanics, and aerospace grade batteries will also contribute to transforming.

Speaker 1: The experience we are building today in electric propulsion, flight mechanics and aerospace-grade batteries will also contribute to transforming the world of aviation and potentially beyond.

The world of aviation and potentially beyond.

Speaker 1: I'm very much looking forward to steering the company through this next decisive phase. And I also have to say I really wish to thank our co-founder and our former CEO Daniel Wiegand for being such a great partner to me over the last couple of months and also what he has done way before. I'm excited!

I am very much looking forward to steering the company through this next decisive phase and they also have to say I really wish to thank our co founder and former CEO Daniel begun for being such a great partner to me over the last couple of months and also what is done way before I'm excited.

Speaker 1: that he is back to what he loves best, leading Liljum's future technology as Chief Engineer for Innovation and for future progress.

He is back to what he loves best leading Williams' future technology.

<unk> engineered for innovation and for future programs, while working with venue.

Speaker 1: While working with Daniel to chart the future, let me assure you that I will remain laser focused on operational excellence, on engineering execution and on cost discipline as we move ahead milestone by milestone towards our commercial launch.

To chart the future let me assure you that we remain laser focused on operational excellence on engineering execution and on cost discipline as we move ahead milestone by milestone towards our commercial launch.

Speaker 1: Let me now summarize some of the highlights we want to share with you in this call and it's five of them. First of all, we achieved the high-speed full transition flight on our technology demonstrator at a speed of about 100 knots.

Let me now summarize some of the highlights we want to share with you in this call and it's five of them first of all we achieved the highest speed full transition flight on our technology demonstrator at the speed of about 100 knots. Secondly on our battery ageing performance, we have conducted internal cycle tested.

Speaker 1: Secondly, on our battery aging performance, we have conducted internal cycle tests and they have indicated that we can achieve the targeted 800 or more cycles for launch. Additional testing is on the way with independent laboratory.

They have indicated that we can achieve the targeted 800 or more cycles for launch.

Testing is underway with independent laboratories third our aircraft industrialization is on track to start the assembly of the type conforming aircraft next year, we have signed up additional partnerships with tier one aerospace suppliers for US we have expanded our sales portfolio that is China.

Speaker 1: Third, our aircraft industrialization is on track to start assembly of the type conforming aircraft next year. We have signed up additional partnerships with tier 1 aerospace suppliers.

Speaker 1: Fourth, we have expanded our sales portfolio that is shy of 500 aircraft now and we are moving towards detailed terms and firm contract with pre-delivery payments next year. And last and fifth, we saw significant inbound interest in the premium private sales and took the decision to launch our limited edition including receipt of deposit.

500 aircraft now and we are moving towards detailed terms and from contract with pre delivery payments next year and lost in <unk>. We saw significant inbound interest in the premium private sales and took the decision to launch our limited edition, including receipt of deposits.

Speaker 1: To start now with the flight test campaign, our technology demonstrator that we call Phoenix, Phoenix2, recently achieved another important milestone because it performed a full transition from hover to wing-borne flight on both the main wing and the canard at about 100 knots. What is more illustrative than looking at a video and I'd like to invite you to watch the following video.

To start now with the flight test campaign.

Our technology demonstrator that we call Phoenix Phoenix, two recently achieved another important milestone because it performed the full transition from hover to win one flight on both the main cannot the main ring and the Cana at about 100 knots and.

What is more illustrative than looking at the video and I'd like to turn.

Right you too.

The following video please.

Speaker 2: MAX locations are on lower ground insert 1982 Next step is 100 feet.

That's helpful.

Okay.

Okay.

Okay.

Yes.

Hi, good morning.

Thank you.

100 <unk>.

Hum.

Yes.

Yes.

Alright.

Please proceed.

Speaker 3: Okay, speed is good, you can accelerate to 95 smoothly. 3, 2, 1, clear for steep climb. Stable. Standby. Clear to proceed. Dec abandoning their locks.

Okay.

Okay.

So.

Hopefully.

Two one.

Terrific.

Yes.

Stable standby.

Please proceed.

Yes.

Hello.

Speaker 1: Yeah, that's great pictures, isn't it? The fact that the canard and the wing transition smoothly is really a historic technical achievement, but it's more than that. It's also impressive that the transition on the canard and for sure also on the main wing

Yes.

<unk> picks us isn't it the fact that they cannot and do win transition smoothly is really historic technical achievement, but it's more than that it's also impressive that the transition onto cannot and for sure. The main wing.

Speaker 1: precisely happened where the computer model predicted it would be. And this is essential because our computer models predicted what the real world would be doing. And now this is validated by testing and validated models are a cornerstone to any development and efficient development, but also to an efficient certification program.

Precisely happened was a computer model predicted it would be and this is essentially because our computer models predicted what the real world would be doing.

Now this is validated by testing and validated models are a cornerstone to any development and efficient development, but also to inefficient certification program.

Speaker 1: More than that, in July this year we had visitors from media, we had from CNBC, we also had from Devel and others and they were able to witness first hand the Phoenix flight test in Spain.

And that in July this year, we had visitors from.

<unk> media, we had from CNBC. We also had some debate in us and they were able to witness firsthand the Phoenix slightest in Spain. So the feedback we received all over the place, but they were all impressed by the stable slides and the very noise signature very low noise signature.

Speaker 1: the feedback we received all over the place, what they were all impressed by the stable flight and the very low noise signature of this demonstrator aircraft. And I think you could hear this. The camera was just 30 meters away from the aircraft and this aircraft does not even feature the noise reduction measures that we will have on the serial aircraft.

Demand strength of aircraft financing you could hear this.

<unk> robust just 30 meters away from the aircraft and aircraft does not even feature so noise reduction measures that we will have understood the value of aircraft. So the flight test campaign will now be complemented soon by an additional flight demonstrator aircraft, which is called Phoenix suite and this will allow us to increase the pace and intensity of.

Speaker 1: So the flight test campaign will now be complemented soon by an additional flight test demonstrator aircraft, which is called Phoenix 3, and this will allow us to increase the pace and the intensity of the testing and of the learning.

The testing and of the lungs.

Speaker 1: Next point, with regards to the batteries, the test results on our prototype battery sales give us confidence that the batteries we plan to use inside our production aircraft at launch will deliver not only the required energy density, which is important for the range, but also the power density and also will have the required aging performance.

Next point.

With regards to the batteries the test resides on our prototype battery sales give us confidence that.

Better as we plan to use inside of a production aircraft at launch with.

Deliver not only the required.

Entity, which is important for the range, but also the power density and also.

We'll have to be quiet ageing performance as mentioned in previous updates from Q1. This year, our internal testing indicates that our chosen battery technology will meet the performance requirements of our large aircraft.

Speaker 1: As mentioned in previous updates from Q1 this year, our internal testing indicates that our chosen battery technology will meet the performance requirements of our launch.

Speaker 1: Internal testing on cell aging has indicated as well that the anticipated cycle life of more than 800 cycles with 80% capacity retention will be achieved. And we will be moving forward with validation of these internal results with independent laboratories in the near future.

Internal testing on cell aging has indicated as well as the anticipated cycles life of more than 800 cycles with 80% capacity retention will be achieved and we will be moving forward with validation of these internal results with independent laboratories in the near future.

Speaker 1: Our business projections for entry into service are based on the battery cell lifetime of about 800 cycles.

Our business projections for entry into service of based on the battery cell lifetime off about 800 cycles.

Speaker 1: Moreover, we continue to work with our technology providers to further improve self-performance and aging prior to the launch.

Moreover, we continue to work with our technology provide us to further improve site performance and aging prior to the launch.

Speaker 1: regarding the certification, our primary authority, the EASA, continues to actively support innovative electric air mobility.

Regarding the certification our primary authority as a continues to actively support innovative electric and mobility services in June of this year also published a serious of proposed rules for the operation of <unk> aircraft in cities and William has been actively supporting that.

Speaker 1: In June of this year the IASA published a series of proposed rules for the operation of eVTOL aircraft in cities and Lil Jung has been actively supporting the IASA as part of relevant working groups since already 2019.

The Asa as part of relevant working groups since already 2019. So now we are currently working towards the next major certification milestone, which is the agreement of the certification program, including some means of compliance which is equivalent to what you may know from the FAA.

Speaker 1: So now we are currently working towards the next major certification milestone, which is the agreement of the certification program, including the means of compliance, which is equivalent to what you may know from the FAA G2.

Speaker 1: Moving forward, we plan to provide this detailed overview of our progress towards certification with both the IASA and the EHS.

Moving forward, we plan to provides a detailed overview of our progress towards certification with both <unk>.

Speaker 1: In parallel with the type certification program, Lilium is working towards the design organizational Prügel, DUA, with the EASA. This DUA is a necessary prerequisite for any aerospace company to obtain a type certification of its aircraft. Lilium is now advancing towards its third DUA audit, which is scheduled for the end of this year and the fourth and final audit is targeted for the first half of next year.

In parallel with the type certification program lithium is working towards the design organization with Google.

With the Asa this deal.

<unk> is a necessary prerequisite for any aerospace company to obtain a type certification of the aircraft.

<unk> is now advancing towards third UA out at which is scheduled for the end of this year and the fourth and final audits is targeted for the first half of next year.

Speaker 1: EASAS granting of a DOA is a significant milestone for any aerospace company. It will demonstrate that Lilium has a capability to develop and certify commercial tech.

Asaf granting of.

A significant milestone for any aerospace company. It will demonstrate that <unk> has the capability to develop and certify commercial aircraft rigs.

Speaker 1: Regarding the industrialization, which is fully underway, our goal is to start the assembly of our first type conforming aircraft in 23 and achieve the first manned flight, so with a pilot on board, right from the beginning of a conforming aircraft in 24.

Regarding the industry innovation, which is fully underway. Our goal is to start the assembly of our first type conforming aircraft in 2003 and achieves the first manned flight so with a pilot on board right from the beginning of a conforming aircraft in 2004 on our path to these milestones we have begun placing orders for sub systems.

Speaker 1: On our path to these milestones, we have begun placing orders for subsystems and paths from leading aerospace suppliers.

Parts from leading aerospace suppliers in recent months as additional key suppliers have joined our aircraft program, which includes deal for the interior explicit four seats of <unk> for the energy management system.

Speaker 1: In recent months, additional key suppliers have joined our aircraft program, which includes steel for the interior, explicit for seats, astronauts for the energy management system, the MA group for the landing gear and L3 Harris for the voice recorder, just to name a few. These supplier partnerships are fundamental to establishing a dependable path towards certification and industrialization.

Group for the landing gear and elsewhere.

The voice recorder just to name a few these supplier partnerships are fundamental to establishing a dependable path towards certification industrialization.

Speaker 1: Lilium also for sure continues to protect its product development. As of the end of September this month, Lilium has filed a total of 69 patents, applications with European patent office, and a key focus of Lilium's innovation has been propulsion and energy systems which are core to our competitive advantage.

Lithium also functional continues to protect its product development as of the end of September . This month's lithium has filed a total of 69 patent applications with European patent office and a key focus of Liam's innovation has been propulsion.

Systems, which are core to our competitive advantage. In addition, lithium continues its patent extension policy filing patent applications.

Speaker 1: In addition, Lilium continues its patent extension policy, filing patent applications in other states outside the EPO such as the US and also China. I will now hand over to Jeff for the financials. Jeff, please.

Other states outsides Epo, such as the U S and for sure also China.

I will now hand over to Jeff for the financial stress. Please.

Thank you crash.

Speaker 4: As our aircraft development program ramps up, we are maintaining our strict budgetary control. The total

As our aircraft development program ramps up we are maintaining our strict budgetary control the cost the total cash spend of <unk>.

Speaker 4: 63 million euros in Q2 2022 was in line with the previous quarter with the spend of 60 million.

63 million euros in Q2 2022 was in line with the previous quarter with the spend of $60 million looking.

Speaker 4: Looking ahead, we are closely monitoring the effects of the conflict in Europe , inflation, financial markets, and general economic factors on our business and plan.

Looking ahead, we are closely monitoring the effects of the conflict in Europe inflation financial markets and general economic factors on our business and planning in advance of our development program through the detailed design and industrialization phase is expected to lead to increased supplier contracting.

Speaker 4: The advance of our development program through the detailed design and industrialization phase is expected to lead to increased supplier contracting activity from the second half of 2022. We are working to offset the slight rise in related cash spending through active budgetary controls, including headcount control. We expect a YT

Activity from the second half of 2022, we are working to offset the slight rise and related cash spending through active budgetary controls, including head count control. We expect full year 2022, total cash spend to be no more than 250 million euros.

Speaker 4: total cash spend to be no more than 250 million euros. Our liquidity as of June 30th, 2022, stood at 229 million.

Our liquidity as of June 32022.

229 million euros. Additionally, the 75 million equity line of credit facility established with humans doing capital became effective on June 24th 2022.

Speaker 4: Additionally, the $75 million equity line of credit facility established with tomb and stone capital became effective on June 24, 2022.

Speaker 4: Going forward, we've chosen to use euros as the reporting currency for our quarterly shareholding letters and business updates. Our IFRS

Going forward, we have chosen to use euros as the reporting currency for our quarterly shareholding letters to business updates our IRS financial statements are reported in euros and the vast majority of our liabilities and costs are euro denominated let me now hand, it over to Sebastian Brown Senior Vice.

Speaker 4: are reported in euros and the vast majority of our liabilities and costs are euro denominated. Let me now hand it over to Sebastian Burrell, Senior Vice President Commercial for an update on our aircraft sales program. Over to you, Sebastian.

From a commercial for an update on our aircraft sales program over to you Shaun.

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Speaker 5: Sorry for the delay. I think I have had some issues on the internet. Hopefully you can hear me.

Sorry for the delay as they have been.

Automation and Internet of hopefully you can hear me.

Speaker 5: Okay, so we can hear you. Thank you very much. Sorry about this and thank you, Jeff. And good afternoon, good morning, everyone. Hopefully, you can hear me well. So, since our last call, Lilium has made significant progress in delivering its commercial plan. First of all, we have signed a memorandum of understanding agreements in the premium segment for a total of 113 aircraft in key locations with high demand, including GloVer all latest announcements.

Okay.

<unk>.

Thank you very much.

Sorry probe about Nathan Thank you Jack and good afternoon, and good morning, everyone hope what he can handle well.

So since our last call lithium has made significant progress in delivering his commercial plan.

First of all we have find memorandum of understanding agreement in the premium segment. Our total of 113 aircraft in key location with high demand, including go there our latest announcement.

Speaker 5: This brings the overall number of lilliamton under MOU to 483.

This brings the overall number of Linkedin under Mou to 483.

Speaker 5: We're also launching a sales campaign for private individuals taking pre-orders as early as 2022.

It will also allow hang a sales campaign for private individuals taking preorders as early as 2022.

Speaker 5: As for commercial operators, Lydian plans to begin signing firm orders in 2023 with the target of locking in meaningful

As for commercial operators lithium plans to begin signing promoters in 'twenty three with the target of locking in meaningful department.

Speaker 5: As outlined before, as a first phase and for our first aircraft deliveries, we're addressing the premium, general and business addition market. This includes shelter operators, fractional owners and private individuals.

As outlined before as a first phase and how our first aircraft deliveries, we're addressing the premium channel and didn't have Asian market. This includes charter operators fractional owners and private individuals.

Speaker 5: In the second phase, we plan to roll out our six passenger support configuration to address demand for regional scheduled services.

Second phase, we plan to rollout our six passenger shuttle configuration Trent ramp demand original scheduled services.

Speaker 5: We continue to be excited by Florida as well as several European regions for both the premium segment and the regional schedule service. We actually strongly believe that both of them will complement the

We continue to be excited by Florida, as well as several European regions for both the premium segment and the regional scheduled service actually strongly believe as both of them will complement each other.

Speaker 5: Going into more details on the Premium sector, this can address three segments. Premium shuttle, usually replacing helicopters.

Going into more details on the premium sector lithium are addressing three title premiums.

Premium channel, usually replacing helicopters.

Speaker 5: Charter services infractional ownership and private sales. And to respond to the high demand for the lithium jet among high net worth individuals, IBM has decided to create a limited edition of the lithium-to-the-

Health care services, and a partial ownership and private sale and to respond to the high demand. Although they haven't had among high net worth individuals lithium has decided to create a limited edition of the medium term.

Speaker 5: The limit tends to offer a tailored cabin and dedicated premium service on attractive financial terms.

Denim intends to offer a tailored cabin and dedicated premium service on attractive financial terms.

Speaker 5: The limited edition will be unveiled later this year when we will be taking orders in the past...

Limited edition will be unveiled later this year, we will be taking orders and deposits.

Speaker 5: The lithium jet is proving to be highly attractive in this market thanks to its dirty jet architecture, its spacious cabin, and the ASSA safety standards requiring 10-9 safety limits.

Lithium that is proving to be highly attractive in this market. Thanks to its their future architecture is spaces, Kevin and D. As a safety standards, requiring 10 to the minus nine safety label.

Speaker 5: the same as for large commercial aircraft like the A320.

San Antonio commercial aircraft language is behind it.

Speaker 5: So with Brazil, Florida, southern France, southern Spain, along with Norway, Benelux, Germany and northern Italy, Libya is clearly targeting prime location with high and proven demand for premium air mobility.

Who is Brazil, Florida, Southern France, South of Spain, along with normal and Benelux, Germany, and northern Italy, lithium is clearly targeting prime location with a high and proven demand of premium am ability.

Speaker 5: where we have identified strong commercial partners who wish to innovate and for whom sustainability is a stated priority.

And where we have identified strong commercial partners, who wish to innovate in our homes as daily is a state environment.

Speaker 5: Looking into more details of a recently signed MOU, the BRISA group, the leader in global digital solutions with a fleet over 220 headquarters, these are all solutions tools that will develop business.

Looking into more details of our recently signed Mou. The Bristow group. This literary in global digital solution with a fleet of over 220 helicopters selected the lithium tend to develop its eventual business might bring.

Speaker 5: Bristol also intends to cooperate in maintenance for the lithium-fry the net...

<unk> also enhanced to cooperate maintenance on the lithium probably the network.

Speaker 5: In addition, we can find agreements with healthy culture airlines in southern Spain, the ASF group in the Benelux, and AAP in Trinidad.

In addition in final agreements with healthy counter airlines in southern Spain, the asset group in the Panamax and AAP MTV.

Speaker 5: Also this month, GloVer, an innovative business operator based in Austria, signed an MOU with Lilium with the intention to purchase 12 aircraft to operate in northern Italy and the French Navy.

Also this loan grow there and innovative visited operator based in Austria signed an Mou with lithium with intention to purchase 12 IHOP to operate in northern Italy and criteria.

Speaker 5: Again, France, Northern Italy, Southern Spain, Scandinavia, Benelux, those are key markets with high demand for sustainable premium on demand.

Again, France, Northern Italy, Spain, Scandinavia, Benelux and all our key markets with high demand for sustainable premium on demand.

Speaker 5: The innovative nature of our partners along with the selected locations would be key to the commercial success.

The innovative nature of our partners along with our selected locations with Ethereum commercial success back to your car.

Okay.

Speaker 1: Thank you, Zep. So to sum up, at this important phase in our company development, we continue to focus our energies on industrializing and certifying a robust aircraft at the highest safety standards. We believe that we have a world-class product that will truly excite and delight our customers. Furthermore, the successful high-speed transition flights have demonstrated once more the LiliumJet's sound flight mechanics and its ability to fascinate.

Thank you Sam.

So to sum up at this important phase in our company development, we continued to focus our energies on industrializing and certifying a robust aircraft at the highest safety standards. We believe that we have a world class product that we're truly excited and delight our customers.

Furthermore to successful high speed transition flights have demonstrated once more the lithium that sound flight mechanics, and its ability to fascinate in the months ahead, we will keep you posted on the next achievements as our organization gathers momentum in particular regarding receiving our design organization of approval.

Speaker 1: In the months ahead, we will keep you posted on the next achievements as our organization gathers momentum in particular regarding receiving our design organizational approval, agreement on our certification program and the means of compliance, binding commercial agreements with deposits in 23 and received in the first half of next year of the first components and the start of the assembly of our type-conforming act.

The agreement on our certification program and the means of compliance.

Mining committal commercial agreements with deposits and 23 and received in the first half of next year of the first components and the start of the assembly of our type conforming aircraft and now let me hand, you over again to Jeff who will open the floor for your questions Jeff. Please.

Speaker 1: And now let me hand you over again to Jeff, who will open the floor for your questions. Jeff, please. Thank you, Klaus. So now... Jeff, what you're doing there, system's why he's on the pizza Songs.

Thank you Klas. So now we have some time to take your questions.

Speaker 4: As a reminder, to ask a question during the session, please press star 11 on your telephone.

As a reminder to ask a question during recession. Please press star one one on your telephone.

Speaker 4: If you're watching the webcast in parallel, please mute the sound on your laptop while you're asking your question. We will now begin the Q&A.

Youre watching the webcast in parallel please mute the sound on your laptop, while you're asking your question. We will now begin the Q&A session.

Speaker 6: Thank you very much. We will now take your first question. Please stand by.

Thank you very much.

We'll now take your first question please standby.

Speaker 6: And your first question comes from the line of Alexander Potter from Piper Santa. Please go ahead. Your line is open. Excellent. Thanks very much.

And your first question comes from the line of Alexander Potter from Piper Sandler. Please go ahead. Your line is open.

Excellent thanks very much.

So maybe I'll start with the boring question.

Speaker 7: boring question on the balance sheet for you, Jeff.

On the balance sheet for you Jeff.

So.

Speaker 7: I guess knowing everything that you know now about your cash balance, cash spending, CAPEX.

I guess, knowing everything that you know now about your cash balance cash spending capex.

Speaker 7: PDPs, I guess this equity line of credit. How long do you think it'll be before you need to start thinking seriously about other ways to bolster the balance sheet and what type of capital infusions do you think might be available to you? I'm thinking specifically about debt. Is it possible to use

PDP is I guess the equity line of credit how long do you think it'll be before you need to start thinking seriously about other ways to bolster the balance sheet and what type of capital infusions.

Do you think might be available to you I'm thinking specifically about that is it possible to use.

Speaker 7: visibility on your orders to support debt financing of some kind. Any commentary on the balance sheet would be helpful.

Visibility on your orders to support debt financing of some kind I guess any any commentary on the balance sheet would be would be helpful.

Speaker 4: Great question, Alex.

Great Great question Alex.

Hi.

I think the first thing.

Speaker 4: in terms of securing financing is to make sure that you're executing. I think that's closing the preliminary design process.

In terms of securing financing is to make sure that you're executing so I think that's closing.

From the preliminary design process, demonstrating the battery demonstrating the highest fee transaction and class joining was really critical to the success and the confidence of our existing and future financing partners I think the shift to.

Speaker 4: demonstrating the battery, demonstrating the high speed transition, and class joining was really critical to the success and the confidence of our existing and future financing partners. I think the share

Speaker 4: to premium.

Premium and focusing on sales also leads to deposits and.

Speaker 4: and focusing on sales also leads to deposits.

Speaker 4: And I think with deposits and cash flows, it does open up specialized lending opportunities. So we do anticipate that to be part of the mix going forward, Alex. Obviously, the markets are quite volatile today, but we've been fortunate to have built the buck with the kind of the...

And I think with deposits and cash flows.

Does open up specialized lending opportunities. So we do anticipate that to be part of the mix.

Going forward, Alex obviously the markets are quite.

Volatile today, but we've been fortunate to have.

Built the bulk with the kind of longs strategics.

Speaker 4: and we're very confident between the PVPs, between future potential at that, and with equity opportunities, including the ELOC, that we'll be able to extend the cash run.

And we're very confident between the Pvp us.

I mean future potential of that and with equity opportunities, including the HELOC that we'll be able to extend the cash runway.

Speaker 7: Okay, great. That's super helpful. I guess maybe on PDPs, I am interested in hearing, it sounds like in the shareholder letter, it seems like you have a relatively high degree of confidence. There will be at least some PDPs hitting the balance sheet in 2023. I guess any commentary you can disclose there about how those discussions are progressing and I guess you have to have multiple different PDP related discussions and negotiations with all of your different

Okay, Great. That's that's super helpful. I guess, maybe on PDP. They I am interested in hearing it sounds like in the shareholder letter. It seems like you had a.

Relatively high degree of confidence there'll be at least some PDP is hitting the.

The balance sheet in 2023 at I guess any any commentary you can.

This cloud there about how those discussions are progressing and I guess do you have to have multiple different PDP related discussions and negotiations with all of your different.

Speaker 7: customers or do you end up getting to one sort of framework agreement that applies to everyone? Anything on PDPs would also be helpful.

Customers or do you end up getting to one sort of framework agreement that applies to everyone at anything on PDP. It would also be helpful.

Sam you want to take that one.

Speaker 5: Absolutely, thank you for the question. We are progressing with our customer and each of our MOU customers into the details of the contractual next step, which will trigger the policy.

Absolutely. Thank you for the question. We obviously, we are progressing with a customer and he shall our mou customers into the details on the next step contractual next act, which would trigger those deposits and.

Speaker 5: And what's important for us is to be able to deliver to where we commit and that's what we're working on with them. We're working tremendous progress right now to further understand their requirements, their concept of operation, and what it will take to get there. So yes, we are absolutely confident we can get the positive and we are in the process with production.

What's important for us is to be able to deliver.

Deliver and see where we come in and that's what we're working on with them and we're working tremendous progress right now to further understand their requirements. The concept of operation and why it will take to get there. So yes. We are absolutely confident we can get deposits.

And we are in the process, we pretty much everyone.

Speaker 7: OK, perfect. Then maybe one last one, I'll sneak in here for cloud sites. I mean, you've been now on board for a couple months.

Okay, Perfect and then maybe one last one I'll sneak in here for cloud side I mean, you've been now on board for a couple of months.

Speaker 7: learning about the environment, the technology, the team. I suppose out of all of that, maybe what are your first impressions or the things that surprised you, maybe some of the unexpected challenges? What has been your take after joining Lilian here for the last several weeks or couple months?

Learning about the environment the technology of the team I its about the out of all of that and maybe what are your first impressions are the things that surprised you maybe some of the unexpected challenges what are what has been your take after joining lillian careful at several weeks or couple of months.

Speaker 1: Yes, thanks Alex and good to talk to you again. It's a tricky question. So I have to say before I launched, I had the insight into Lilium, into the product, its progress like everybody else from outside because Lilium was very rigorous in respecting rules and I was basically working for competitors. So I knew a bit about the plane and now that I'm here since eight weeks, I wouldn't pretend I know everything, but I think I learned a lot.

Yes, Thanks, Alex and good to talk to you again is a tricky question. So.

I have to say before I launched I had the insight into lithium into the product its progress like everybody else from outside because Lillian was very rigorous in respecting rules.

There was basically working for competitors so.

I I knew a bit about the plane and now that I'm here since eight weeks I wouldn't pretend to know everything, but I think I learned a lot.

Speaker 1: And my, I would say, positive take on the architecture, on the versatility, the flexibility, the performance.

And my I would say positive take on the architecture.

The versatility the flexibilities of performance.

Speaker 1: has really been confirmed. So in fact, now I'm an insider and I have to say, I did not make any detection that I didn't want to make.

Has has really been confirmed so in fact, I know I'm, an insider and I have to say that unmake any detection that I didn't want to make.

Speaker 1: Before joining the company, again, I knew what everybody knew. I found it fascinating, I found it meaningful.

Before joining the company again.

I knew what everybody knew I found it fascinating I found it meaningful.

Speaker 1: I was also strongly attracted by the quality of the board members because I knew some of them, I learned to know some of them.

I was also strongly attracted by the quality of the bought my must because I knew some of them have learned to know some of them and I have thought if this person's put their names out there work that that time their reputation on the table for this product it cannot be wrong. So.

Speaker 1: And I thought if these persons put their name, their work, their time, their reputation on the table for this product, it cannot be wrong. So now knowing it much better, not knowing everything, I would say no bad surprise at all, only good surprises.

Now knowing it much better not knowing everything I would say no bad surprise at all only good surprises and I know from my past when when you have what do you say Oh, well bond product you have a bright future you will have stumbling stones to overcome.

Speaker 1: And I know from my past when you have what we say a well-born product.

Speaker 1: You have a bright future, you will have stumbling stones to overcome. But when the product is laid out well, then it will just work out. And I'm pretty sure and I'm convinced that the product is rightly positioned, the architecture is superior. And now it's up to us to make it successful. It's not an easy going, that's clear, because we need to go over the hurdle of certification, industrialization and the like.

But when the product is laid out well.

It will just work out and I'm pretty sure and I'm convinced that the product is rightly positioned the IC picture is superior and now it's up to us to make it successful it's not an easy going that's clear because we need to go over the hurdle of certification industrialization and the likes.

Speaker 1: but I'm convinced this is really the right one and I'm convinced it's the best one in its class. Great. All right. Thanks very much, guys.

But I'm convinced this is really the white the right one and I'm convinced that the best one in its class.

Great Alright, thanks, very much guys.

Thank you.

We will now go to our next question.

Please standby.

Speaker 6: And your next question comes from the line of Colin Rush from Oppenheimer. Please go ahead, your line is open.

And your next question comes from the line of Colin Rusch from Oppenheimer. Please go ahead. Your line is open.

Speaker 8: Thanks so much guys. You know, could you talk about any surprises that are coming up in the certification process? It looks like you've made some great progress here in terms of moving things down the road. You know, there are things, you know, kind of creeping up the, the are, you know, surprising you. We're going to create some delays anything that we should be tracking in and around that process.

Thanks, so much guys.

Could you talk about any surprises that are coming up in the certification process. It looks like you've made some great progress here in terms of moving things down the road.

Things kind.

Kind of creeping up.

Our.

Surprising you or that creates delays anything that we should be tracking in and around that process.

Cloud, but maybe I'll take it.

Speaker 1: Yeah, thanks Colin, it's a fair question and I tend to say you never know before you're done.

Yeah. Thanks, Thanks, Colin it's a fair question and I tend to say you never know before you're done.

Speaker 1: What do we do to de-risk the whole thing? The first thing I think which is unique to Lilium is that we have right from the beginning designed against the highest possible certification standards. And the EASA who is really seeing this as a strategic product has rightly imposed same safety levels like you have for any other big commercial airline aircraft like an A320 for example.

What do we do to Derisk the whole thing.

First thing I think which is unique to lithium is that we have right from the beginning of design against the highest possible certification standards and the Asa was really seeing this as a strategic product has rightly imposed same safety levels like you have for any of our big commercial airliner aircraft like <unk> hundred <unk>.

For example, so we have designed against it. So we have been prepared for the highest hurdle to jump over.

Speaker 1: So we have designed against it, so we have been prepared for the highest hurdle to jump over. So this is good from the beginning, so we will not have bad surprises that the ambition is further elevated and then we have to run and design after, we have to make late changes.

So this is good from the beginning so we've been not half bad surprises that the ambition is further elevated and then we have to run the design. After we have to make late changes.

Speaker 1: Second point of the risking is that since quite a while, we have stability on our certification baseline because the requirement, or the set of requirement has been spelled out by the AASA.

Point of Derisking is that since quite a while.

We have further stability on our certification baseline because the requirement is a set of requirements has been spelled out by the us up.

Speaker 1: FAA are still making up their mind, but they started from lower and it looks like they are converging to a higher level Close to what EASA wants, which doesn't give us any extra challenge because we have already started this way.

Are still making up their mind, but they started from lower and it looks like they are converging to a higher level close to what the Asa once which doesn't give us any extra challenge because we have already started this way.

Speaker 1: That is also good news to us. We are now 75% done and you will see it in our shareholder letter. On agreement on the means of compliance means how do we demonstrate that we can be compliant to those requirements and we will be done with it in the first quarter of next year, which takes away another chunk of risk.

It is also good news to US we are now 75% done and you would see it in our shareholder letter on agreement on the means of compliance means how do we demonstrate that we can be compliant with those requirements.

And we will be done with it in the first quarter of next year, which takes away another chunk of risk.

Speaker 1: And for sure, we have been doing a lot. So when you look at this fabulous slide test on the video, which

And who was first of all what we we have been doing a lot. So when you looked at this a fabulous flight test on the video.

Speaker 1: first of all demonstrate the aircraft is doing what it is supposed to do and honestly even doing a little bit better

Which first of all demonstrate the aircraft is doing what it is supposed to do and honestly, even doing a little bit better.

Speaker 1: And the predictability we have on the behavior of the aircraft is so high that we know what we are designing now into the conforming aircraft, the Pegasus, is really predictable and is not supposed to give us a headache or bad surprise later on.

And as a predictability we have on the behavior of the aircraft is so high.

That we know what we're designing now and because of the conforming aircraft to peg as US is really predictable. It is not supposed to give us a headache or bad surprise later on and also when you can predict analytically a lot on what the aircraft is doing it will help easings of certification program. So if we were not able to do it.

Speaker 1: And also when you can predict analytically a lot on what the aircraft is doing, it will help easing the certification program.

Speaker 1: If we were not able to do it, we would have to physically demonstrate many more things by real slide tests. This for sure would drive cost, lead time, and any sort of efforts that we don't like.

Would have to physically demonstrate many more things.

By real flight test and risk are sure what's drive cost would drive lead time will drive any sorts of efforts that we don't like.

Speaker 1: Last bit, yes, it's all novel, it's new technology, it's highly innovative and it's the name of the game that this can come with the prices.

Last bid, yes, it's all model.

It's new technology, it's highly innovative and.

It's the name of the game that this can come with surprises and here I would say the last line of defense is to anticipate as much as can be and to be very reactive in terms of when you have to be reactive.

Speaker 1: And here I would say the last line of defense is to anticipate as much as can be and to be very reactive in terms of when you have to be reactive.

Speaker 1: to have the right skills, the right team to be able to react to it. And this is what we are also working on and we are not using our Phoenix Flight Test program today for technical learnings, for improving our models. We are also starting to use the Phoenix Flight Test program to train our organization for the flight test that comes at a much larger scale with the Pegasus.

To have the right skills the right team.

To be able to react to it and this is what we are also working on and we are not using our Phoenix lightest Cogan today for technical learnings for improving our models. We are also starting to use the Phoenix slightest program.

Train our organization for the flight test that comes at a much larger scale with a pick up those aircrafts.

Speaker 8: Excellent. And then on the battery technology, can you speak to not only this qualification and testing of the cells, but also the manufacturing process? Certainly looking at how that process goes and looking at yields and consistency of products coming off the line. I'd like to understand how mature that process is around that qualification of manufacturing.

Excellent.

And then on the battery technology.

Can you speak to not only just qualification and testing of the cells, but also the manufacturing process certainly in looking at.

How that process goes and I'm looking at yields and consistency of products coming off the line I'd like to understand kind of how mature that that processes around that qualification of manufacturing facilities.

Speaker 1: Yeah, it's new technology in terms of chemistry.

Yes.

It's new technology in terms of chemistry, it's.

Speaker 1: I would say to a certain extent also new technology in terms of the manufacturing process of the batteries.

I would say to a certain extent also new technology in terms of the manufacturing process of the batteries.

Speaker 1: And we are working with Customself and the good thing is that Customself is fully engaged.

And we are working with custom said and the good thing is the customer says fully engaged.

Speaker 1: Custom cells also, as you may know, at the forefront of automotive batteries.

Some say it's also as you may know at the forefront of automotive batteries, because we will have to put users at scale and they are exactly in this arena and.

Speaker 1: because we will have to produce this at scale and they are exactly in this arena. And automotive, you know, is high yields, it's high volumes, but it's also low cost.

In automotive you know as high yields.

Yields it's high volumes, but it's also low cost.

Speaker 1: So we have fixed and firm agreements with them through the complete next year. So we know exactly what amount of battery volume we are going to need.

So we have fixed and firm agreements with them.

Through the complete next year, so we know exactly.

What amount of battery volume, we are going to need.

Speaker 1: And we have worked out a plan with them, which is for sure how do they assemble. And we still have opportunities, different opportunities to optimize, also to have enough raw material available, which we have also protected.

We have worked out a plan with them.

<unk> is for sure how do they assemble.

And we still have opportunities different opportunities to optimize also to have enough raw material available, which we are also protected so.

Speaker 1: So, throughout the complete next year 23, I would say we are in a good shape. So, we need to get the cells, we have a lot of cells, we need to test them, we need to put them on the plane, we need to see how they behave.

Throughout the complete next year 'twenty three I would say we are in a good shape.

So we need to get the cells. We have a lot of says we need to test that we need to put them on the plane, we need to see how they behave we need to continue our laboratory testing and in parallel already next year, we have to start working really at the higher ramp up that we need to achieve but also managing the cost position and.

Speaker 1: We need to continue our laboratory testing and in parallel already next year we have to start working really at the high ramp up that we need to achieve, but also managing the cost position and having a supplier that at the same time is engaged in the automotive arena with support from the automotive arena is really essential.

And having a supplier that at the same time is engaged in the automotive arena with support from the automotive Arena is really essentially.

Last bid.

Speaker 1: We also want to make sure that we have several sources available. For sure our, I would say, biggest part of effort and energy today goes into working with Zenlabs for the technology and custom sales and also with other companies like Advanced Materials or Livent where we have secured capacities but potentially also with other battery suppliers to further de-risk our technology.

We also want to make sure that we have several sources available for sure. Our I would say biggest part of effort and energy today goes into.

Working with Zen laps for the technology and custom says and also with other companies like like advanced materials all event would.

Where we have secured capacities, but potentially also with other battery suppliers too.

To further derisk our technology.

Speaker 8: Thanks so much. I'd love to sneak one last one in. Given the strategic significance of the technology in some, and where you guys sit in the supply chain in terms of funding, are there opportunities for you guys either in the US or Europe , specifically in Germany, around substantial grants that could help move the project along that would supplement it all?

Thanks, so much.

Sneak one last one and then just given the strategic significance of the technology.

And some in where you guys sit in the supply chain.

A Honda and now are there opportunities for you guys here in the U S or Europe , specifically in Germany around.

Substantial graphs that could help move the project along.

And that would supplement our chain.

Speaker 4: Yeah, great question, Colin. We actually...

Yes, great question Collyn, we actually.

Speaker 4: employed a few people from the aerospace industry who have significant experience in both grants and loans.

Have employed.

A few people from aerospace industry, who have significant experience both grants and loans.

Speaker 4: And recently applied for a fairly significant government loan. So that's something that's been on our radar for a while. Um, it's difficult to predict timing and probability of those, which is why we've discussed those last, but we have multiple very experienced people working on that. And we see that as. A very promising non-dilutive piece of the mix.

And recently applied for a fairly significant government loan. So that's something that's been on our radar for a while.

It's difficult to predict timing and probability of those which is why we discuss those loss, but we have multiple.

Very experienced people working on that and we see that as.

A very promising non dilutive piece of the mix.

Speaker 4: Going forward, hopefully there's more. More to discuss on in the future of those, but those go. Kind of at their own pace. Perfect thanks so much.

For its hopefully there's more.

More to discuss on here in the future of those but goes go.

And are at their own pace.

Perfect. Thanks, so much.

Thank you.

We will now go to our next question.

Please standby.

Speaker 6: And your next question comes from the line of Bill Peterson from J.P. Morgan. Please go ahead, your line is open.

And your next question comes from the line of Bill Peterson from JP Morgan. Please go ahead. Your line is open.

Speaker 9: Yeah, hi, good afternoon or good morning. If you're in us, Jeff, I wanted to talk about certification and takes for the visual you provided here. You mentioned 28% still yet to be agreed for means of compliance.

Yeah, Hi, good afternoon, or good morning, if youre in the U S. Yet.

Wanted to talk about certification and extra the visual you provided here.

You mentioned, 28% still yet to be agreed for means of compliance of <unk>.

Speaker 9: A 60% on the certification plans, can you give us a feel for what what is agreed and what is, I guess, remains to be agreed for a also and then. I guess more important, are you still competent in 2025 certification timeline? And then how much delay would we expect with maybe a, you know, given this graphic, it looks like there's still. Many things yet to be still agreed with the FAA.

60% on the certification plant.

Can you give us a feel for what what is agreed and what is I guess remains to be agreed for a Asa and then I guess more importantly are you still confident in a 2025 certification timeline and then how much delay would we expect with maybe FAA.

Given this graphic of it looks like there is still many things yet to be agreed with the FAA.

Oscar I'll take that one.

Speaker 1: Yeah, sure. Thanks, Bill. So difficult for me to say what is in this last quarter of means of compliance, what we have been doing and we did the same, by the way, for the certification requirements. We worked...

Yeah, Yeah sure. Thanks, Bill so.

Difficult for me to say what is in this last quarter of means of compliance what we have been doing and we did the same by the way for the certification requirements. We worked basically by a priority. So we have categorized the ones, which are most important I would say we are done with those.

Speaker 1: basically by priority. So we have categorized the ones which are most important. I would say we are done with those.

Speaker 1: And I don't want to play it down to say the last 25 or 28 percent, that's the easier bit of it. I cannot tell you precisely item by item, and here we talk hundreds by the way, what they are. But I would say it's a matter of keeping the momentum and rigor that we have with the EASA to just get them done as we want to get them done.

And I don't want to play it down because there's the last 25 or 28% that the easier bit of it.

Cannot tell you precisely item by item and he would talk hundreds by the way what they are but.

I would say, it's a matter of keeping the momentum and rigor that we have with the Asa to just get them done as we wanted to get them done and I need to say I'm really happy with the collaboration because.

Speaker 1: And I need to say I'm really happy with the collaboration because...

Speaker 1: EASA also sees this as a strategic target and they want to develop the industry because they are also after ESG and decarbonization. So with the engagement they are showing whilst they put the hurdle extremely high with 10 to the minus 9, on the other side they are as supportive as they put the hurdle high.

The Asa also sees this as a strategic target and they want to develop the industry. Because they are also after ESG and decarbonization.

No.

Engagement they are showing whilst they put the hurdle extremely high it was 10 to the minus nine on the other side that S supportive as they put the hurdle.

Speaker 1: Regarding the FAA, we have a lot of trilateral meetings so that we are conducting with both authorities at the same time. And you may know from the legacy industry, it's normal that you have a lead authority running the first certification and that the authorities coming after will close quite soon after.

Regarding the FAA, we have lot of trilateral meetings. So that we are conducting with both authorities at the same time and you may know from the legacy industry. It's normal that you have a lead authority running the first certification and is as the authorities coming after.

Close quite soon after.

Speaker 1: regarding question number three, confidence with 25.

Regarding our question numbers, we confidence was 25.

Speaker 1: Yes, we are confident with 25, but we only know what we know today. So, when you see what we have put in our plan, which is basically, so we have done the PDR, we are striving for CDR by mid of next year, we see supplies coming in, so it's some very visible milestones on start of production of the plane. We have given ourselves about one year to assemble the plane, which is a rather small plane, so you may say why does it take so long.

Yes, we are confident was 25, but.

But we only know what we know today, so when you see.

What we have put in our plan, which is basically so we have done the PDR. We are striving plus edr by mid of next year, we see supplies coming in so it's some very visible milestones on start of production of the plane. We have given our sales about one year to assemble the plane, which is a rather small plane so humor.

I would say why does it take so long it takes so long because we want to do it thoroughly and with rigor we need to put all the flight test implemented instrumentation, we need to conduct a lot of ground test before we go into flight, but when you are familiar with aerospace development cycles. You would say this is nothing which is outrageous.

Speaker 1: It takes so long because we want to do it thoroughly and with rigor. We need to put all the flight test implementation. We need to conduct a lot of ground tests before we go into flight.

Speaker 1: But when you are familiar with aerospace development cycles, you would say this is nothing which is outrageous. And then we have one and a half years to go to certification. And again here, the more we can de-risk before, the better our models are to predict.

<unk>.

Then we have for one and a half years to go to certification.

And again here the more we can derisk it for the better our models to predict is the closer we are collaborating with US is the more we also anticipate potential issues more we will be in a position to deliver to their schedule. It is possible.

Speaker 1: The closer we are collaborating with the EASA, the more we also anticipate potential issues, the more we will be in the position to deliver to the schedule. It is possible. Will we know what it is? We will know, as I said, you know what you have done when it's done. But as we speak, this is the plan we have put forward because this is the best one we believe in. And it has challenges, but it also has margins inside.

Will we know what it is we will know as I said you know what you have done when it's done but as we speak. This is a plan we have put forward. Because this is the best one we believe in it it has challenges but it also has margins inside because if you if you set up a.

Speaker 1: If you set up a schedule that doesn't have any margin, it's condemned to fail already from the beginning.

A schedule that doesn't have any margin it's condemned to fail already from the beginning and we have put also margins into the schedule.

Speaker 9: Yeah, thanks for that. Thanks for that color class. Maybe this one might be for you to try to put a finer point on on the battery question is the additional testing by independent labs is this part of. The certification requirements, or is this really more on your side to gain additional confidence? I believe the aging test that 800 cycles is consistent with prior goals, but I guess what other performance or reliable right? Reliability testing fell to sell or pack to pack.

Yes, thanks for that thanks for that color class, maybe this one might be for you to try to put a finer point on the battery question.

Is the additional testing by independent labs as part of the certification requirements or is this really more on your side to gain additional confidence I believe the aging test and 800 cycles is consistent with prior goals, but I guess what are the performance of reliable reliability testing cell the cell or Pac attack.

Speaker 9: What other tests would you say is required at this point to gain additional confidence?

What other tests or would you say is required at this point the gain additional contracts.

Speaker 1: So, first question, is it part of certification? You know, the authorities care for one thing.

Yeah. So.

First question is it part of certification no the authorities care for one thing.

Speaker 1: which is safety and if the battery for sure to in order to fly safe

Would just safety and if the battery for sure two in order to fly a safe.

Speaker 1: You must have enough margin when the state of charge, which is normally by the end of the flight, is reduced that you can still safely land. So there is performance parameters that we need to demonstrate to the authorities which are paying into the safety of the aircraft.

You must have enough margin when the state of chart, which is normally by the end of the flight is.

The reduced <unk> that you can do safely land towards the performance parameters.

That we need to demonstrate to the authorities, which are paying into the safety of the aircraft when you look at.

Speaker 1: When you look at, and for sure the capacity of the battery is largely paying into the economies of the aircraft because it determines the range. Do we need to demonstrate the range to the authorities? For sure yes, because the results we have to foresee are taken off the range. So yes, it pays into safety, so the authorities take interest.

And for sure the capacity of the battery is largely paying into the economies of the aircraft because it determines the range do we need to demonstrate a range to the authorities for sure yes because.

Reserves, we have to earn to foresee a taken of the range. So yes, it's pace into safety, Saudi authorities take interest.

Speaker 1: in performance and in capacity, and we have to demonstrate it by appropriate means. So we can do it with internal tests, and we will have to do it anyway with internal tests.

In performance and in capacity.

We have two demonstrated by appropriate means so we can do it was internal tests and we will have to do it anyway was internal tests.

Speaker 1: It will also become part of the performance management of the aircraft because we will certify it based on the actual battery performance.

It will also be cards to become part of the performance management of the aircraft because we will certify it based on the actual battery performance.

Speaker 1: And the last point on cycle life, I would say the authorities won't care a lot. They will care at least much less. It's much more a question of economies of the aircraft and for sure we pay a lot of attention to it.

And the last point on cycle life, I would say Z or sovereignties.

Won't care a lot they will get is much less it's much more a question of economies.

The cough and partial we pay a lot of attention to it.

Speaker 1: The fact that we are using external laboratories has different reasons. It's not that we think nobody is going to trust us.

Fact is that we are using external lebel has always has different reasons it.

It's not that we think nobody is going to trust us because I believe this is a very trustworthy company.

Speaker 1: because I believe this is a very trustworthy company.

Speaker 1: and we do it, but also to say let's be fair, let's put the cards on the table, let's put independent specialists and let them witness what we are doing.

And we do it but also to say, let's let's put let's say, let's put the cut on the table, let's put independent specialists and let we'll let them witness what we are doing but it's also a matter of capacity because battery testing capacity is rare and we are in the process of extending our battery test level.

Speaker 1: But it's also a matter of capacity because battery testing capacity is rare and we are in the process of extending our battery test laboratory that we have ourselves. So it's also a bit of a capacity question that we have to tackle with external risk.

We have our self so its also a bit of a capacity question that we have to tackle with external resources.

Speaker 9: Thanks, thanks again for that call. Just thinking 1 more and Jeff, I realize you're not probably likely to give. Precise guidance for next year, but how should we at least think about the trajectory of spend. As we contemplate our models into next year. Anything notable related to personnel is an increase scene. Anything related to tooling or materials, just sort of broad color if you could provide.

Thanks again for that car just sneaking one more in jeopardy, I realize youre not probably likely to give precise guidance for next year, but how should we at least think about the trajectory of spend.

As we contemplate our models into next year anything notable related to personnel or increasing anything related to tooling materials just.

Capex or you just sort of broad color if he could provide places.

Speaker 4: Yeah, great question, Bill. We're.

Great question Bill.

We're.

Speaker 4: about halfway through the budgeting process right now. And I think the overall head count of the company has leveled off and actually we're holding it here. So there won't be a head count growth and we're looking at offsets there. I think it.

About halfway through the budgeting.

Process right now.

And I think the overall headcount of the company has leveled off and actually were holding it here.

So there won't be a head count growth and we're looking.

It offsets there I think it's fair to say that we're looking for next year Tammy very consistent overall number is next year.

Speaker 4: fair to say that we're looking for next year to have a very consistent overall number is this year. The next

The mix will change, but we need to finish now.

Speaker 4: Will change, but we need to finish the process and can give you guidance in our next call. But I think if you would just plug in something that looks. Very consistent with the aggregate number from this year. That's a good starting point. It won't be last. Could be a little bit more, but not meaningful. Thanks thanks Jeff. Thanks a lot.

The process and can you give your guidance in our next call, but I think if you were just plug in something that looks very.

Consistent with the aggregate number from this year, that's a good starting point.

B loss could be a little bit more but not meaningful.

Okay.

Thanks, Thanks, Jeff Thanks, a lot guys.

Thank you.

We will now go to our next question.

Please standby.

Speaker 6: And your next question comes from the line of Adam Forsythe on Longsford. Please go ahead, your line is open.

And your next question comes from the line of Adam Foresight on Lone Star. Please go ahead. Your line is open.

Speaker 1: Thank you. Hello, everybody. Two questions, if I may. Firstly, just on your mention of the new ESO rules for city operation. My understanding was that actually existing rules for conventional aircraft actually gave you quite a lot of flexibility and might be applicable for you. So I'm wondering if the new rules actually give you any degree of additional opportunity in terms of the type of service you might offer.

Thank you Hello, everybody two.

Two questions. If I may firstly, just on your mention of the new Esa rules.

Our city operation My understanding was that actually existing rules group for conventional aircraft that she gave you quite a lot of flexibility and might be applicable for you. So I'm wondering if the new rules actually give you any degree of additional opportunity in time in terms of the type of service you might offer.

Speaker 1: And then my second question just on the battery life. I just wonder, are there any conditions where the 800 cycle life might be challenged, any sort of unusual operating conditions, particularly at extremes of temperature? I'm almost thinking there might be a battery equivalent of an A and a Jet A and a Jet A1 type differentiation and battery specification as the electric aircraft market evolves. Be interested in your thoughts on that. Thanks.

And then my second question just on the battery life.

I just wonder are there any conditions, where the 800 cycle like might be challenged any sort of unusual operating conditions, particularly its extremes of temperature I'm almost thinking there might be a battery equivalent up in a in an a which I tell you want a jetty Jesse one type differentiation and battery specification as the electric aircraft marketable.

Interested in your thoughts on that thanks.

Speaker 10: Yeah, so two questions. First one regarding rulemaking for operations in cities. I cannot tell you, I have to say, and please forgive me after eight weeks in the role, I'm not familiar with the detailed differences we have between existing rulemaking and rulemaking that we are in agreement with the EASA. So I need to take this forward and come back to you on it. I'm not qualified to give you the answer.

Yes, so two questions first one regarding rulemaking cooperations in cities.

I cannot tell you I have to say in Pcs forgive me after eight weeks.

And the role.

I'm not familiar with the detailed differences we have between existing we're making and we're making that we have.

In agreement with the Asa So I need to take this forward and come back to you on it I'm not qualified to give you the answer.

Speaker 10: Regarding the other question, what we are looking for and when we say certain capacity performance and cycle life, this is the nominal design target and for sure you always want to have more. When it comes for example to the temperature of the batteries, I would not dare to say it should be independent of the ambient temperature. However, CLASSIComo Thyono, Presently Recentmarked System for Advanced

Regarding the other question.

What we are looking for and when we say a certain capacity performance and cycle life.

This is a nominal design target and for sure.

You always want to have more.

When it comes for example to the temperature of the batteries.

I would not dare to say it should be independent of the ambient temperature. However.

Okay.

He will be.

Speaker 1: Sorry, there was noise on the line. The battery will anyway be conditioned. So when you charge the battery, you are bringing the battery to an optimum operating temperature and then you execute the flight. So the impact of the ambient conditions may be much less than you think it would be because at the start of the flight, it will always be the same independent from where you are starting. And for sure, then you will have, in the duration of the time, but you will have a minor effect of ambient conditions on the battery temperature, for example. And I think...

So there was a noise on the line.

The battery will any way be condition. So when you charge the battery youre, bringing the battery to an optimum.

Operating temperature and then you execute the flight so the impact of the ambient conditions may be much less than you think it would be because at the start of the bit of the flight. It will always be the same independent from where Youre starting and for sure. Then you will have and the duration of the time, but we will have a minor effect of ambient conditions on directly.

Temperature for example.

And I think.

Scott can comment on the first question.

Speaker 5: Well, just on the IAM regulations, we are part of the working group, we are closed emittering what it means, but...

Just on the Iam regulations as how we are part of the working group. We are closely monitoring what it means but the beauty of agreeing with the premium general business edition market in harsh is that how we can reuse a lot of their facilities and we can get as close as possible to the cities, which make it an offence in regards to the service refinery.

Speaker 5: The beauty of going with the premium general and business edition market at first is that we can reuse a lot of their facilities and we can get as close as possible to the CTEs offered in our public schools and

Speaker 5: make a lot of sense in regards to the service we're trying to provide. So it's that phased approach is not only a commercial approach, which is useful but also in regards to operation it makes our life a lot easier. Yes, that's great. That's really helpful. Thanks.

Providing sound.

Phased approach not only in commercial approach, which is useful.

But also in regards to operation and makes all of my colleagues here.

Yes.

That's great.

That's really helpful. Thanks.

Thank you.

Thank you.

We will now go to our next question.

Please standby.

Speaker 6: And your next question comes from the line of David Zazula from Barclays. Please go ahead, your line is open.

And your next question comes from the line of David <unk> from Barclays. Please go ahead. Your line is open.

Speaker 11: Hey, good afternoon and thanks for taking my question. Of course, maybe a relatively quick one. Can you share with us the range you've achieved during the testing so far and how the range testing is influencing your confidence and the ability to achieve four passenger level?

Hey, good afternoon, and thanks for taking my question of course might be.

Hopefully relatively quick one can you share with us the range you've achieved during the testing so far and how the range testing is influencing your confidence in the ability to achieve our.

For passenger levels.

Speaker 1: Yeah, thanks David. So, as you know, we have not flown Pegasus yet because it's in the make and the Phoenix configuration is battery-wise is not comparable to it.

Yeah. Thanks, David So as you know we have not flown picasso's yet because its in the make and the Phoenix configuration is battery wise is not comparable to it but.

Speaker 1: But what we have demonstrated is the energy density, which is exactly the 330 Wh per kg of battery weight.

But what we have demonstrated is the <unk>.

Energy density.

Which is exactly is is 330 watt hours per kilogram of battery weight.

Speaker 1: And we have, I would say, a very good accuracy in energy consumption because here for sure we have some learnings from Phoenix that we can translate into the Pegasus arena. So if you were to ask what is our level of confidence on the range, deducting the aerodynamic performance of the aircraft, the propulsion efficiency that we still have to demonstrate because we have only a couple of engines on the test stand.

And we have I would say a very good accuracy and energy consumption because here for sure. We have some learnings from Phoenix and that we can translate into the <unk> arena.

So if you were to ask what is our level of confidence on the range deducting the aerodynamic performance of the aircraft as a propulsion efficiency that we still have to demonstrate because we have only a couple of engines under test and also we will go into full scale wind tunnel testing very soon.

Speaker 1: Also, we will go into full-scale wind tunnel testing very soon. In our industry, those are the key ingredients that you need if you really want to nail down on the performance.

And in our industry. Those are the key ingredients is that you need if you really want to kind of nail down on the performance.

Speaker 1: What we know, which today is a combination of analytics and tests, but more on the analytical side, we can confirm that the operational range will be about 175 kilometers, with the physical range being 250 and the delta being the result that we have to hold.

What we know which today is a combination of analytics and test, but more on the analytical side.

We can confirm that.

The operational range will be about 175 kilometers there was a physical range being 250 and the delta.

It gives us that we have to hold.

Speaker 11: And then maybe for Sebastian, can you just give us a little bit of your philosophy on

Great and then maybe.

For Sebastian can you just give us a little bit of your philosophy on.

Speaker 11: how you're shifting or why you're shifting towards a more sales oriented model and how your PDP plan is going to dictate your geographic rollout.

How you're shifting or why you're shifting towards a more sales oriented.

Model and how your.

PDP plan is going to dictate your geographic rollout. Thanks.

Speaker 5: Okay, great question. So the, so first of all, going back to the geographical, obviously we are looking at the AS territories along with FAA, knowing that we may have a little bit of delay between both, but those are the prime regions we're looking at.

Okay Great question.

So first of all Great magazine to the theoretical obviously, we are looking at the ASR territories, along with FAA, knowing that we may have a little bit of delay between both but those are the primary reasons, we're looking at.

Speaker 5: In regards to the sales strategy, we've seen really high demand from the premium segment to really look at a new product. We are a new product in the market given that we have 30 engines, a wing, suddenly we provide a service that a lot of high-end working individuals are looking for.

And in regards to the sales strategy and we've seen real high demand from the premium segment to really.

Look at his new product right, we are a new product in the market given that we have 30 engine. We are suddenly we provide a service that a lot of high network individuals are looking for and therefore going into excel on the premium segment paved the way for really for the future, which is really to democratize.

Speaker 5: and therefore going into that cell of the premium segment paved the way for the future, which is really to democratize the air mobility service.

The Amorality service to everyone.

Speaker 5: Therefore, the first phase is natural. We sell to people that actually care and want to go fast. As I said earlier, in regards to the city regulations and the type of operational regulations, it also helps.

And therefore, the first phase is natural and we sell to people that actually care and want to go fast and as I said earlier in regard to the city of regulations and the type of operational regulation.

Also our house.

Speaker 5: from a public acceptance and from an airport authority to start with lower volume and once that is ready you move to higher volume, higher frequencies and you can go much bigger in terms of production volumes. And this is where the network kick in. Networks are extremely interesting business models that can come into play once you have all of the ingredients ready to move forward with something much more massive.

The public acceptance and airport authorities to start with lower volume and once that is ready to move to higher volume higher frequencies and he can go much bigger and in terms of production volumes and this is where the network ticket analytic works are extremely interesting business models.

Come into play once you have all of the ingredients ready to.

To move forward with something much more massive.

Awesome. Thanks for the question.

Thank you. Thank you.

Alright, thank you.

Speaker 6: We will now take our next question.

We will now take our next question please.

Please standby.

Speaker 6: And your next question comes from the line of Cervanthe Sith from Raymond James. Please go ahead, your line is open.

And your next question comes from the line of Savannah thesis from Raymond James. Please go ahead. Your line is open.

Hey, everyone.

Just.

Speaker 12: questions for me. This first one is a follow-up on the PDP. I was curious if you can provide a range or kind of a realistic target of what we might be able to see in 2022 and 20...

Two questions from me first one is a follow up on the PDP I was curious if you can provide.

<unk> are kind of a realistic target and what we might be able to see in 2022 and 2020.

Speaker 4: Hi, Savvy, afternoon. I think that we're in discussions.

Hi, Savi.

Yeah.

I think that we're in discussions I'm hopeful that that's on a range or something.

Speaker 4: Hopeful that that's a range is something that we'd be able to provide you either later this year or early next year. But I think we want to. Bottle some of the.

We'd be able to provide you either later this year early next year, but I think we Wanna funnel some of the suite discussions a bit more and then obviously, we have a better visibility and are optimistic on the individual one but I think we might.

Speaker 4: discussions a bit more and then obviously we have a bit of visibility and are optimistic on the individual one, but I think we'd like to firm it up a bit more and then can come back to you in the next quarter or two with guidance if that works.

Firming up a bit more than I can come back to you next.

And the next quarter or two with guidance if that works.

Speaker 12: And then just a second question. On the certification side, it seems like the type certification, everything's pretty clear. Are you waiting anything more from the AAFSA in terms of what your operate is and from a kind of aircraft to operations, what is necessary to set this all up or has everything been clarified?

Understood and then just a second question on the on the certification side. It seems like the type certification Everything's pretty clear are you waiting anything more from the outside in terms of what your operators.

For me it can have the aircraft to operation.

What is necessary to set the bar it has everything been clarified.

Speaker 1: No, I think this goes hand in hand because the airlines will have to amend their AOC for the operation of the Lilium jet. So it will not only be the certification of the aircraft itself, it's about also the maintenance program and also the way it's been operated. So it all goes hand in hand.

No I think this goes hand in hand, because the.

Airlines will have to amend their Aoc was the operational resilience jet. So it will not only visa certification of the aircraft itself. It's about also the maintenance program and also the wage in operated so it all goes hand in hand.

Speaker 12: Has that been clarified by IASA or are you still waiting for more from IASA on what's required on that operation?

Has that been clarified the ASR are you still waiting for more and more from me on what's required on that noise in the operation side of things.

Speaker 1: No, it's part of the set of requirements. So I cannot tell you if, let's say, the maintenance side is a bit in advance, a bit in delay, but the whole thing is if you obtain type certificate, you will do it for your manuals, for your maintenance program, and the likes. And the same is for the operation of the app.

No that it's part of the set of requirements. So I cannot tell you if.

Let's say the maintenance side is a bit in advance a bit and delay but the whole thing is if you obtain type certificate you will do it for your menus or your maintenance program and the likes and the same is for the operation of the aircraft because you need to lay that all out so all the documentations of flight menu of flight.

Speaker 1: Because you need to lay that all out, so all the documentation, the aircraft flight manual, flight crew manuals, maintenance manuals, minimum equipment list and troubleshooting manuals. And I think it's 23 or so of them. You all have to certify them at the same time. Otherwise, nobody could make use of this app.

Core menu.

Maintenance venues minimum equipment list and troubleshooting manuals, and I think it's 23 or so of them.

You all have to certify them at the same time, otherwise nobody could make use of this aircraft.

Speaker 1: Training, by the way, as well. The training organization also has to be the training organization. So how do you train? What is the training program? What is the syllabus on the training? All of that is part of the certification.

Training by the way as well as the training organization also has to be okay.

Training organization. So how do you train what does the training program what is the syllables on the training and all of that is out of the certification.

Got it understood. Thank you.

Thank you.

Speaker 6: There are currently no further phone questions. I'll hand the call back to Jeff.

There are currently no further phone questions I'll hand, the call back to Jeff.

Speaker 4: Thanks, but before we go, we'd like to ask to do one question from our retail platform. We think it's really important that we leave time for these, and we've had a number of questions. So given time constraints, I'll pick one. Klaus, this one's for you. The shareholder is asking, where do you see this company going within the next 10 years?

Thanks, Bob before we go we'd like to add to the one question from our retail platform.

We think it's.

Really important.

We have time for these and we've had a number of questions. So give it time constraints I'll pick one a class this one's for you.

Wyman.

The shareholders, asking where do you see this company going within the next 10 years.

Speaker 1: Oh, that's a bold one. Thanks for the question and also thanks to our retail investors community that we sometimes forget a little bit.

Oh.

It's a bold one yeah and thanks for the question and also thanks to our retail investors.

Community that we sometimes forget a little bit.

Speaker 1: Yeah, so innovations we are working on right now are for sure not only for this aircraft, it's also a fundament for any electric jet platform and we said before it could be also...

Yes, so innovations.

We are working on right now for sure not only for this aircraft. It's also food not meant for any electric platform and we said before it could be also spin offs into other sectors as our industries and we want to leverage this unique position to target scaling our technologies over multiple platforms was large.

Speaker 1: spin-offs into other sectors, other industries, and we want to leverage this unique position to target scaling our technologies over multiple platforms with larger form factors to serve the entire segment of regional electric aviation.

Our form factors to serve the entire meant the segment of Weeden Electric aviation Lilly.

Speaker 1: Lilium will continue to push boundaries with new programs and innovations that will reduce cost for customers.

Lillian will continued to push boundaries with new programs and innovations that will reduce costs for our customers and passengers and our ambition is for sure is to cut a trip times to a fraction of what they are today when you travel underground opening up a new level of connectivity for societies around the planet So a lot to come.

Speaker 1: and passengers and our ambition is for sure is to cut trip times to a function of what they are today when you travel on the ground opening up a new level of connectivity for societies around the planet so a lot to come.

Speaker 1: But bear with me. Our focus is today clearly on executing on the Pegasus program, which is starting production, starting flight test, certifying and making lots of customers happy with the product. And we also look for sure.

But bear with me.

Our focus is today clearly on executing on the pick up those program, which is starting production starting flattish certifying and making lots of customers happy with the product and we also look for sure into how we expand on this merits afterwards.

Speaker 1: into how we expand on this merit.

Speaker 4: Thanks class and thanks for everyone's participation today. With that, we'll conclude our business update call. Thank you.

Thanks Klaus.

For everyone's participation today with that we'll conclude our.

Business update call. Thank you.