(Bloomberg) -- Lilium NV is in advanced talks with the French government for subsidies and loan guarantees in exchange for a production facility in France, offering a possible respite for the German flying taxi firm after it sought to pull in fresh funding from its home country.

The expansion would involve as much as €400 million ($431 million) in investment and could create as many as 850 new jobs in France, Lilium said in a statement on Monday. The company is studying several possible locations, including the aerospace battery production stronghold of Nouvelle Aquitaine, and expects discussions to be completed in the coming weeks, Lilium said. 

The French funding comes as Lilium and fellow German firm Volocopter GmbH battle to raise additional funds, with discussions for a German state-backed loan stalled. Volocopter said last month that it’s in “crunch talks” for funding to ensure its survival. Lilium secured additional lines of financing through a so-called standby equity purchase agreement this month with investment fund Yorkville Advisors Global.

Flying taxi firms including Lilium and Volocopter are entering a crucial phase as they seek additional funding to keep them in the race toward certification. Volocopter is also looking to France for possible financial support, its chief executive officer said in an interview last month.

Lilium’s funding was announced as part of the annual “Choose France” business summit, which brings together 180 executives at the Versailles palace outside Paris. The event has been running for seven years as part of President Emmanuel Macron’s push to attract foreign investment and reverse a long period of economic decline for the country. 

Lilium has started production of its jet, which features small ducted fans and two pairs of wings, and targets entry into service in 2026. The company says it has a pipeline of more 780 units, made up of a mix of committed orders and memorandums of understanding.

(Updates with additional context on French summit, Lilium from 4th paragraph.)

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