• The future of Lotus is suddenly uncertain as Geely withdraws its interest in the company.
Amid all the turmoil shaking up the car industry, this bit of new has gone largely unnoticed. But it could well mark a fatal turning point for one of the automotive industry's most iconic brands.
Chinese manufacturer Geely, owner of several renowned brands (Volvo, Polestar), has announced that it is exercising its “put option” to divest its 51-percent majority stake in Lotus Advanced Technologies.
In other words, Geely is forcing Lotus to buy back its shares, thus bringing all operations back under British control, under the name Lotus UK. A symbolic return to its roots, but at what cost?
A record year… with a massive hole in finances
On paper, 2024 looked like a solid year for the carmaker: Lotus Technology delivered 12,134 vehicles — a 74-percent increase compared to the previous year — generating revenues of $924 million. But reading between the lines reveals a completely different story, one that includes an operating loss of $786 million and a net loss exceeding $1 billion. And this was despite five consecutive years of spending cuts.
For Geely, these figures could hardly have been encouraging, and it appears the Chinese giant has concluded that the investment it’s made is not going to pay off. Lotus remains partly in the hands of the Malaysian group Etika Automotive, which holds 49-percent of the brand, but with Geely opting out the future is suddenly much more uncertain than it was before.
A risky all-electric bet
Lacing the resources to develop several types of powertrains, Lotus bet on an all-electric future. In 2023, the brand was still saying it didn’t believe in synthetic fuels or hybrids. November 2024 brought a change of course: Lotus announced its intention to develop hybrids. The problem now, with Geely withdrawing, is that financing the shift will be a challenge.
U.S. tariffs could deal fatal blow
An even bigger blow for the company came in the form of auto tariffs. Already in May 2024, the Biden administration imposed a 102-percent surcharge on Chinese-made electric vehicles; that figure has since risen to 125 percent.
That was bad news for Lotus, since its flagship models, the Eletre electric SUV and Emeya electric GT model, are assembled in China. Only the Emira and Evija are built in the UK - and they are not profitable enough to support the brand. Exporting the Emira to the U.S. has also been suspended, a dramatic decision in such a crucial market.
The Chinese market? Not so simple
One might think that Lotus could fall back on the Chinese market, the largest in the world. But consumers there are very loyal to domestic brands. BYD, for example, holds 32 percent of the market; Tesla manages 6.1 percent, despite a local factory. Lotus, despite the Geely connection, is perceived as a foreign brand, and one with an offering already outdated compared to local innovations such as megawatt chargers or BYD's latest-generation technologies.
What remains of the soul of Lotus
Company founder Colin Chapman aimed for lightness and simplicity: “Simplify, then add lightness”. From 1996 to 2020, Lotus embodied that spirit with models like the Elise and the Exige. Then came dreams of grandeur, fueled by a succession of buyers of the company, each of which had ambitions to turn Lotus into a global giant. The result: abandoned concepts, aborted projects… and a brand torn apart.
A necessary return to basics?
The irony is that Lotus could today be reborn by returning to its roots. Its future – indeed, its salvation - might be as a niche brand, like Caterham or Ariel. Producing small, radical sports cars, without frills or unnecessary luxuries. In a world saturated with silent EVs with omnipresent screens, a lightweight, internal combustion engine Lotus would have immense charm.