Lotus UK has denied that it is planning to end production at its Hethel base and move car production to the US.
On Friday, a source told Autocar that the order to stop has come from Lotus's Geely management in China, with a move across the pond a result of growing tariff uncertainty.
Asked about this by Autocar, Lotus didn’t provide a comment but did confirm that production of the Emira sports car at Hethel has been paused since mid-May as the firm manages the fallout from the increase in tariffs in its key market of the US.
Lotus has subsequently posted a statement on social media, headed “the UK is the heart of the Lotus brand”. It reads: “Lotus Cars is continuing normal operations. There are no plans to close any factory.”
It affirms that the UK is “home to our sports car manufacturing, global design centre, motorsport operations and Lotus Engineering” but adds that Lotus is “actively exploring strategic options to enhance efficiency and ensure global competitiveness in an evolving market”.
According to The Financial Times, that statement came after the UK government indicated to Lotus that it was prepared to offer support to protect British jobs.
The newspaper claimed that business secretary Jonathan Reynolds was due to meet with Lotus officials on Sunday 28 June.
Lotus's plan to build cars in the US is in part to eradicate tariff barriers.
“We believe that localisation is a feasible plan,” Lotus CEO Feng Qingfeng said on his company’s first quarter earnings call on 25 June. “We are trying to leverage our US strategy to catch up the losses due to the tariff hike.”
Feng said that Lotus had an “in-depth discussion with our strategic partners” to build in the US, without mentioning names.
The strongest possibility is that Lotus moves some production, including possibly the Emira, to fellow Geely brand Volvo’s under-utilised plant in South Carolina.
Lotus has scrambled to reduce costs amid persistent losses. The company in April laid off 270 workers at Hethel and Autocar understands its Clerkenwell (London) headquarters is set to close, having only been opened a few months ago at huge expense. The brand’s flagship store on Park Lane has been transferred to dealer group HR Owen, understood to also be part of a cost-cutting move.
Lotus sales fell 42% in the first quarter of the year, marking the first significant decline since Geely started rolling out a new range of electric ‘lifestyle’ vehicles with the Eletre SUV and Emeya saloon.
Geely bought Lotus in 2017 from Malaysian firm DRB-Hicom, which also owns Proton, but has yet to see a return on the its £2 billion investment. Lotus posted a net loss of $183 million the first quarter while debts increased to $3.3 billion.
The company has been hit by muted demand for cars at the top end of the electric segment.
“In recent years, premium brand BEV penetration does not meet our expectation,” Feng said on the earnings call.
