What the Hethel is really going on with Lotus in the UK?

The heart-stop moment came on early Friday morning. A source with impeccable connections to Lotus UK told Autocar that the order had come from China to prepare its historic manufacturing facility in Hethel for closure. A second source backed up that bombshell. Lotus was investigating moving sports car production to the US. Separately, the Financial Times discovered from a different source that Hethel was indeed on the chopping block, threatening 1300 jobs. On Saturday, however, Lotus put out a statement that “there are no plans to close the factory”, pointing out that UK was “the heart of the Lotus brand”. On Sunday, secretary of state for business and trade Jonathan Reynolds met with Lotus to receive assurances that the plant would be safe. Relief that Lotus wouldn’t closing its facility after almost 70 years was spoilt by a feeling of unease. What the hell just happened? Was Hethel really under threat? Lotus was certainly keen to move production to the US, as confirmed by CEO Feng Qingfeng on the company’s earnings call just two days earlier. The statement from Lotus, while making it clear there was to be no shutdown, also left some room to manoeuvre. “We are actively exploring strategic options to enhance efficiency and ensure global competitiveness in the evolving market,” it stated. The phrase ‘evolving market’ is mild way of saying that Lotus has been hit hard by the slower-than-expected demand for luxury electric cars. Since Geely bought a majority stake in Lotus in 2017, the Chinese giant has bet heavily that it could leverage the brand’s storied past to create a sporting luxury brand – a battery-propelled Porsche equivalent. Over $2 billion of investment later - including a new factory in Wuhan, China, with a capacity of 150,000 and a £100 million makeover of Hethel – Lotus has yet to see a return on that investment. According to its stock market prospectus, published as recently as 2023, this was the year the company was scheduled to make its first profit. Instead, the company posted a net loss of $183m for the first quarter while debts increased to $3.3bn. “They took a big punt on premium luxury electric cars and no one’s buying them,” said one former executive. Lotus wasn’t alone in thinking that electric was going to be the fuel of the future. The rise of Tesla and particularly the way electric fever juiced its stock price persuaded many seasoned executives that electric was the way forward. Aston Martin, for example, was about to bet the farm on an electric revival of the Lagonda nameplate starting 2021 before the Covid shock and a change of ownership ended that ill-starred dream. The brand now says its first EV will arrive "before 2030". Feng identified one problem: EVs didn’t offer target customers anything new, unlike the lower segments. “Luxury car engines are already very powerful and the driving experience is quite similar,” he told the Wall Street Journal in an interview last year. The scale of the plan was of course beyond ambitious. The 2023 share prospectus forecast Lotus selling 47,000 cars last year, split between 29,500 units of the Eletre big SUV, 11,500 units of Emeya electric saloon and approximately 6000 sports cars. In the event, only the Hethel-built Emira came anywhere close, with sales of 5272. Overall, Lotus sold just 12,065 vehicles last year. This year, Lotus’s plan was to sell 73,000 cars, halfway to the ultimate goal of 150,000 by 2028. Instead, deliveries have actually fallen 42% to 1274 in the first quarter, with the ‘lifestyle’ electric models down 31% to just 719. Worse, sales even fell in China. Lotus said the fall was down to a “scheduled transition period” before sales of upgraded models started in the second quarter. However, Lotus has been hurt badly by unforeseen tariffs in the key target market of the US market. A 100% tariff on China-built EVs forced the company to pull the Eletre, leaving just the Emira. Meanwhile, Emira production has been paused since mid-May while the UK successfully negotiated a drop in the 25% global tariff on cars imported to the US imposed in April to 10%. “It's been a turbulent start of the year,” Lotus Europe CEO Matt Windle told Autocar in May. The upheaval has played havoc with Lotus’s finances. Geely put another $119m into the company June 2025 but cost-saving has become a priority. The company announced it would cut 270 jobs at Hethel and has recently moved sales and marketing staff out of its central London office. Emira sales have been strong but demand for Hethel’s other sports car, the £2m electric Evija hypercar, have reached only a “handful” instead of the 150 planned, according to one source, depriving the factory of a key planned revenue stream. Windle wants Hethel to build other models, a strategy that might save the plant if the Emira really does go to the US. “Back to the late 1990s and 2000s, we were building several models at Hethel [including Vauxhall VX220 and the Tesla Roadster] and I think that's a business model we're exploring,” he said in May. The upcoming Polestar 6 electric roadster is one possibility, he suggested. Lotus is in dire straits, but the company is still pressing on. The electric strategy has been modified to include plug-in hybrids, with the Eletre gaining the so-called 'Hyper Hybrid' drivetrain early next year. Sports cars are also included in the PHEV plan, Feng said on the company’s earnings call. The revised future model plan includes a facelift for the Emira in 2027 as well as a new model arriving in the same year, potentially the ‘Type 134’ electric rival to the Porsche Macan that was due to start sales in 2026 and forecast by Lotus back in 2023 to be selling 70,000-80,000 by 2027. A more affordable model with a more globally appealing drivetrain might not generate the margins of the Eletre or Emeya models, but it could yet become the catalyst to match Lotus’s insane ambition and high quality levels with an audience willing to take a punt on a newcomer.

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What the Hethel is really going on with Lotus in the UK?

Is Hethel under threat? Will the brand actually move production to the US? This is what we know

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What the Hethel is really going on with Lotus in the UK?

Is Hethel under threat? Will the brand actually move production to the US? This is what we know

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