Bad News for China Sales??

[Speedy Emira]

I still don’t know why Geely who are dedicated to the EV takeover were even interested in carrying out the R and D for the Emira knowing it will run for a few short years only. It just doesn’t make sense on a car that isn’t being mass produced or at a price where profit margins are very high I.e., like Ferrari.
Th hey may as well carried on with just the Evora and spent the time and money attempting to creat the Elise EV GT. Affordable low volume sports cars has never been a great success story so far.

 

[Lotustoronto]

The biggest point I see from the German Lotus Forum post is the lack of a luxury orientation from Lotus. This is a key point. They are trying to fluff luxury. Tesla was able to pull it off because they were first to market with complete innovative tech. No other EV brand has truly pulled off the luxury part of the market, at least not very successfully. If Lotus wants to compete with Luxury, it needs to do a much better job. Perhaps this is being handled differently in other markets, but in North America the Lotus presence is very low.

 

[Rupes]

China's economy is in the toilet. Rich people are feeling it in their crashed stock and real estate holdings. I am 1 degree removed from several people who have suffered over 50 percent loss in their net worth. The worst one was 90 percent. They have few options since China strictly controls capital outflows. Many people are feeling trapped and hopeless. In this environment, even those who are doing relatively well are taking a more cautious path. Having the Eletre made in China was a terrible mistake. They should have built it elsewhere so that they can have more ready access to international markets, the most important of which is the US. They should have given much more support to the Emira, speed up the different models to market. The timing and strategy of Lotus is just about the worst possible combination. They also bought into the EV-only mantra. Again, a terrible decision.

To your point, because China controls the outflow of money, my guess is Geely couldn't have made a similar $1B investment outside of China without significant future financial risk (ie punishment from the Chinese govt).

 

[idleuser]

Down 14% the situation isn’t unique to Lotus.

https://www.reuters.com/world/china/chinas-passenger-vehicle-sales-fall-141-jan-mm-2024-02-08/

 

[Lotustoronto]

This was interesting

 

[FlyNavy01]

I've daily driven EV's almost exclusively since 2018 and agree with most of what Harry says in that video above, apart from the UK specific regulations that I can't personally relate to of course. There will always be growing pains with transitions, particularly with a technology that humanity has hugely relied on for over 100 years. New and emerging tech is always more expensive in the beginning until it becomes mainstream through early adopters and economies of scale. Those early adopters will take the biggest hit financially as we're seeing in his video.

It's going to be a mess over the next decade, but over time, all energy becoming electric is becoming more obvious by the day (aircraft will likely be the last to transition). EV's are already 3-5x more energy efficient than ICE, but one of many side effects means many of us enthusiasts will have a hard time as these new cars lose much of their character and personality when they all start to feel like the same silent appliances and slowly remove the driver, until eventually drivers are not even needed at all. I do think fun ICE cars will remain for a long time for people like us, but they will likely become novelties not unlike mechanical watches, typewriters, or vinyl record players are today. Ask anyone under the age of 25 what the most desirable cars are and nearly all of them will say the newest tech like Tesla, Rivian, Taycan's, etc.

People said I was a fanboy fool for investing in Tesla in 2017 when they could only produce 100k cars in a year and "would never make a profit". Just a few years later they produced well over 10x that amount and still growing, as was my investment. In fact it's ironically how I can comfortably afford my Emira at a relatively young age. We're still in the infancy of EV's, but just because Lotus has only sold a handful in their very first month of sales, doesn't necessarily mean they're doomed. Don't forget Geely is a massive corporation that can afford to lose hundreds of millions a year on Lotus at first if they choose to take that risk.

 

[Speedy Emira]

I've daily driven EV's almost exclusively since 2018 and agree with most of what Harry says in that video above, apart from the UK specific regulations that I can't personally relate to of course. There will always be growing pains with transitions, particularly with a technology that humanity has hugely relied on for over 100 years. New and emerging tech is always more expensive in the beginning until it becomes mainstream through early adopters and economies of scale. Those early adopters will take the biggest hit financially as we're seeing in his video.

It's going to be a mess over the next decade, but over time, all energy becoming electric is becoming more obvious by the day (aircraft will likely be the last to transition). EV's are already 3-5x more energy efficient than ICE, but one of many side effects means many of us enthusiasts will have a hard time as these new cars lose much of their character and personality when they all start to feel like the same silent appliances and slowly remove the driver, until eventually drivers are not even needed at all. I do think fun ICE cars will remain for a long time for people like us, but they will likely become novelties not unlike mechanical watches, typewriters, or vinyl record players are today. Ask anyone under the age of 25 what the most desirable cars are and nearly all of them will say the newest tech like Tesla, Rivian, Taycan's, etc.

People said I was a fanboy fool for investing in Tesla in 2017 when they could only produce 100k cars in a year and "would never make a profit". Just a few years later they produced well over 10x that amount and still growing, as was my investment. In fact it's ironically how I can comfortably afford my Emira at a relatively young age. We're still in the infancy of EV's, but just because Lotus has only sold a handful in their very first month of sales, doesn't necessarily mean they're doomed. Don't forget Geely is a massive corporation that can afford to lose hundreds of millions a year on Lotus at first if they choose to take that risk.

I pressed like for the decent information and knowledge on the subject but it pained me to do so because I felt like I was agreeing to get rid of ice in favour of evs. I know unless something better comes out ev will be the way of the future but I’m not completely sold they are as green as the manufacturers make out taking into account building them and how the electricity is produced. Don’t get me going on child labour in lithium mines but a decent post anyway.

 

[FlyNavy01]

I pressed like for the decent information and knowledge on the subject but it pained me to do so because I felt like I was agreeing to get rid of ice in favour of evs. I know unless something better comes out ev will be the way of the future but I’m not completely sold they are as green as the manufacturers make out taking into account building them and how the electricity is produced. Don’t get me going on child labour in lithium mines but a decent post anyway.

Agreed, there are tons of related tangents we could go down about EV's and they're certainly not perfect for many use cases yet (like towing or long distances in cold weather). Unless you have solar on your home or mostly renewably sourced electric utility (I did when I lived near Seattle) keeping your already working ICE car is more "green" than buying a new 4000lb+ EV. They're not perfect, but are getting better fast. The tech is still evolving rapidly, so I'll likely wait 4-5 more years before I replace my current EV daily.

Hopefully Lotus navigates this transition smartly, but given how they've handled the Emira launch, I'm still very skeptical! Too many moving pieces right now to see how they'll fare. I honestly hope they make enough money to keep funding their fun sports cars, similar to how Porsche uses the Cayenne/Macan profits to justify R&D for their GT car lineup. A lot will depend on their China/US sales.

 

[allenyao09]

To your point, because China controls the outflow of money, my guess is Geely couldn't have made a similar $1B investment outside of China without significant future financial risk (ie punishment from the Chinese govt).

Geely is actually kind of special since their CEO has a special relationship to the big boss of China.. Maybe they don't need to worry about the government.

 

[wallstbear]

China's EV market has been ridiculously crowded lately (Geely itself has over a dozen new models this coming year alone), plus 2023 marks the major fallout between men and women which has hit all luxury goods sectors including diamonds, cosmetics and luxury vehicles.

 

[Nova]

China's EV market has been ridiculously crowded lately (Geely itself has over a dozen new models this coming year alone), plus 2023 marks the major fallout between men and women which has hit all luxury goods sectors including diamonds, cosmetics and luxury vehicles.

Sorry, I missed that cultural phenomenon, can you elaborate?

 

[DerTheDer]

Sorry, I missed that cultural phenomenon, can you elaborate?

I don't think that is just China, this generation could give a shit less about buying expensive diamonds. With the exception of a few demographics. People just don't have enough disposable income to buy diamonds and expensive purses and the such.

 

[paul0]

Terrible news for Lotus' IPO and the business. You know when the Emira is your bread and butter vs an SUV, something is wrong....

IPO, wtf? They are getting well ahead of themselves, the company is far too small for that.

 

[Fasttoys]

I've daily driven EV's almost exclusively since 2018 and agree with most of what Harry says in that video above, apart from the UK specific regulations that I can't personally relate to of course. There will always be growing pains with transitions, particularly with a technology that humanity has hugely relied on for over 100 years. New and emerging tech is always more expensive in the beginning until it becomes mainstream through early adopters and economies of scale. Those early adopters will take the biggest hit financially as we're seeing in his video.

It's going to be a mess over the next decade, but over time, all energy becoming electric is becoming more obvious by the day (aircraft will likely be the last to transition). EV's are already 3-5x more energy efficient than ICE, but one of many side effects means many of us enthusiasts will have a hard time as these new cars lose much of their character and personality when they all start to feel like the same silent appliances and slowly remove the driver, until eventually drivers are not even needed at all. I do think fun ICE cars will remain for a long time for people like us, but they will likely become novelties not unlike mechanical watches, typewriters, or vinyl record players are today. Ask anyone under the age of 25 what the most desirable cars are and nearly all of them will say the newest tech like Tesla, Rivian, Taycan's, etc.

People said I was a fanboy fool for investing in Tesla in 2017 when they could only produce 100k cars in a year and "would never make a profit". Just a few years later they produced well over 10x that amount and still growing, as was my investment. In fact it's ironically how I can comfortably afford my Emira at a relatively young age. We're still in the infancy of EV's, but just because Lotus has only sold a handful in their very first month of sales, doesn't necessarily mean they're doomed. Don't forget Geely is a massive corporation that can afford to lose hundreds of millions a year on Lotus at first if they choose to take that risk.

I am north of 49 and I embrace Technology. I work for a large technology company and moved to an EV as my daily back in 2021. I have a company car that is a hybrid and I dread going to fill it up, today the wind threw about a cup full of gas on me. its such a pain in the A, for local daily driving under 200 per day EV all the way. First one was an Audi SUV Prestige and my 2nd one is my Audi GT. I love this thing so much will be upset when it has to be returned off lease.
I have owned 64 sports cars in my time and all my friends said I would be the last one on the planet to get an EV. I can say it was the Best move I have ever made. For sports cars I prefer ICE but will still dread filling it with stinky gas. The instant power of my GT is incredible and will make the Emira power feel like a two cylinder lawn mower in comparison.

 

[wallstbear]

Sorry, I missed that cultural phenomenon, can you elaborate?

For about 15 years or so, which coincide with China's recent rapid growth, women have become rather demanding on the dating market. Guys must own a house to have a seat at the table. Lavish gifts are a must. Popular TV shows would depict guys that shower women with money, houses and LVs/Hermes. Girls in big cities are known to consider Merc/BMW/Audi owners poor people("开奔驰宝马的都是穷人"). Influencers thrived who taught women how to squeeze men. Guys have to pay the girl's family 1-5 years salary to get married (on top of having a house). During this period China became the world's #1 luxury goods market while its birth rate plummeted to historical low in almost a century and is still dropping by 15%-20% a year.

Here is a story on YT about a girl going on a date and ordering US$3000 of food. The guy shat his pants and sneaked out. Police was called. She still had to pay for it. You can't even make this up.
Starting late 2022, guys are increasingly stepping away from the dating/marriage game. MGTOW became a thing. Diamond/fashion revenues crashed while outdoor gear/fishing poles and mountain bike sales soared. It's pretty hilarious.

 

[Nova]

For about 15 years or so, which coincide with China's recent rapid growth, women have become rather demanding on the dating market. Guys must own a house to have a seat at the table. Lavish gifts are a must. Popular TV shows would depict guys that shower women with money, houses and LVs/Hermes. Girls in big cities are known to consider Merc/BMW/Audi owners poor people("开奔驰宝马的都是穷人"). Influencers thrived who taught women how to squeeze men. Guys have to pay the girl's family 1-5 years salary to get married (on top of having a house). During this period China became the world's #1 luxury goods market while its birth rate plummeted to historical low in almost a century and is still dropping by 15%-20% a year.

Here is a story on YT about a girl going on a date and ordering US$3000 of food. The guy shat his pants and sneaked out. Police was called. She still had to pay for it. You can't even make this up.
Starting late 2022, guys are increasingly stepping away from the dating/marriage game. MGTOW became a thing. Diamond/fashion revenues crashed while outdoor gear/fishing poles and mountain bike sales soared. It's pretty hilarious.

LOL, thanks for sharing. I was peripherally aware of the toxic relationship between women and men in the major cities. A similar dynamic exists here in the US but it's not as extreme or widespread - there is a non-trivial population of US women, usually young and attractive, who will only consider marrying men who make hundreds of thousands of dollars a year. However, I didn't know that the Chinese men started going "red pill" this past year. I will say, the appetite of the Chinese for luxury goods has been astounding to me over the years. Here I am mulling over a $300 Patagonia jacket and they think nothing of dropping thousands for Canadian Goose. I rationalized this away by thinking that Americans tend to have larger homes and have many more things to fill those homes. I do have three different colors/styles/weights of said Patagonia jacket... I guess the severe economic downturn in the past 2 years has finally broken the men - with businesses closing and net worth plummeting they simply can't sustain it anymore.

 

[wallstbear]

LOL, thanks for sharing. I was peripherally aware of the toxic relationship between women and men in the major cities. A similar dynamic exists here in the US but it's not as extreme or widespread - there is a non-trivial population of US women, usually young and attractive, who will only consider marrying men who make hundreds of thousands of dollars a year. However, I didn't know that the Chinese men started going "red pill" this past year. I will say, the appetite of the Chinese for luxury goods has been astounding to me over the years. Here I am mulling over a $300 Patagonia jacket and they think nothing of dropping thousands for Canadian Goose. I rationalized this away by thinking that Americans tend to have larger homes and have many more things to fill those homes. I do have three different colors/styles/weights of said Patagonia jacket... I guess the severe economic downturn in the past 2 years has finally broken the men - with businesses closing and net worth plummeting they simply can't sustain it anymore.

Absolutely. And in relation to Lotus, it's interesting that even in this economy they have chosen to go the luxury route (even got an LVMH exec on their board) rather than Colin Chapman's purist philosophy. They went out of their way to play up this concept in their IPO prospectus. In fact Lotus was organizing a dating show in China last year that required guys to "show proof of US$7mn" to be admitted. This evoked major criticism.

 

[Porter]

In fact Lotus was organizing a dating show in China last year that required guys to "show proof of US$7mn" to be admitted. This evoked major criticism.

Surely they didn't really do that, did they? Holy shit

 

[Porter]

Surely they didn't really do that, did they? Holy shit

I've returned to this several times thinking about it. As a marketing stunt, it's so grossly and patently offensive that it actually has me reconsidering whether I want to follow through with the Emira transaction. How utterly disgusting.

Do you have any more information about this, @wallstbear ?

 

[Nova]

I've returned to this several times thinking about it. As a marketing stunt, it's so grossly and patently offensive that it actually has me reconsidering whether I want to follow through with the Emira transaction. How utterly disgusting.

Do you have any more information about this, @wallstbear ?

This is the Chinese marketing crew, which I would expect have a lot of autonomy and latitude to do marketing stunts like this. I doubt Hethel or anyone in UK would do something this tasteless.

I will say, marketing in China is very different from the western world. The sensibilities are different. There is also the context that the Chinese culture is unmoored from any reference of conservative traditions due to the cultural revolution. They study and glorify their own history like any other country but the behavior of people and how they treat each other is alarmingly "flexible". There is no behavioral bottom and everyone wants to be above and better than someone else. They look at things in the west and try to mimic them, but without the cultural guardrails that keep them from going off the deep end.