Lotus breaks sales record, posts £594m loss

[Andy H]

Lotus breaks sales record, posts £594m loss

Delivering 6,970 cars in 2023 sets a new benchmark, but Lotus has much work still to do

www.pistonheads.com

Seems like Lotus is going for broke. I hope they can carve out a path to better numbers in the future. Tesla had some eyewatering losses pre-2020 but they turned it around.

 

[Ryder]

I love some of their cars ( esp. the Emira ) but internal problems persist. I believe the Lotus company will go the way of the Dodo bird.

 

[Kimmax]

They lost at least 8k on mine for warranty repairs, parts and rental cars

 

[Rainier]

Ref. https://finance.yahoo.com/news/q4-2023-lotus-technology-inc-083915819.html

(AI generated summary of earnings call... may contain hallucinations but hopefully minimal, I have not verified. Using Gemini 1.5 Pro )

Lotus Technology Q4 2023 Earnings Call Summary:​

Key Highlights:

• Strong Growth: Lotus delivered approximately 7,000 vehicles in 2023, generating nearly $680 million in revenue. This represents significant growth from previous years and a successful first year for their BEV models.
• Expanding Product Portfolio: The company is transitioning from a niche sports car brand to a broader luxury performance mobility brand. The Eletre electric SUV and the Emeya electric sedan are driving this expansion, contributing to over 80% of total volume.
• Global Expansion: While the China market contributed significantly in 2023, Lotus is expanding its global footprint. In 2024, they aim for a more balanced distribution with around 40% of sales from China, 30% from Europe, 20% from the US, and 10% from the rest of the world.
• Retail Network Growth: Lotus plans to expand its retail network to support its growth. They aim to increase the number of stores and upgrade existing ones to accommodate more models and enhance customer engagement.
• Focus on Technology and Innovation: Lotus is investing in next-generation technologies like electric charging infrastructure, digital operating systems, and smart AI applications.
• Bespoke Services: The company is expanding its bespoke services to offer exclusive luxury customization options for its customers. This is expected to drive higher ASP and improve gross profit margins.
• Strong Financial Performance: Lotus achieved a 15% gross profit margin in 2023, which is better than most EV startups in their first year. They expect further improvement to 17-19% in 2024 due to scale effects and operating leverage.
• Vision 80 Strategy: Lotus aims to achieve significant growth by 2028 with a 4% market share in the luxury segment, 80% CAGR delivery volume growth, and over 30% gross profit margin.
• Commitment to Sustainability: Sustainability is at the core of Lotus's strategy. They are committed to achieving carbon neutrality across their operations and supply chain.

Future Outlook:

• 2024 Targets: Lotus aims to deliver 46,000 vehicles in 2024, generating $2.5 billion to $2.7 billion in revenue.
• Model Expansion: The company plans to launch a D-class electric SUV (Type 134) in 2025 and a new BEV sports car (Type 135) in 2026. This will bring their total number of models to six.
• Continued Focus on Technology and Innovation: Lotus will continue to invest in and develop advanced technologies, including autonomous driving, to enhance their product offerings and explore new revenue streams.

Additional Notes:

• Lotus does not plan to engage in price wars or introduce lower-priced models. They aim to maintain their premium positioning and focus on delivering value and emotional connection to customers.
• The company is actively exploring opportunities to return to F1 racing but has no concrete plans at this time.

Overall, Lotus Technology appears well-positioned for continued growth and success in the luxury EV market.

-------

Lotus Technology and Losses:​

While the earnings call paints a picture of strong growth and a promising future for Lotus Technology, it's important to acknowledge that the company is currently operating at a loss.

Here's what we know about their losses:

• Adjusted EBITDA Loss: In 2023, Lotus reported an adjusted EBITDA loss of $693 million. This is similar to their losses in 2022.
• Investment Phase: The company is currently in a heavy investment phase as they expand their product portfolio, develop new technologies, and build out their global retail and service infrastructure. This is contributing to their current losses.
• Path to Profitability: Lotus's management team is confident that their "Vision 80" strategy will lead them to profitability by 2028. This strategy involves achieving significant scale, expanding into high-margin revenue streams like technology licensing and software subscriptions, and improving operational efficiency.

Here are some additional factors to consider regarding their losses:

• Typical for EV Startups: It's not uncommon for EV startups to operate at a loss in their early years. The development and production of electric vehicles require significant upfront investments, and it takes time to achieve profitability.
• Long-Term Focus: Lotus's management appears to be taking a long-term approach, prioritizing growth and market share over short-term profitability.
• Access to Capital: Lotus's recent listing on Nasdaq provides them with access to capital, which is crucial for funding their growth plans and managing their losses.

Overall, while Lotus Technology is currently operating at a loss, their strong growth trajectory, expanding product portfolio, and focus on innovation suggest a promising future. Their ability to manage their losses and achieve profitability in the long run will be crucial to their success.

 

[BobbyG]

Ref. https://finance.yahoo.com/news/q4-2023-lotus-technology-inc-083915819.html

(AI generated summary of earnings call... may contain hallucinations but hopefully minimal, I have not verified. Using Gemini 1.5 Pro )

Lotus Technology Q4 2023 Earnings Call Summary:​

Key Highlights:

• Strong Growth: Lotus delivered approximately 7,000 vehicles in 2023, generating nearly $680 million in revenue. This represents significant growth from previous years and a successful first year for their BEV models.
• Expanding Product Portfolio: The company is transitioning from a niche sports car brand to a broader luxury performance mobility brand. The Eletre electric SUV and the Emeya electric sedan are driving this expansion, contributing to over 80% of total volume.
• Global Expansion: While the China market contributed significantly in 2023, Lotus is expanding its global footprint. In 2024, they aim for a more balanced distribution with around 40% of sales from China, 30% from Europe, 20% from the US, and 10% from the rest of the world.
• Retail Network Growth: Lotus plans to expand its retail network to support its growth. They aim to increase the number of stores and upgrade existing ones to accommodate more models and enhance customer engagement.
• Focus on Technology and Innovation: Lotus is investing in next-generation technologies like electric charging infrastructure, digital operating systems, and smart AI applications.
• Bespoke Services: The company is expanding its bespoke services to offer exclusive luxury customization options for its customers. This is expected to drive higher ASP and improve gross profit margins.
• Strong Financial Performance: Lotus achieved a 15% gross profit margin in 2023, which is better than most EV startups in their first year. They expect further improvement to 17-19% in 2024 due to scale effects and operating leverage.
• Vision 80 Strategy: Lotus aims to achieve significant growth by 2028 with a 4% market share in the luxury segment, 80% CAGR delivery volume growth, and over 30% gross profit margin.
• Commitment to Sustainability: Sustainability is at the core of Lotus's strategy. They are committed to achieving carbon neutrality across their operations and supply chain.

Future Outlook:

• 2024 Targets: Lotus aims to deliver 46,000 vehicles in 2024, generating $2.5 billion to $2.7 billion in revenue.
• Model Expansion: The company plans to launch a D-class electric SUV (Type 134) in 2025 and a new BEV sports car (Type 135) in 2026. This will bring their total number of models to six.
• Continued Focus on Technology and Innovation: Lotus will continue to invest in and develop advanced technologies, including autonomous driving, to enhance their product offerings and explore new revenue streams.

Additional Notes:

• Lotus does not plan to engage in price wars or introduce lower-priced models. They aim to maintain their premium positioning and focus on delivering value and emotional connection to customers.
• The company is actively exploring opportunities to return to F1 racing but has no concrete plans at this time.

Overall, Lotus Technology appears well-positioned for continued growth and success in the luxury EV market.

-------

Lotus Technology and Losses:​

While the earnings call paints a picture of strong growth and a promising future for Lotus Technology, it's important to acknowledge that the company is currently operating at a loss.

Here's what we know about their losses:

• Adjusted EBITDA Loss: In 2023, Lotus reported an adjusted EBITDA loss of $693 million. This is similar to their losses in 2022.
• Investment Phase: The company is currently in a heavy investment phase as they expand their product portfolio, develop new technologies, and build out their global retail and service infrastructure. This is contributing to their current losses.
• Path to Profitability: Lotus's management team is confident that their "Vision 80" strategy will lead them to profitability by 2028. This strategy involves achieving significant scale, expanding into high-margin revenue streams like technology licensing and software subscriptions, and improving operational efficiency.

Here are some additional factors to consider regarding their losses:

• Typical for EV Startups: It's not uncommon for EV startups to operate at a loss in their early years. The development and production of electric vehicles require significant upfront investments, and it takes time to achieve profitability.
• Long-Term Focus: Lotus's management appears to be taking a long-term approach, prioritizing growth and market share over short-term profitability.
• Access to Capital: Lotus's recent listing on Nasdaq provides them with access to capital, which is crucial for funding their growth plans and managing their losses.

Overall, while Lotus Technology is currently operating at a loss, their strong growth trajectory, expanding product portfolio, and focus on innovation suggest a promising future. Their ability to manage their losses and achieve profitability in the long run will be crucial to their success.

Exploring re-entry into F1

I’d love to see it, but talk about a huge financial commitment-serious $$$ required.

 

[wallstbear]

While I do not think 2023 results are necessarily representative of the real position (I mean Emiras were most delivered in Q4), I do see significant challenges ahead of them.

For one thing, brushing off gas cars is not the smartest move here. They need to squeeze as much out of the driver's car heritage as possible, especially as the global tide is somewhat turning back to ICE cars. If they had a gas Urus/Cayenne competitor in the market, I bet this would boost sales. I might consider one myself.

The EV market is simply too crowded right now in China. Heck, even some of Geely's own models are way too much car for the money compared to the Eletre. For 40% the money you could get a sub-3 second 0-100 beast with superb handling. The money proposition simply isn't there.

The other thing is that they have been dancing between the "luxury" and "purist" images. How many doctors and dentists are also purists? They gotta figure out their image real quick.

Then there is the east-west decoupling that's going on worldwide regardless of Janet Yellen's recent claims... One-belt-one-road countries aren't really target audiences for $100K+ vehicles.

 

[lynchy73]

While I do not think 2023 results are necessarily representative of the real position (I mean Emiras were most delivered in Q4), I do see significant challenges ahead of them.

For one thing, brushing off gas cars is not the smartest move here. They need to squeeze as much out of the driver's car heritage as possible, especially as the global tide is somewhat turning back to ICE cars. If they had a gas Urus/Cayenne competitor in the market, I bet this would boost sales. I might consider one myself.

The EV market is simply too crowded right now in China. Heck, even some of Geely's own models are way too much car for the money compared to the Eletre. For 40% the money you could get a sub-3 second 0-100 beast with superb handling. The money proposition simply isn't there.

The other thing is that they have been dancing between the "luxury" and "purist" images. How many doctors and dentists are also purists? They gotta figure out their image real quick.

Then there is the east-west decoupling that's going on worldwide regardless of Janet Yellen's recent claims... One-belt-one-road countries aren't really target audiences for $100K+ vehicles.

Agreed. If Lotus could grab some of those AMG 4.0 V8’s from their friends in Mercedes and put them in a nice SUV/Saloon car, I’m sure they could sell a few. Same goes for the Emira!

There doesn’t seem to be the same appetite in China for 100-150kUSD plus cars as there used to be. Many of the buyers that might previously choose a Mercedes, BMW or Porsche, are now choosing to buy domestic EV’s in the 40-70kUSD price range. You can get a lot of EV in China for circa 40-60kUSD equivalent. Whilst the Lotus EV are well built with high quality interiors, but the value isn’t really there when you compare it to the competition (base Eletre starts at circa 100kUSD equivalent in China). The Lotus brand might command some premium in China, but it’s not strong enough to command the premium they are asking IMPO, Lotus isn’t Porsche.

Personally, I think if Lotus were to reduce their EV prices in China by circa 15-20% they could sell much more.

 

[wallstbear]

Agreed. If Lotus could grab some of those AMG 4.0 V8’s from their friends in Mercedes and put them in a nice SUV/Saloon car, I’m sure they could sell a few. Same goes for the Emira!

There doesn’t seem to be the same appetite in China for 100-150kUSD plus cars as there used to be. Many of the buyers that might previously choose a Mercedes, BMW or Porsche, are now choosing to buy domestic EV’s in the 40-70kUSD price range. You can get a lot of EV in China for circa 40-60kUSD equivalent. Whilst the Lotus EV are well built with high quality interiors, but the value isn’t really there when you compare it to the competition (base Eletre starts at circa 100kUSD equivalent in China). The Lotus brand might command some premium in China, but it’s not strong enough to command the premium they are asking IMPO, Lotus isn’t Porsche.

Personally, I think if Lotus were to reduce their EV prices in China by circa 15-20% they could sell much more.

I.e., they should have gone the Volvo route rather than the Polestar one.

 

[dgrace]

Planning for 30% gross profit margin. Good luck with that!

 

[Six Speed Stephen]

I'm never getting my car am i...