Lotus Technology 1H 2024 Financial Results

[badger6sp]

I'd love if BMW bought Lotus and kept it as a majority ICE brand. Would solve a lot of problems for me at least.

 

[crestima]

I'd love if BMW bought Lotus and kept it as a majority ICE brand. Would solve a lot of problems for me at least.

Oh no !!! You mean turn it in to another Supra type ?

 

[scc.131.fe]

I'd love if BMW bought Lotus and kept it as a majority ICE brand. Would solve a lot of problems for me at least.

Complexify and remove lightness?

 

[Tokion]

https://ir.group-lotus.com/events/event-details/lotus-technology-inc-first-half-2024-earnings-conference-call

Thank you DenzilP for posting this. I logged on and listened to the entire earnings conference. I feel that I gained quite a bit of knowledge regarding what is going on in Lotus Technology, and also about failures and successes. If would seem like the Emira is the only model where demand outstrips supply, but the profit ratio is too low, and it was said that there is a plan to increase the market price of Emira until the price, and demand for the model, matches supply.

It would have been even better if there had been information about keeping on producing the model (at least the 2.0 Turbo 4-sylinder) for as long as possible even after 2027, and even better, develop a manual transmission version. But the likelihood thst this will happen is low.

It seams the current high-priced and heavy-weight electric models are selling quite a bit less than forecasted, but there was a promise of a new model with new technology to be launched in 2026, to be launched at an upcoming car show in Guangzhou.

There was quite a bit of talk about the unique Lotus developed ADAS and other “intelligence” systems that Lotus Technology has started selling to other car manufacturers, not limited to Geely.

I felt that there was absolutely no mention whatsoever of Lotus, Hethel, Norfolk, UK management like Managing Director Matt Windle. On the other hand there was considerable talk about “streamlining” and a more lightweight workforce (supposedly including management), so I will not be surprised to see staff, even at the higher levels locally in the UK, being “let go”. However, this was not said outright in this earnings call, so it is only my own interpretation.

I did not hear anything about the electric sportscar supposedly being under development at Hethel. I may have missed something, and should probably listen though again. Recently there have also been other articles hinting that the project is on hold awaiting newer battery technology.

If the battery powered sportscar from Lotus Hethel is delayed, it would be another reason to continue to manufacture and market Lotus Emira (apparently the only currently successful model of Lotus Technology.)

It would be interesting to hear about others that also ha d listened to this earnings call, and what sort of impressions and interpretations they would have.

 

[seriously]

Thank you DenzilP for posting this. I logged on and listened to the entire earnings conference. I feel that I gained quite a bit of knowledge regarding what is going on in Lotus Technology, and also about failures and successes. If would seem like the Emira is the only model where demand outstrips supply, but the profit ratio is too low, and it was said that there is a plan to increase the market price of Emira until the price, and demand for the model, matches supply.

It would have been even better if there had been information about keeping on producing the model (at least the 2.0 Turbo 4-sylinder) for as long as possible even after 2027, and even better, develop a manual transmission version. But the likelihood thst this will happen is low.

It seams the current high-priced and heavy-weight electric models are selling quite a bit less than forecasted, but there was a promise of a new model with new technology to be launched in 2026, to be launched at an upcoming car show in Guangzhou.

There was quite a bit of talk about the unique Lotus developed ADAS and other “intelligence” systems that Lotus Technology has started selling to other car manufacturers, not limited to Geely.

I felt that there was absolutely no mention whatsoever of Lotus, Hethel, Norfolk, UK management like Managing Director Matt Windle. On the other hand there was considerable talk about “streamlining” and a more lightweight workforce (supposedly including management), so I will not be surprised to see staff, even at the higher levels locally in the UK, being “let go”. However, this was not said outright in this earnings call, so it is only my own interpretation.

I did not hear anything about the electric sportscar supposedly being under development at Hethel. I may have missed something, and should probably listen though again. Recently there have also been other articles hinting that the project is on hold awaiting newer battery technology.

If the battery powered sportscar from Lotus Hethel is delayed, it would be another reason to continue to manufacture and market Lotus Emira (apparently the only currently successful model of Lotus Technology.)

It would be interesting to hear about others that also ha d listened to this earnings call, and what sort of impressions and interpretations they would have.

based on your notes, it seems logical for lotus to come out with hotter versions of the Emira to justify a premium and continue generating interest in the brand.

 

[dgrace]

Just FYI, the Emira bits are around 52:10 into the call. They promise to increase the price of Emira and achieve a 8% BOM cost reduction. One wonders if demand is still what they think it is - I suspect they're extrapolating from the early adopter bump for the FEV6 and assuming the same levels for the I4 and base model.

 

[Lotustoronto]

I think there will be a fair amount of people interested in the base unit. However I think customization and hotter versions is where they will see the most profit increases. Paint to Sample, carbon performance parts, race seats... they are aware that people want this and once they are available I can imagine a bump in sales going forward. Even in the i4's.

 

[Lotustoronto]

Had a chat at my dealer a bit ago about this matter and the opinion was Lotus might ship much of the vehicles from China to Hethel for 'final assembly ' and shipment to NA as a workaround.
Haven't heard/seen this concept elsewhere so legitimacy is questionable.
Space and training would be needed to pull this off. Dealers have a lot at stake, having made charging modifications/investment.

According to the conference call, Lotus will ship eletre from china to sell in US market, even at a loss to gain market share. I am sure this will be temporary and the most likely scenario is a new assembly factory for EU/US.

 

[Fasttoys]

Unfortunately, When your on the Titanic no matter how many times you rearrange the chairs it will not stop it from sinking. I wish Lotus luck, Elon don’t forget they helped you start your brand, can you though them some money?

 

[Jimblob]

https://ir.group-lotus.com/news-releases/news-release-details/lotus-technology-reports-unaudited-second-quarter-and-first-half

Lotus is trying to put a positive spin on the results, but they're ugly.

-- Total 1H deliveries of 4,873 units
-- Lifestyle/SUV were 2,389 and sports cars were 2,484
-- 1,278 deliveries in the USA so far this year, presumably all Emiras
-- Profitability is heading in the wrong direction. Operating loss of -$438M vs -$344M in 1H 2023
-- Gross margin went backward vs Q4 which they blame on Emira cost inflation
-- Have lowered the 2024 delivery target down to 12,000 vehicles, blamed on US and Europe tariff hikes
-- Have started "Win26" plan, which includes cost-cutting and "recalibrating product plans for globally diverse markets"

Presumably, this means more job cuts and perhaps a decision not to sell certain models in some countries. I wonder whether the BEVs won't be sold in the USA due to the new tariffs.

That’s a £90k loss per vehicle sold…. So basically you’re saying we’ve all bought a £170k car for £80k?

 

[crestima]

Unfortunately, When your on the Titanic no matter how many times you rearrange the chairs it will not stop it from sinking. I wish Lotus luck, Elon don’t forget they helped you start your brand, can you though them some money?

Ahh another good Titanic analogy... the part of that movie that left the most memorable impression on me was the attitude of the four string musicians, who kept resiliantly playing while they went down with the ship. If Lotus ends up sinking, I may end up like them, I'm not bailing out (selling) though.

 

[Lotustoronto]

That’s a £90k loss per vehicle sold…. So basically you’re saying we’ve all bought a £170k car for £80k?

I wouldn't read too much into the loss by itself. It's the sales numbers to me that are most important. When the Emira outsells the SUV there is a problem no question! Uber showed "losses" for years as do many companies when starting out.

However, an example how bad Eletre has been; in the US alone Tesla sold 23K Model X... 2.3K Eletre world wide is basically terrible considering the investment into its "lifestyle" vehicles. (caveat in 2016 when Tesla launched the Model X - they only sold 2,725 SUV's for the year) This is a new venture and if sales continue to climb every quarter then they will be in better shape, irregardless of whatever loss they post. I won't make final judgement until Q4 2025. If they aren't hitting close to 25K sales for the year in '25 - no beuno for the stock or Lotus' future.

 

[dgrace]

…If they aren't hitting close to 25K sales for the year in '25 - no beuno for the stock or Lotus' future.

I’ll take the under.

 

[Nick in Sydney]

It's eye-opening to listen to the investor call and hear the senior management team answering questions in Mandarin with a translator! Drives home the reality that Lotus Technology (not Lotus Cars) is genuinely a Chinese company and the link to the old Hethel business is pretty tenuous, not much more than a branding exercise.

One positive is that they plan to launch more limited edition models to increase average gross margin, and hopefully that will eventually include Emira.

They stated that "for Emira currently the demand is much bigger than supply so we have a plan to increase the price." That feels like a brave strategy to me!

 

[slotus]

So what your saying is, it doesn't just look like a supercar, it also costs supercar money and Lotus just subsidized it for me?

From my observation. Lotus doesn't seem to care about profitability. They are running 4 shifts a WEEK at the factory, and have no interest in high margin options like custom paint or European delivery that customers ask for. China is also in a downturn and if Geely needs hard currency, the cord will get cut.

 

[seriously]

That’s a £90k loss per vehicle sold…. So basically you’re saying we’ve all bought a £170k car for £80k?

I’m assuming they are amortizing the cost for development and spreading overhead. It’s not just the cost to build a single car. They must have done kind of break even volume number after which there may be margin based on individual car production alone.

 

[drjazzsk]

I wonder what they think will be tolerated in terms of price increase for the MY 2025 Emira? Surely another 1.0 to 2.0 price increase wouldn't be well received. Wonder what folks would consider ok for price increase?

 

[Blackthought_]

I wonder what they think will be tolerated in terms of price increase for the MY 2025 Emira? Surely another 1.0 to 2.0 price increase wouldn't be well received. Wonder what folks would consider ok for price increase?

Man, the price can’t be higher than it already is! I think people were all in at 95k and thought it was a good deal. Then 105k came around and ppl started to scratch their head. Now if they end of being 115k or so I really don’t think they’ll sell. Especially given the screw ups and issues that early Emira owners are facing now.

 

[drjazzsk]

Man, the price can’t be higher than it already is! I think people were all in at 95k and thought it was a good deal. Then 105k came around and ppl started to scratch their head. Now if they end of being 115k or so I really don’t think they’ll sell. Especially given the screw ups and issues that early Emira owners are facing now.

I completely agree. I could see a 500-1000 bump like most cars, but a much higher increase I think will hurt their sales. They may try to make up for their poor financials and mismanagement etc on the backs of Emira sales. I assume that will backfire.

 

[hagen111]

5000 cars at a 500Mio loss, well that is one hell of a dead business. Emira V6 is brilliant, but the EV line up is absolutely crap with zero hope they will do good in the future, at least in Europe. With import tariffs hiked up to 100% the chinese EV cars is unsellable. If you are ‘smart’ to get one, you look at over 60% depreciation in the first 6-12 months.

That’s the reality! And if it would be my business - I would kill and dismantle it tomorrow in its current state, as it will be impossible to bring to any attractive result with the current EV line up.
I would bring it back to the original Lotus - and engineering hub and brilliant cars for equally brilliant nerds to own them.