Lotus to cut up to 200 jobs in the UK

[centerpunch]

Lotus to cut up to 200 jobs in the UK | Autocar

Hethel firm alludes to impact of weakening demand for EVs as factor in cost-cutting measure

www.autocar.co.uk

.

Lotus to cut up to 200 jobs in the UK​

Hethel firm alludes to impact of weakening demand for EVs as factor in cost-cutting measure​

NEWS
by Charlie Martin
8 November 2024
.
Lotus will make up to 200 more of its staff in the UK redundant, having already downsized its workforce in 2023 and earlier this year.

The “organisational changes” affect Lotus Cars, the Hethel-based arm of the brand that is responsible for the Emira sports car, Evija electric hypercar and Type 135 project – developing an electric replacement for the Emira and Elise.

The company said in a statement sent to Autocar that it would aim to retrain staff where possible “to retain specific skills and knowledge within the business”.

It implied that the redundancies are being made to cut costs, saying: “The latest proposed organisational changes at Lotus Cars are to ensure that the company has the right organisation structure in place to ensure sustainable operations."

But it also alluded to the operational impact of the global weaking in demand for pure EVs as a factor, saying: “Following a review of resources in line with market demand and evolving market conditions, the company is optimising its internal processes and structures to achieve its long-term business objectives.”

It added that the cuts were “vital to ensuring the organisation is leaner and more competitive in today’s market”.

Lotus Cars’ Chinese sister company, Lotus Technology, responsible for the Eletre electric SUV and Emeya electric saloon, will reveal its third-quarter financial results on 21 November.

It previously reported a net loss of $202 million (£156m) for the second quarter of the year and of $460 million (£355m) for the full first half.

In August, it drastically lowered its sales targets after being hit by tariffs in key markets for the two China-built EVs. It now expects to sell 12,000 cars globally this year, down from its previous forecast of 55,500.

Lotus Cars said it remains “firmly committed to the UK as the heart of [its] sports car operations”.

 

[Six Speed Stephen]

They just need to keep making cars like the emira.

 

[Nick in Sydney]

Sorry to be negative but I fear Lotus is in serious trouble. Is Geely really going to keep pumping $100M a year in to prop them up?

They went 100% EV at least five years too early and aimed too far upmarket with Eletre/Emeya. Globally, the luxury car market is in a slump. And the new EV tariff in the USA (and possibly Europe) is the final blow to their plans.

 

[Eagle7]

They just need to keep making cars like the emira.

I've been saying this for the last 2 years. They need to move all vehicle design to Carr's design group. The stuff Ben's team designs could be for any brand. Use them for one of the other brands. Keep the Emira, and come out with high performance models. Let Carr's team design a true Lotus 4 door sedan (Saloon), not something that looks like a Samurai mask. Carr's team 'gets it' with regards to the original design philosophy that made Lotus cars so special. The Evija and Emira are proof of that. I know SUV's are the thing, but I'm not sure that's a space that Lotus can really fit into at the present time. Trying to do too much too soon is creating a brand reputation issue, and that's not good.

Instead of trying to compete with Porsche which is ridiculous actually, be more realistic. It would take a LONG time before Lotus has the dealerships and customer-facing presence that Porsche has. Lotus is a boutique brand, and there's nothing wrong with being a boutique brand. Start there. Become a great boutique brand, and build up from there. Once they build up a better customer experience, including at least more service locations so that customer service is at least reasonably convenient, then they can work on an SUV.

 

[seriously]

they can’t survive on the emira alone. They should go for a small suv or hatch that retains lotus design and handling. Yes to carr’s team, please. They are an actual differentiator in the market.

 

[Tomwa]

I agree that they need another car in the chamber, but Lotus has never been a brand of options.

I don't see how you produce a "hatchback or SUV" with the existing design language. Maybe that's ok. The Lotus Carlton or Cortina are the only reference point for what a "normal lotus car" used to look like, but neither exactly are lotus original.

EV is a tough spot to be. Combined with crash safety requirements it doesn't leave a lot of room for a car to stay small.

Actually if they got permission from Ford to use the Cortina name a vehicle roughly like a Honda Fit or Jazz for you Europeans might be "right". But I don't think there's a race series for them to build it to. They could look at the WRC or Rally cross. Which is the crux of the issue. Lotus of Old didn't build anything just to be a passenger car, but that's where we are today. They need the volume to survive.

Maybe they should look at Toyota engines yet again and try to use the GR 3cyl turbo for a small car just *slightly* up market but with more practical usable space. (3 door hatchback let's say similar to a Veloster?)

I dunno. It's all not great

 

[Nick in Sydney]

Sports cars are a tough game. Look at Aston Martin, they've been turning out great cars lately but are losing $1.8M a day.

Lotus can't survive on just the Emira. In fact, the profit margins on Emira are lousy so they certainly aren't making enough money to ever develop and launch a new car.

They need more volume to survive. I've always thought that a hybrid Macan competitor should have been the first vehicle after Emira. Or possibly a hot hatch aimed at getting younger buyers into the brand.

 

[freefall_junkie]

Sports cars are a tough game. Look at Aston Martin, they've been turning out great cars lately but are losing $1.8M a day.

Same with McLaren. Great cars but they are absolutely hemorrhaging money, and much like Aston they are only still in existence due to the largesse of wealthy backers.

I don't know what the answer is for Lotus, but the Eletre and Emeya are clearly not it. The Eletre has been a sales flop and I can't see the Emeya being any different, especially with US and EU tariffs. As a long time Lotus fan I really hope they can turn things around before Geely's patience runs out.

 

[Lotustoronto]

My take is yes Lotus is in trouble, but so is every other sports car / high end manufacturer.

In all honesty building EV's for the Chinese market (worlds largest automotive market) was probably their best chance of survival, especially in a post covid world where the costs of building sports cars continues to increase. All car brands are seeing huge declines in sales and more importantly revenue. This is mostly due to the Chinese EV revolution which is happening very quickly in China. - https://www.reuters.com/business/au...automakers-rush-meet-annual-goals-2024-11-08/

The Chinese car market is doing very well and just sold a record number of EV's this October. Lotus focused on this market first, although we complained that we were being put last, perhaps it was the smart move to grow the companies sales and keep Hethel in business.

Lotus have already sold more cars than Mclaren and Aston Martin combined. ( as of Q3 2024) Will wait to see how it compares in revenue as that comes out nov 21st. Obviously those manufacturers sell in a higher price point, but neither of them make money and if you want Lotus to be like Mclaren, this is what would happen... - https://www.roadandtrack.com/news/a...bu-dhabi-based-investment-firm-cyvn-holdings/

Lotus is in the best position to gain momentum and take advantage of the EV revolution in the world's largest auto market compared to any other higher end British brand, not terrible considering what is happening in the automotive world.

 

[Eagle7]

Two things are killing the market right now. One is price, and the other is too much tech in vehicles which is partly why they're so expensive. I watched Harry's latest video where he talks about how prices are pushing things out of sight, even for people with money. It's not only the initial cost, it's the insurance and maintenance that goes along with it. If the affluent are feeling that pinch, it's no wonder sales are down so badly across the board.

The other issue is too much tech in cars. Most people don't use even half of what their cars have, and a lot of people just turn things off. It's too distracting, and takes too much time to sit there and futz around with menus trying to do something simple, like find out where the seat heater is and how to turn it on or off. How many people even know what all the tech in their car is and what it's for?

In addition to "add lightness", Lotus should go for "add simpleness". Make cars light and simple to use again. Simple, obvious analog controls for the typical things people want to turn on/off adjust. No menus. Just as adding lightness improves performance and reduces wear and tear, adding simpleness reduces frustration, complexity and cost.

I know screens are taking over the entire dashboard now, and that's all sci-fi futuristic, but is any thought being given to what happens in the future with trying to service that? If the screen malfunctions you're dead in the water. No information and no controls. Go back to analog gauges or at least separate gauges that give you the information you need quickly and easily. Imagine 20 years from now trying to restore a car that's using screen and computer technology that's been obsolete for years. Everything being built today is nothing but a massive future junkyard of useless, unfixable and unserviceable junk.

Lotus can succeed, but they have to do it by leading, not by following or trying to compete with the big players. Do what Steve Jobs did when he brought Apple back from the dead. He didn't spend time looking at or worrying about Microsoft, he focused everybody to start focusing on making one great product, "Let's make a great computer" he said. Once that attitude and mentality got focused, he then used that to create other things that solved other frustrations that people were dealing with, including customer service. Lotus should be asking themselves: "What frustrates me as a vehicle owner and user? What would I love to see or have that I don't right now? What do I need that's not available?" instead of asking themselves what Porsche or somebody else is doing.

LOTUS...you have a great sports car; improve it. Create a system of online interactivity with physical locations that have one show car, where people can see and touch the actual product, then sit down there with a sales specialist and order it through a visual interactive online system. Create a depot/service system where cars can be shipped from the factory, that does all pdi and prepares them for the customer. Any issues found are fixed there so they don't get to the customer. Make a great system, not just a great car. In the U.S., have one of these depots on the west coast, one in the mid-west, and one on the east coast. Make distribution to the customer easy and reasonable. Have many of the small, physical showroom locations as outlined above all over the country; no vehicle inventory, just an interactive showcase. They should also be service locations. Make it the equivalent of the iPod and iTunes/app store. Have all available accessories and options from Lotus as well as factory-approved 3rd parties there, so customers can sit down and browse and buy. That's the inventory they need there. How many owners would love to be able to go to a center like this and buy intakes, exhaust, wheels, CF options, etc. and either walk out with them, or have them installed right there. Talk about a money maker.

The old automobile business model is dead or dying, just as the old computer business model was when Steve Jobs reinvented Apple. Learn from that. Do what he did. The first company that figures that out, is going to become the next Apple of the automobile world.

 

[Tomwa]

There are so many challenges to what you're outlining.

You are acting as though screens are difficult to replace. I would actually argue there are far fewer manufacturers making a physical sweep dial and it's components than there are screens.

You are acting like future buyers will have the nostalgia for physical dials and buttons. I can tell you they don't.

There is not going to be an "apple of the automobile world" because cars are a much heavier investment than either a personal computer or an iPhone. Which ...is really what Steve Jobs came back and fixed.. not the PC. He did this by pushing newer features never conceived to belong to the phone segment.

For a car, it would be like selling a car where being a mode of transportation is the least important thing about it. That actually, it should be where you work, and where you sleep, and work out. It can't be big and bulky like over landing Mercedes, those are dorky, it needs to be very small and sexy. You can see it just doesn't make sense.

Also, Apple is the way they are today because they have incredibly high margins on products they sell in the millions and millions of units. They are late to market with features, not especially innovative (today), and over charge on simple accessories that only offer branding as their value proposition (don't out perform competitors at even lower price points). At best what they offer is "it just works" inside their ecosystem.

But that's all aside.

The direct to consumer sales model won't happen due to incredibly strong lobbying by dealership networks. Small "show and tell" locations like Tesla or Rivian have (which is exactly what you are describing) have thus far been an EV only thing. But honestly you still end up very challenged when it comes to repairs. Because they really can't afford to put repair centers everywhere and at least with the Tesla model repairs take forever because of part unavailability.

The EV play is honestly the only one they have if Lotus is going to pull out of motorsport and not be their reason for success and development. EV is the only way they'll attract investors, it's the only place they can make an impression on non-sports car market.

 

[Man.v.Cars]

Pretty obvious that all the warranty work on the Emira has cut any chance of a profit on them. I hate to think the cost on mine alone, currently on 3rd week at the dealers trying to find a first start idling problem. Lotus keep adding to a long list of requests of tests to do with the electrical system, and found a problem with the airbag system in the data resulting in the cabin being taken apart.

Parts alone must be costing a small fortune eg doors £2k+ each, seat belts £1k, wiper motors £300 and the rear hatch and rear panels?

Look out for liquidation and repurchase by a Geely business, removes all current and future warranty claims immediately. I fear the Emira will become an expensive garage object with low resale value.

 

[Eagle7]

There are so many challenges to what you're outlining.

You are acting as though screens are difficult to replace. I would actually argue there are far fewer manufacturers making a physical sweep dial and it's components than there are screens.

You are acting like future buyers will have the nostalgia for physical dials and buttons. I can tell you they don't.

There is not going to be an "apple of the automobile world" because cars are a much heavier investment than either a personal computer or an iPhone. Which ...is really what Steve Jobs came back and fixed.. not the PC. He did this by pushing newer features never conceived to belong to the phone segment.

For a car, it would be like selling a car where being a mode of transportation is the least important thing about it. That actually, it should be where you work, and where you sleep, and work out. It can't be big and bulky like over landing Mercedes, those are dorky, it needs to be very small and sexy. You can see it just doesn't make sense.

Also, Apple is the way they are today because they have incredibly high margins on products they sell in the millions and millions of units. They are late to market with features, not especially innovative (today), and over charge on simple accessories that only offer branding as their value proposition (don't out perform competitors at even lower price points). At best what they offer is "it just works" inside their ecosystem.

But that's all aside.

The direct to consumer sales model won't happen due to incredibly strong lobbying by dealership networks. Small "show and tell" locations like Tesla or Rivian have (which is exactly what you are describing) have thus far been an EV only thing. But honestly you still end up very challenged when it comes to repairs. Because they really can't afford to put repair centers everywhere and at least with the Tesla model repairs take forever because of part unavailability.

The EV play is honestly the only one they have if Lotus is going to pull out of motorsport and not be their reason for success and development. EV is the only way they'll attract investors, it's the only place they can make an impression on non-sports car market.

Screens right now aren't difficult to replace because it's relatively new in cars, but screen technology and the chips that drive them change rather often. Of course there are more manufacturers making screens; it's the big thing right now. Dials and buttons can be repaired, or replaced. Screens cannot, especially 20 years from now, not to mention whatever chips and software was used to control them. I wasn't referring to nostalgia, I was talking about simple functionality with a usable lifespan and future repairability.

Steve came back to fix the personal computer (iMac); there wasn't an iPhone or iPod or App store or even a physical store at that time. He developed those later. His first effort beyond the iMac was to build Apple stores to provide the kind of customer experience and service that didn't exist at that time. Next was the iPod, then the iTunes store, then the App store, then the iPhone. Yes cars are a much heavier investment, which is why the current business model of building out tons of cars and leaving them sit on dealer's lots in hopes that somebody will buy them is failing. That needs to change.

No, it would be like selling a car that the customer wants, and supporting it the way the customer needs. Apple is the way it is today because they delivered what the customer wanted, and supported them the way they needed. Yes they have volume, which is precisely my point as to why Lotus should look at what Apple did and learn from it. They're successful because they don't rush to be first to the market; they wait until they can provide a better version, and that's one of the reasons why they're successful. There's more in their "simple accessories" than people realize, which is why they sell for more. If Apple was just the standard misconception you presented, they wouldn't be the success they are today. There's more to them than you clearly realize.

In the case of Lotus, they hardly have much of a dealership network to worry about. That's part of their struggle. They can easily make whatever few dealerships they have be one of these show and tell locations, which of course are also service centers. By removing the excessive financial burden of vehicle inventory off the backs of the dealers, the dealerships can be more profitable because they can handle the services where they make the most money anyways.

The EV dream was badly mis-judged, and the entire industry is paying the price. Too much of a change, too ill-conceived, too soon. My proposal of depots (not the show and tell locations) would help to cut down the cost of warranty repairs, by catching as many of those issues at the depots before they make it out to the customer. These depots would be staffed by factory trained techs, with full communication and telemetry to the factory, so they can find, diagnose and troubleshoot issues and implement the corrections at the depots. This would also eliminate the "let's try this and see what happens" method of repair you see at dealerships who have no idea what the problem really is, or how to fix it. All of that is charged back to the manufacturer, much of it being completely unnecessary.

The business model as-is needs to change; it's not working very well for anybody. Lotus is actually in an interestingly good position to be the one to lead on this, since they DON'T have a huge dealer network to deal with.

 

[centerpunch]

I doubt if there was ever any plan or expectation for the Emira to be profitable. The volumes are too low to justify even the initial development cost.

I think Geely’s plan was to have the Emira rebuild credibility and bring new value to the Lotus brand name, and hopefully break even on the Emira. Then use that strengthened premium brand name to sell higher volume SUV’s etc. I think this copies the Porsche strategy.

Porsche sold 320,000 cars in 2023. Of those 50,000 were 911’s, and 20,000 were Cayman/Boxster. So maybe 10,000 Caymans, the car comparable to Emira.

Porsche posts stable sales in 2023: strong growth for the 911 and Taycan

Porsche saw robust growth in the 2023 fiscal year and posted a slight gain in deliveries. The sports car manufacturer delivered a total of 320,221 cars over the past 12 months. That’s three per cent more than in 2022.

newsroom.porsche.com

If now for whatever reasons (tariffs, ev sales slowing, etc.) there’s no high-volume business to utilize the Lotus brand name, it does seem unlikely Geely would continue to pump hundreds of millions into the Emira business year after year.

Although maybe a pretty obvious way to use the Lotus name would to simply rename the Polestar vehicles.

Is Polestar about to out-Lotus Lotus? | Autocar

Unlike the new Emeya, the upcoming Polestar 5 has the engineering hallmarks of an old-school Lotus

www.autocar.co.uk

 

[Tomwa]

I actually think the Emira was already being worked before Geely took over. Given they bought in 2017 and 2022 was the Emira original launch date, the Emira already had to be under-way.

Now, likely the AMG engine wasn't originally part of the plan to go to the Chinese market, but that's a relatively quick pivot.

Geely can take credit for a number of things, but the idea behind the car. Probably not.

 

[centerpunch]

But Lotus had essentially zero money pre-Geely, right?

They might have been dreaming of and even drawing the Evora 2.0 (a.k.a. Emira), but it seems unlikely they would have been able to actually start working on it.

 

[Tomwa]

They were still owned by Proton, so they would have been dreaming up stuff and pitching to try to get approval for new projects and investment needed to carry them out.

I guess we all say Geely owns lotus, but technically the Malaysians (Etika) still do own 49% of it (I think??)

 

[Nick in Sydney]

I guess we all say Geely owns lotus, but technically the Malaysians (Etika) still do own 49% of it (I think??)

After the IPO Etika was down to something like 28%. Since then, Geely has funded a bunch of convertible notes so Etika's fully diluted shareholding is probably less than 20%.

 

[Eagle7]

I actually think the Emira was already being worked before Geely took over. Given they bought in 2017 and 2022 was the Emira original launch date, the Emira already had to be under-way.

Now, likely the AMG engine wasn't originally part of the plan to go to the Chinese market, but that's a relatively quick pivot.

Geely can take credit for a number of things, but the idea behind the car. Probably not.

In the interview with The Smoking Tire, Matt Windle said the Emira was a car they wanted to build, and Geely gave him a budget within which to do it. He also said he gave Carr and the team a blank sheet to start with, and it was up to them to design something that could fit within that budget. So while Geely wasn't the ones behind the idea of the car, they certainly bought off on the idea and funded it. Remember they had already funded and produced the Evija, and had committed to going all EV before the Emira was approved and produced. I think the Emira is pure Lotus Hethel, and it shows that Lotus Hethel still has it when it comes to sports cars. At least ICE ones.

I agree the AMG engine probably wasn't part of the original plan, although I still found it an odd choice considering the Emira was supposed to be a relatively short-lived production with a definite EOL, to be replaced by the Type 135. Since Lotus already had a manual and auto option for the V6, I honestly don't see why they needed to use the AMG engine.

I really hope with the new reality of going back to ICE, or at least hybrids, maybe Geely will allow Lotus Hethel to at least continue development of the Emira. It's too nice a car to just end production. I would love to see what Carr's team could do with a nice 4-door saloon.

 

[Emira Fan]

I honestly don't see why they needed to use the AMG engine.

Might satisfy the worlds desire for smaller displacement engines.

For myself it was the decision maker to purchase. AMG engines are high-end engines that are; and have been shoved into semi-exotic cars over the years, makes for nice talking point 'AMG turbo with DTC'. Whenever youre at a show or talking with gear heads they want to talk about drivetrain.

Also I'm a bit biased, four of my cars are AMG....