Lotus Technology Inc. (NASDAQ: LOT) Q2 2025 Earnings Call | 08/29/2025

Financial Performance (Q2 and H1 2025):

• Deliveries: Q2 saw 1,400 vehicles delivered to distributors, down 49% year-on-year, and 2,800 units for H1, down 43%, due to a transition to upgraded models, U.S. tariff impacts, and destocking efforts.
• Revenue: Q2 revenue was $126 million (-44% YoY), and H1 revenue was $218 million (-45% YoY).
• Gross Margin: Q2 gross margin was 5% (-4% YoY), while H1 was 8%, remaining positive.
• Cost and Losses: Cost of revenues dropped 42% YoY to $299 million (Q2) and $200 million (H1). Gross profit was $7 million (Q2) and $80 million (H1). Operating loss improved to $160 million in Q2 (-22% YoY) and $263 million in H1 (-40% YoY). Net loss was $130 million in Q2 (-36% YoY) and $313 million in H1 (-32% YoY).
• Operational Efficiency: Operating expenses reduced by 42% YoY in H1, marking seven consecutive quarters of cost reduction.

Sales Breakdown:

• By Category: Lifestyle vehicles accounted for 83% of Q2 deliveries (up from 36% in Q1) and 68% of H1 deliveries.
• By Region: China saw growth with upgraded electric hyper-SUVs leading the premium BEV segment. UK sales improved significantly, while EMEA and North America faced disruptions due to tariffs, resuming in July.

Strategic and Operational Highlights:

• Funding: Secured $300 million in convertible notes via ATW Partners (August 19, 2025) and a 1.6 billion yuan credit facility from Geely (July 28, 2025).
• Marketing: Launched the Emira Cup race car at Goodwood Speed Festival, showcasing the Theory 1 concept and other models (Evija, Emaya, Electra, Emira). UK market sales performed strongly.
• Product Pipeline:
  • Emira: Model year 2026 launches globally in September 2025, with a 2027 powertrain upgrade (V6 and plug-in hybrid) to meet EU7 standards.
  • Hyper-Hybrid Technology: First plug-in hybrid SUV to start production by year-end, with deliveries in Q1 2026. Features dual hypercharging, a 1,000+ km range, and a smart chassis for comfort and performance modes.
  • Vision X: A new performance-focused model with hyper-hybrid technology, set for 2027 launch.
• AI and Autonomous Driving: Lotus Robotics signed an MOU for AI and autonomous driving collaboration in the Middle East, including a robotaxi project in Saudi Arabia. It provides L2/L2+ ADAS solutions globally, serving Geely and external clients like a European conglomerate and a Japanese supplier.
• Global Strategy: Focus on tariff-advantaged markets (e.g., UK) and premium EV markets. Plans to phase out underperforming outlets while expanding urban coverage in China and tailoring strategies globally.
• One Lotus Strategy: Consolidation of Lotus Cars (UK, sports cars) and Lotus Tech (China, lifestyle vehicles) to improve efficiency, targeting completion by Q1 2026. UK operations will focus on high-performance vehicles, while China emphasizes electrification and intelligence.

Q&A Highlights:

• Product Roadmap: Emphasis on hyper-hybrid technology, with an SUV launch in Q1 2026 and global compliance for models like Elettra and Emaya. U.S. market re-entry depends on tariff resolutions.
• One Lotus Strategy: Aims to integrate Lotus UK and Lotus Tech for technological and operational synergies, with board approval secured and a target closure by year-end 2025 or Q1 2026.