Lotus Technology Inc. ((LOT)) has held its Q2 earnings call. Read on for the main highlights of the call.
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Lotus Technology Inc. recently held its earnings call, revealing a mixed sentiment. The company showcased strength in operational efficiency and market growth, particularly in China and the U.K., alongside securing substantial funding and advancing its technology and strategic partnerships. However, these positives were overshadowed by significant declines in vehicle deliveries and revenue, reduced gross margins, and continued financial losses.
Notable Growth in China and U.K. Markets
Lotus Technology reported impressive growth in the Chinese and U.K. markets. In China, the upgraded Eletre Hyper SUV has become a leading model in the premium battery electric SUV segment. Meanwhile, in the U.K., the company’s battery electric lifestyle vehicles have shown significant year-on-year improvement, marking a positive trajectory in these key regions.
New Funding Arrangements
The company secured a security purchase agreement with ATW Partners for convertible notes up to USD 300 million. Additionally, Lotus received funding commitments from its strategic partner Geely through a master credit facility framework agreement, ensuring robust financial backing for future endeavors.
Product and Technology Advancements
Lotus is making strides in product and technology advancements with the global rollout of the Emira model year ’26 and plans to upgrade its powertrain in 2027. The company is also set to unveil its 900-volt hyper-hybrid EV technology, promising an impressive range of over 1,000 km and industry-leading charging capabilities.
Operational Efficiency Improvements
The company has demonstrated a strong commitment to enhancing operational efficiency, with operating expenses reduced for seven consecutive quarters. A notable 42% year-on-year decrease in the first half highlights Lotus’s dedication to streamlining operations.
Strategic Partnerships and AI Developments
Lotus Robotics has entered into a memorandum of understanding with a strategic partner in the Middle East, focusing on AI and autonomous driving technologies. The company also plans to expand its Robotaxi projects into Saudi Arabia, indicating a forward-thinking approach to strategic partnerships.
Significant Decline in Vehicle Deliveries and Revenue
Despite the positives, Lotus faced a significant decline in vehicle deliveries, which decreased by 49% year-on-year for Q2 and 43% for the first half. Revenue also narrowed by 44% in Q2 and 45% for the first half year-on-year, presenting a challenging financial landscape.
Reduced Gross Margin
The company’s gross margin for Q2 stood at 5%, down 4 percentage points from the same quarter last year. However, the first half gross margin remained positive at 8%, reflecting some resilience despite the challenges.
Disruptions in North American Market
Deliveries of the Emira to North America were disrupted in Q2 due to tariff disputes, though they resumed in July. This disruption highlights the challenges faced in maintaining a steady supply chain in the region.
Overall Financial Losses
Lotus reported an operating loss of USD 160 million in Q2 and a net loss of USD 130 million, though these figures were improvements year-on-year. The company continues to face financial challenges, but the improvements indicate a potential path to recovery.
Forward-Looking Guidance
Looking ahead, Lotus Technology provided several key metrics for the first half and second quarter of 2025. Despite a 49% year-on-year decrease in Q2 vehicle deliveries, the company remains optimistic about its strategic initiatives and funding arrangements. The reduction in operational expenses and improvements in financial losses suggest a focus on long-term sustainability and growth.
In summary, Lotus Technology’s earnings call painted a picture of a company navigating through challenges with strategic growth and operational efficiency. While facing significant declines in deliveries and revenue, the company is bolstered by strong market growth in China and the U.K., new funding arrangements, and advancements in technology. The forward-looking guidance suggests a cautious optimism as Lotus continues to adapt and innovate in a competitive market.