NASDAQ:LOT Lotus Technology Q4 2024 Earnings Report $2.21 +0.14 (+6.76%) Closing price 05/22/2025 03:56 PM EasternExtended Trading$2.24 +0.02 (+1.13%) As of 08:59 AM Eastern Extended trading is trading that happens on electronic markets outside of regular trading hours. This is a fair market value extended hours price provided by Polygon.io. Learn more. ProfileEarnings History Lotus Technology EPS ResultsActual EPS-$0.66Consensus EPS N/ABeat/MissN/AOne Year Ago EPSN/ALotus Technology Revenue ResultsActual Revenue$271.53 millionExpected RevenueN/ABeat/MissN/AYoY Revenue GrowthN/ALotus Technology Announcement DetailsQuarterQ4 2024Date4/22/2025TimeBefore Market OpensConference Call DateTuesday, April 22, 2025Conference Call Time8:00AM ETUpcoming EarningsLotus Technology's Q1 2025 earnings is scheduled for Tuesday, May 27, 2025, with a conference call scheduled at 12:00 AM ET. Check back for transcripts, audio, and key financial metrics as they become available.Conference Call ResourcesConference Call AudioConference Call TranscriptSlide DeckPress Release (8-K)Annual Report (20-F)Earnings HistoryCompany ProfileSlide DeckFull Screen Slide DeckPowered by Lotus Technology Q4 2024 Earnings Call TranscriptProvided by QuartrApril 22, 2025 ShareLink copied to clipboard.PresentationSkip to Participants Operator00:00:00Thank you for standing by, and welcome to the Lotus Technology Inc. Fourth Quarter and Full Year twenty twenty four Earnings Conference Call. I would now like to hand the conference over to Ms. Demi Zhang, Head of IR. Please go ahead. Demi ZhangHead of Investor Relations, Board Secretary Office, ESG Committee & Disclosure Committee Member at Group Lotus00:00:27Thank you, Dorsey. Good morning, good afternoon and good evening, everyone. Thank you for joining LotusTech's fourth quarter and the full year twenty twenty four earnings call. This is Emmy Zhang, the Head of IR at LotusTech. I'm very honored to introduce company management with us today, CEO, Qing Feng Feng and CFO, Dashie Wang. Demi ZhangHead of Investor Relations, Board Secretary Office, ESG Committee & Disclosure Committee Member at Group Lotus00:00:49On today's call, we'll start with prepared remarks from CFO and the CEO first and then kick off the Q and A session. Before we continue, please be reminded that today's discussion will contain forward looking statements pursuant to the Safe Harbor provisions of The U. S. Private Securities Litigation Reform Act of 1995 and forward looking statements involve inherent risks and uncertainties. As such, the company's actual results may be materially different from the views expressed today. Demi ZhangHead of Investor Relations, Board Secretary Office, ESG Committee & Disclosure Committee Member at Group Lotus00:01:18So further information regarding risks and uncertainties is included in relevant filings of Lotus Tech with the U. S. Securities and Exchange Commission. The company undertakes no obligation to update any forward looking statements except as required under applicable law. Please also note that our earnings press release and this conference call will include disclosure of non audited GAAP financial information as well as unaudited non GAAP financial measures. Demi ZhangHead of Investor Relations, Board Secretary Office, ESG Committee & Disclosure Committee Member at Group Lotus00:01:45Please refer to our press release, which contains a reconciliation of non GAAP measures to comparable GAAP measures, which you can find at ir.groupmotus.com. With that, I'd like to turn the call over to our CFO, Mr. Wang, please. Daxue WangCFO at Lotus Technology00:02:02Thank you. Hello, distinguished shareholders, analysts and members of the press. Thank you very much for joining our Q4 and full year 2024 learning's release. My name is Ashu Wang, Chief Financial Officer of Lotus. I would like to take this opportunity to brief you the financial results of the company. Daxue WangCFO at Lotus Technology00:02:22In 2024, the company delivered over 12,000 vehicles, reflecting a year on year increase of over 70%. For the fourth quarter, over 4,500 vehicles were delivered, representing a 20% year on year increase. We consider this as a remarkable growth considering the global trade uncertainties and economic slowdown. As for the revenue, although the fourth quarter results was narrowed by 12% year on year to US272 million dollars the company gained an increase of 36% year on year increase to $924,000,000 the full year. Another achievement we want to highlight is we have achieved a reduction in operation expenses for five quarters in a row. Daxue WangCFO at Lotus Technology00:03:10The rigid execution of efficiency enhancement plans. Now, I would like to further break down our sales by category and by region. It turns out that the lifestyle vehicles increased by 57% year on year and accounted for 57% of the total deliveries as well. By region, Europe, the home of Lotus brand, continued to expand with a year on year increase of some 180% and contributed nearly 40% of the total deliveries. China, and the second largest market, Volotis, contributed one quarter of the total deliveries. Daxue WangCFO at Lotus Technology00:03:49North America, mainly The United States, should by 415% in 2024, making up 21% of the company's total deliveries. And the rest of the world regions represented 15% of the total with nearly 90% year on year growth. For your attention, in the fourth quarter, we started to deliver EMEA in Malaysia, Thailand, Singapore, UAE and Philippines. For the key financial indicators, deliveries and revenues are being reported. I will now repeat here. Daxue WangCFO at Lotus Technology00:04:28The cost of revenues increased to $395,000,000 and $3.00 $1,000,000 for the full year and for the fourth quarter respectively. As a result, the gross profit margin was lower to 3% for the full year and back to 11% for the fourth quarter. We reported an operating loss of $736,000,000 for the year and $189,000,000 for the fourth quarter. Net loss was accrued to $11.00 $7,000,000 for the full year and $441,000,000 for the fourth quarter. For your information, adjusted net loss adjusted under the non GAAP measures were not much too different. Daxue WangCFO at Lotus Technology00:05:11Then I'll first stop here and hand over the speaker to Mr. Feng. Qingfeng FengCEO & Director at Lotus Technology00:05:26Hello, everyone. I'm CEO of LotusTech, Feng Qingtong. Allow me to share our key achievements in the year of 2024. Our performance overall is better than the broader luxury market. We have ranked the top among British luxury car brands with over 12,000 vehicles delivered in 2024, a 74% better compared with our performance in 2023. Qingfeng FengCEO & Director at Lotus Technology00:06:25Currently, we have four models under delivery. We have one SUV, one sedan or rather GT, and two sports car, including a mirror and also Last year, we keep exploring our international footprint. We have entered into more than 10 countries in GCC region, Asia and Oceania. In addition to that, we have also been keeping cost reduction and also efficiency improvement, And we've been achieving operating expense reduction for five consecutive quarters. Besides, we have also launched our theory one concept car. This is a revolutionary concept car Qingfeng FengCEO & Director at Lotus Technology00:07:48made with sustainable materials to redefine luxury, and we have gained wide recognition from our press friends. For this particular vehicle, it has defined our direction for our future models, particularly on its design language and also its sustainable principles. As for our progress on ESG, we were honoured as highly commenced at Ruta's Sustainability Awards twenty twenty four, leading the EV industry within Rooter's Vision 02/1945 campaign. Lotus was the winner of the 2024 EUCCC Sustainable Business Award and the Green App Award for Outstanding Environmental Practices. Our sustainable supply management case was also included in Shanghai Climate Week twenty twenty four Climate Tech In Focus report, and this report was also released at COVID-nineteen. Qingfeng FengCEO & Director at Lotus Technology00:09:47As for our recent development in 2025, we have already delivered more than 12,000 vehicles in the first three months, and as for the cells at the end, we have already delivered more than 2,000. In the past, the LOTUS in China was called the English pronunciation of LOTUS, hence we have to use NYO as part of our logo. But in January 2025, we have successfully reclaimed the proprietary rights of LOTUS iconic logo, LOTUS wordmark and the Chinese character of Lotus Lianghua in China, ensuring consistency in terms of its trademark across the world. In addition to that, we have also made a model facelift for our ELETRA and EMEA. Specifically in February, we have refreshed the lineup of those two models with upgraded configuration and competitive pricing. Qingfeng FengCEO & Director at Lotus Technology00:11:56In China, the vehicle has been delivered starting from February, and in quarter two, the delivery will also commence in EU and the rest of the world. Besides, we have also launched the MATLAB urban NOA navigation on autopilot in 16 cities across China in February. The system can effortlessly achieve lane changing seamless transition between highways and city roads use and factor intersections, intelligent lane selection, and smart obstacle avoidance. Starting in February, we have also started our OTA to push this function to our end customers. This is then can make our vehicle to be able to deliver door to door intelligent driving. Qingfeng FengCEO & Director at Lotus Technology00:13:28Starting from quarter two, this function will be available in more than 100 cities in China through OTA. In March, Lotus Intelligent Driving Arm, Lotus Robotics, has also established a strategic partnership with Taosao Mobility to launch an innovative intelligent mobility platform for robotaxi. We have also started a pilot operation in the city of Hangzhou and the city of Suzhou. In addition to that, Lotus Technologies Natural Capital Assessment project was also included in World Economic Forum report, which demonstrated our ambition and also our progress in sustainable development, particularly among luxury vehicles. On 04/14/2025, we have received the exercise notice from Chile requiring Lotus Tech to purchase 61% of the equity interests in Lotus UK, according to the put option agreement dated 01/31/2023 between the parties. Qingfeng FengCEO & Director at Lotus Technology00:16:08If we can exercise this put option, we will be able to operate on two factories, Hatho factory in The UK and Wuhan factory from China. Those two factories can cover four regions, Middle East, APAC, Europe, China and North America. As per the exercise of a put option from Geely, Lotus expects to acquire 50% of equity interest in Lotus UK through a non cash transaction based on pre agreed valuation methodology. Upon completion, Lotus will gain control over Lotus UK and consolidate its financial results. The strategic transaction will enable the company to integrate all global businesses under Lotus brand. Qingfeng FengCEO & Director at Lotus Technology00:17:37Subject to potential regulatory approvals, the acquisition is expected to be completed in 2025 this year. As for our product pipeline, Evaya, this is our hypercar, it has a limited offering of 130 vehicles globally. We have already started the delivery of this hypercar. And moving on to our Emera sports car. The US market is the biggest market for Emera, and this vehicle has also been available for global other markets. Qingfeng FengCEO & Director at Lotus Technology00:18:59This year, we are going to launch a model year '26 for EMERA. It will be dedicated to The US market and also meets the compliance requirements for other markets. In 2027, we are planning a major uplift for EMERA. It will have more horsepower. It will also be compliant to EU seven emission requirements. Qingfeng FengCEO & Director at Lotus Technology00:19:42As for our lifestyle vehicles, Electra and EMEA, previously, I briefly mentioned about it that we have already commenced the delivery in China for model year '26, and the delivery for EU, UK, and the rest of the world will also start in quarter two. At the end of this year, in other words, at the end of twenty twenty five, we are planning to launch a PHEV. We would call it a hyper hybrid model. This model will start delivery first in China in quarter one next year. In 2027, we are also planning another new model. Qingfeng FengCEO & Director at Lotus Technology00:20:53And by adding this new model together, we would be able to deliver our vision of a Vision 80 strategy. In other words, we will have six models in total. And that's all I'd like to share with you. Thank you. Demi ZhangHead of Investor Relations, Board Secretary Office, ESG Committee & Disclosure Committee Member at Group Lotus00:21:12Well, thank you, and CFO. Darcy, we are ready for Q and A, please. Operator00:21:19Thank you. Your first question comes from Kevin Kolelo from Tier one Systems. Please go ahead. Analyst00:21:41Hey. Good morning, everyone. Thank you for taking my call. I'm calling as a Lotus investor, as someone who opened an exotic car dealership here in California about eleven years ago, and most of all as a car enthusiast. And basically, really my question is, is there any plan? Analyst00:22:00It seems like you have a really amazing opportunity with the Emera to create something that would be highly in demand here in The U. S. Market, which would be something that's lighter weight than currently exists right now in the Emera, maybe adding carbon ceramic brakes, carbon bucket seats, some other things to remove a couple hundred pounds. And also increasing, the horsepower and red line on the v six, which is an amazing engine. It sounds great. Analyst00:22:27If you look at Porsche, they really have kind of created the recipe that everyone else, I think, should follow. If you look at what the GT3s and the GT3 RSs sell for, mean, they're going for a hundred thousand over MSRP right now. They're almost impossible to get. I'd be curious to know, do you have any plans of creating just really like a hardcore, maybe an Emera R with a high revving V six manual transmission, lightweight? I think that would do amazingly well here in The US market. Qingfeng FengCEO & Director at Lotus Technology00:23:18Thank you for your question. I think it's a brilliant suggestion and intact. US is the largest market of MIRROR. Almost 50% of MIRROR cells are all coming from The US, and particularly our Abasix model very much preferred by our US consumers. Well, we are very clear that our US consumers would prefer engine or model with a higher horsepower and higher RPM. Qingfeng FengCEO & Director at Lotus Technology00:24:41As a matter of fact, we have another model available in The US market, the two point zero turbo model. It has also a relatively high horsepower. At the very beginning, we were quite concerned about our US consumers that they may only prefer the V six model instead of the two point zero turbo model. However, after our consumers testing drive the two point zero turbo model with also 400 horsepower, Our consumers have really liked it, particularly with its power consistent ACT transmission and a very fast response. As for V six, we, to be honest, do not have the plan to further increase its power because this engine will not be compliant for EU7 emission. Qingfeng FengCEO & Director at Lotus Technology00:26:05However, we are investigating a new powertrain system, which is a V eight. It will have a bigger horsepower and we are currently investigating the feasibility of a V eight. And actually, this year in Europe, we have launched some limited edition with less weight like the suggestion that you mentioned that we put more carbon fiber materials on it. And we will consider to see if we are going to launch similar models in The US market. Thank you for your passion for Lotus. Qingfeng FengCEO & Director at Lotus Technology00:27:08Also, thank you for your great suggestion. Analyst00:27:12Thank you very much. Appreciate it. Operator00:27:16Thank you. Your next question comes from Laura Lee from Deutsche Bank U. S. Please go ahead. Laura LiEquity Research Associate at Deutsche Bank00:27:24Hey. Well, thank you for taking my question. So my first question is about the ADAS revenue. So what's this like contribution over the last year? And any update on the guidance? Laura LiEquity Research Associate at Deutsche Bank00:27:39Any new design win you're working on? Yeah, that's my first question. Demi ZhangHead of Investor Relations, Board Secretary Office, ESG Committee & Disclosure Committee Member at Group Lotus00:27:46Thank you, Laura. I will invite CFO to give your answer. Our first question is on the revenue guidance. Daxue WangCFO at Lotus Technology00:27:57So you mean for the 2025, right? Yes. Okay. So if you're like, we have data plan, which is going to be, you know, like we have improvements compared to the 2024. Let's say we are waiting for further approval from the board of directors. Demi ZhangHead of Investor Relations, Board Secretary Office, ESG Committee & Disclosure Committee Member at Group Lotus00:28:21Thank you. And Laura's second question, I remember the question on the revenue on the RobomTX. Daxue WangCFO at Lotus Technology00:28:30Okay. So for the robotics, actually we achieved improvement compared to the one year before. And we gained not only the internally we got the revenue from the Lotus, we also gained some customers from the outside of the company and also outside from the GD Group. So overall, it achieved like $22,000,000 the customers outside the Lotus. So that's something like meanwhile, our gross profit margin, I think we have a pretty high margin compared to the sales of goods. Daxue WangCFO at Lotus Technology00:29:19I mean, we are going to be able to keep this number in this year. So that's basically the revenues from the robotics side. Laura LiEquity Research Associate at Deutsche Bank00:29:34Okay. Okay. Got you. My second question is around like the margin trajectory, as you mentioned for this year and '26. Are there any like hard win or tail win on a year on year basis we should consider? Laura LiEquity Research Associate at Deutsche Bank00:29:52And also thinking about the tariff situation, are there any like changes on production arrangements that you're considering? Demi ZhangHead of Investor Relations, Board Secretary Office, ESG Committee & Disclosure Committee Member at Group Lotus00:30:06Yeah, thank you, Laura. Her first question is on the margin trajectory for this year and the next year. And also considering the tariff situation, is there any changes? Okay. Daxue WangCFO at Lotus Technology00:30:18So I think the margin is good. It might improve this year compared to last year. Last year, first there is a trade in uncertainties. And also like we have the stock so we're so we're facilitating, you know, the stock clearing plans, so which cost our profit margin, you know, to lower compared to the one year before. But this year, I think the first day they I mean, where the stock plan is going to be much is over and we no longer have this stock, you know, clearing requirements. Daxue WangCFO at Lotus Technology00:30:51I mean, well, we have a much better product cost structure. So that means probably the gross profit margin is going be much better So that's my expectation for the year 2025. Demi ZhangHead of Investor Relations, Board Secretary Office, ESG Committee & Disclosure Committee Member at Group Lotus00:31:20Excuse me. Do you mind repeating your last question on the tariff? Sorry, your voice was very far away. Laura LiEquity Research Associate at Deutsche Bank00:31:29Oh, yeah. Yeah, so the second part is around, like to the impact of tariffs and any like mitigation you're considering, like changes on production arrangement or this sort of solution. Demi ZhangHead of Investor Relations, Board Secretary Office, ESG Committee & Disclosure Committee Member at Group Lotus00:31:47Thank you. Qingfeng FengCEO & Director at Lotus Technology00:32:14Well, currently we have been affected by The US unbelievably high tariff, particularly for our lifestyle vehicle, which is produced in China. As our lifestyle vehicle have already stopped its export into The US market. However, our sports car, which is produced in The UK, has not been affected yet. We're still investigating the market and also we are still doing analysis. Laura LiEquity Research Associate at Deutsche Bank00:32:45Okay. Got you. Yeah, that's helpful. Demi ZhangHead of Investor Relations, Board Secretary Office, ESG Committee & Disclosure Committee Member at Group Lotus00:32:49Thank you, Laura. Operator00:32:52Thank you. Your next question comes from Eunice Yang from MSIM China. Please go ahead. Analyst00:33:04Hi, thank you for taking my question. I have two questions actually. First one is, what are the contributing factors behind the significant decline in gross profit in the fourth quarter of twenty twenty four? And how much did the intelligent driving and the bespoke service contribute to the service revenue and the gross profit in this fourth quarter? Demi ZhangHead of Investor Relations, Board Secretary Office, ESG Committee & Disclosure Committee Member at Group Lotus00:33:29Thank you, Roy. I will invite CFO, Mr. Wang. Daxue WangCFO at Lotus Technology00:33:33Yeah. So basically the fourth quarter performance, as do tell, has some decline. It's because we clearly, you know, the stock. And meanwhile, like the I heard that this is from the tariff. I mean, while for the intelligent driving business, there's accounting rules exchange change because of the they changed the booking policy from the cash basis to the accrual basis in the fourth quarter. Daxue WangCFO at Lotus Technology00:34:06So this results in some adjustment, accounting adjustment in the figures. So you can tell from the for the fourth quarter of the sales, the revenues from the services, you can see the change. So basically, about starting from this year, we already under the new accounting policies. The gross margin is going to be recovered. And meanwhile, in the service sector, we're going to align the driving business with the industry benchmark. Daxue WangCFO at Lotus Technology00:34:42So thank you. Qingfeng FengCEO & Director at Lotus Technology00:34:45Okay. Thank you. And also, I'd like to comment that in 2025, our gross margin is going to be greatly improved due to our launch of model year '26. As I previously elaborated, the model year '26 will be launched in Europe, including EU and UK in quarter two, and those are two markets that actually accounted for more than 40% of our total sales. So, by launching model year '26, it can help us to improve our gross margin. Analyst00:35:58Okay, thank you. I have a second question is, what is the revenue and profit margin of the Intelligent Driving business in the past year 2024? And any guidance for this following year '20 '20 '5 and midterm revenue and profit margin for vehicles and or the comprehensive service respectively, what is the plan to improve the margin? Yeah, that's my final question. Thank you. Daxue WangCFO at Lotus Technology00:36:24Yeah. The benchmark margin for the intelligence driven business is about like 30%. So it's in line with the industry standard. So starting from this year, we are going to not only to improve the margin also, are going get more clients, more business from the market. So I think they are going to further lower the cost thereby increasing the profit margin. Analyst00:36:54Okay. Thank you. Demi ZhangHead of Investor Relations, Board Secretary Office, ESG Committee & Disclosure Committee Member at Group Lotus00:36:57Thank you, Roy. Operator00:37:00Thank you. Your next question comes from Tom Lu from Capital Sunrise. Please go ahead. Analyst00:37:08Thank you for taking my questions. Up to you. The first one is, what's the cash burn rate now and how long is the runway? Is there any significant financing we can expect in the next six months? Daxue WangCFO at Lotus Technology00:37:24Yeah. As you can tell from like our financial performance, we do have, you know, the gap in terms of the cash. And also, we are making the cash gap, you know, field through the operation, through the investment plan, through the financing. And we are being closely contacting the in the market. So please take a close look at our announcement and also the company release. Daxue WangCFO at Lotus Technology00:37:53Thank you so much. Demi ZhangHead of Investor Relations, Board Secretary Office, ESG Committee & Disclosure Committee Member at Group Lotus00:38:00Tom, you have another question, Yes. Analyst00:38:04My second question is about the management capabilities. So, we've noticed the recent management shifts. And would you mind to share the rationale behind? And what makes the current management team the right one to turn around a luxury company? Thank you. Qingfeng FengCEO & Director at Lotus Technology00:38:55As far as recent management change, we do have welcomed a new CFO, Wang Da Xue. He had a rich experience in finance and also capital markets. In addition to that, also had a great performance in Geely. And another thing I'd like to comment is about the change of the head of sales in China. We have introduced a new China Sales President, Qing Pei Chi. Qingfeng FengCEO & Director at Lotus Technology00:40:03He had also a rich experience in luxury products, particularly with Volvo. During his time with Volvo, helped the Volvo sales volume increase from 80,000 to 90,000 to more than 180,000 to 190,000 significant jumps. And overall, I just want to say that for our entire management team, we are we have a seasoned and also rich experience when it comes to luxury brand management. As for Ms. Mao Jin Guo, she previously had a really rich experience with Benz and also Lincoln, and now she is responsible for closest coordination of herself and operation and brand and marketing collaboration covering the regions such as The EU, US and APAC. Qingfeng FengCEO & Director at Lotus Technology00:41:38The ultimate target is to ensure viral load is consistency. As for our Chief of Brand Officer or Chief of Creative Officer, Ben Payne, he remains at this position, and he created a lot of brilliant content for us and also the sensational concept to car if you rewind that I previously mentioned. He is also created by him. As far as our head of sales in The US, he was COO with Mr. Rasi, so he can bring us a lot of great experiences that he previously gained. Qingfeng FengCEO & Director at Lotus Technology00:42:47Thank you. Operator00:42:53Thank you. There are no further questions at this time. I'll now hand back to Ms. Zhang for closing remarks. Demi ZhangHead of Investor Relations, Board Secretary Office, ESG Committee & Disclosure Committee Member at Group Lotus00:43:01Darcy, do you want to remind everybody how to raise their questions if there's any more? Yes. Sure. Have a couple of minutes left. Operator00:43:18You. We have a question from George Tang from Elson Capital. Please go ahead. Analyst00:43:23Hi, good morning. Thanks everybody for your time this morning. I have three quick questions for management. First question is can management kindly give a high level guidance on how the put option will impact the company's financials, you know, such as the balance sheet, cash flow, and p and l? It appears there's pretty high debt asset ratio of over 130% by end of twenty twenty four. Analyst00:43:52How will the acquisition change that number? Thank you. Demi ZhangHead of Investor Relations, Board Secretary Office, ESG Committee & Disclosure Committee Member at Group Lotus00:43:57Thank you, George. I will first invite CFO to give you some color on the question. Daxue WangCFO at Lotus Technology00:44:03So regarding the execution of the put option, whereas do you do the daily list? I'm talking with the with lot of UK. So I think we are going to release the results in the time if it's done. For funding you just mentioned, it's going to be a noncash deal. So it's not going to bring the cash to the company. Daxue WangCFO at Lotus Technology00:44:32And overall, I think the answer to your question, we can wait until we finish the investigation and then we get the deal done. So please take a closer look at our, you know, further notice. Thank you very much. Perfect. Analyst00:44:48Thank you. And I I have another question perhaps. This this has been burning the back of many people's minds. But I was wondering what is Lotus' US strategy, market strategy, you know, given the current geopolitical tensions and terrorist situation. And having said that, what do you think will be your target sales for U. Analyst00:45:13S. Market in this year? Thank you. Demi ZhangHead of Investor Relations, Board Secretary Office, ESG Committee & Disclosure Committee Member at Group Lotus00:45:17Thanks, George. I will invite CEO to answer your question. Qingfeng FengCEO & Director at Lotus Technology00:45:53Yes, in 2025, it is going to be tougher, but particularly we are affected by our lifestyle vehicle remaining affected by the tariff hike. As far as sports car, we were slightly affected, so we haven't actually changed our original plan for our sports car sales in The US. We expect about roughly 200 to 300 sales more because of the tariff in The US. Currently, we're also exploring our paths and the solutions for The US market and because The US market is the biggest market of luxury premium vehicle segment, in addition to that, Salotis also has relatively high brand awareness in The US market. So, definitely US market will be one of our priorities. Qingfeng FengCEO & Director at Lotus Technology00:47:33In addition to that, we will also keep exploring our feasibility of exporting lifestyle vehicles to The US market. And at this moment, we will not be able to disclose any details, but please feel free to stay tuned to our future announcements. The only thing that I may add is that manufacturing in The US could be one of our potential solutions. Operator00:48:20Thank you. Once again, if you wish to ask a question, please press 1 on your telephone and wait for your name to be announced. We'll now pause a moment to allow for any final questions to register. There are no further questions at this time. Demi ZhangHead of Investor Relations, Board Secretary Office, ESG Committee & Disclosure Committee Member at Group Lotus00:48:49Yeah. Thank you, Darcy. Well, given the time constraint, I think we will conclude the call very soon. But everyone, thank you very much again for joining us today. If you have any further questions, please feel free to contact our IR team. Demi ZhangHead of Investor Relations, Board Secretary Office, ESG Committee & Disclosure Committee Member at Group Lotus00:49:04And this concludes the call. Have a very good day, everyone, and thank you very much again. Bye. Operator00:49:12Thank you. That does conclude our conference for today. Thank you for participating. You may now disconnect.Read moreParticipantsExecutivesDaxue WangCFOQingfeng FengCEO & DirectorAnalystsDemi ZhangHead of Investor Relations, Board Secretary Office, ESG Committee & Disclosure Committee Member at Group LotusAnalystLaura LiEquity Research Associate at Deutsche BankPowered by Key Takeaways Lotus delivered over 12,000 vehicles in 2024, a 74% year-on-year increase, with strong regional growth in Europe (+180%), North America (+415%), China (25%) and other markets (+90%), and expanded deliveries to Malaysia, Thailand, Singapore, UAE and the Philippines in Q4. The company reported full-year 2024 revenues of $924 million (up 36% YoY) but saw Q4 revenues dip 12% to $272 million, with a full-year gross margin at 3% (Q4: 11%), operating loss of $736 million (Q4: $189 million) and net loss of $1.17 billion (Q4: $441 million), while reducing operating expenses for the fifth consecutive quarter. Lotus’ product roadmap highlights the sustainable “Terra” concept car, delivery of the Evija hypercar, a model-year ’26 refresh for Electra and EMEA featuring upgraded configurations and OTA-enabled Matla urban NOA, and a six-model lineup under its “Vision 80” strategy by 2027, including a PHEV “hyper-hybrid.” The board received notice to exercise a put option to acquire up to 61% of Lotus UK via a pre-agreed non-cash transaction, expected to consolidate UK and Wuhan factories, integrate global operations and gain control of Lotus UK’s financials, subject to regulatory approvals in 2025. Lotus earned multiple ESG accolades in 2024, winning the Rutas Sustainability Award, EUCCC Sustainable Business Award and Green App Award, and was featured in Shanghai Climate Week and World Economic Forum reports for its sustainable supply management and natural capital initiatives. AI Generated. May Contain Errors.Conference Call Audio Live Call not available Earnings Conference CallLotus Technology Q4 202400:00 / 00:00Speed:1x1.25x1.5x2xTranscript SectionsPresentationParticipants Earnings DocumentsSlide DeckPress Release(8-K)Annual report(20-F) Lotus Technology Earnings HeadlinesHead to Head Analysis: Mullen Automotive (NASDAQ:MULN) vs. Lotus Technology (NASDAQ:LOT)May 22 at 2:11 AM | americanbankingnews.comLotus Wants To Get Back Into Building Other Companies' CarsMay 21 at 7:23 PM | msn.comWatch This Robotics Demo Before July 23rdJeff Brown, the tech legend who picked shares of Nvidia in 2016 before they jumped by more than 22,000%... Just did a demo of what Nvidia’s CEO said will be "the first multitrillion-dollar robotics industry."May 23, 2025 | Brownstone Research (Ad)Vistra to buy 2.6GW generation capacity from Lotus for $1.9bnMay 16, 2025 | finance.yahoo.comWhy Lotus is returning to enginesMay 15, 2025 | msn.com918 hp and 2.8 Seconds to 100: Lotus Just Rewrote the Electric PlaybookMay 15, 2025 | msn.comSee More Lotus Technology Headlines Get Earnings Announcements in your inboxWant to stay updated on the latest earnings announcements and upcoming reports for companies like Lotus Technology? Sign up for Earnings360's daily newsletter to receive timely earnings updates on Lotus Technology and other key companies, straight to your email. Email Address About Lotus TechnologyLotus Technology (NASDAQ:LOT) engages in the design, development, and sale of battery electric lifestyle vehicles worldwide. It also distributes sports cars. The company sells its products under the Lotus brand. Lotus Technology Inc. is based in Shanghai, China.View Lotus Technology ProfileRead more More Earnings Resources from MarketBeat Earnings Tools Today's Earnings Tomorrow's Earnings Next Week's Earnings Upcoming Earnings Calls Earnings Newsletter Earnings Call Transcripts Earnings Beats & Misses Corporate Guidance Earnings Screener Earnings By Country U.S. Earnings Reports Canadian Earnings Reports U.K. Earnings Reports Latest Articles Alibaba's Earnings Just Changed Everything for the StockCisco Stock Eyes New Highs in 2025 on AI, Earnings, UpgradesSymbotic Gets Big Earnings Lift: Is the Stock Investable Again?D-Wave Pushes Back on Short Seller Case With Strong EarningsAppLovin Surges on Earnings: What's Next for This Tech Standout?Can Shopify Stock Make a Comeback After an Earnings Sell-Off?Rocket Lab: Earnings Miss But Neutron Momentum Holds Upcoming Earnings PDD (5/27/2025)AutoZone (5/27/2025)Bank of Nova Scotia (5/27/2025)NVIDIA (5/28/2025)Synopsys (5/28/2025)Bank of Montreal (5/28/2025)Salesforce (5/28/2025)Costco Wholesale (5/29/2025)Marvell Technology (5/29/2025)Canadian Imperial Bank of Commerce (5/29/2025) Get 30 Days of MarketBeat All Access for Free Sign up for MarketBeat All Access to gain access to MarketBeat's full suite of research tools. Start Your 30-Day Trial MarketBeat All Access Features Best-in-Class Portfolio Monitoring Get personalized stock ideas. Compare portfolio to indices. Check stock news, ratings, SEC filings, and more. Stock Ideas and Recommendations See daily stock ideas from top analysts. Receive short-term trading ideas from MarketBeat. Identify trending stocks on social media. Advanced Stock Screeners and Research Tools Use our seven stock screeners to find suitable stocks. Stay informed with MarketBeat's real-time news. Export data to Excel for personal analysis. Sign in to your free account to enjoy these benefits In-depth profiles and analysis for 20,000 public companies. Real-time analyst ratings, insider transactions, earnings data, and more. Our daily ratings and market update email newsletter. Sign in to your free account to enjoy all that MarketBeat has to offer. Sign In Create Account Your Email Address: Email Address Required Your Password: Password Required Log In or Sign in with Facebook Sign in with Google Forgot your password? Your Email Address: Please enter your email address. Please enter a valid email address Choose a Password: Please enter your password. Your password must be at least 8 characters long and contain at least 1 number, 1 letter, and 1 special character. Create My Account (Free) or Sign in with Facebook Sign in with Google By creating a free account, you agree to our terms of service. This site is protected by reCAPTCHA and the Google Privacy Policy and Terms of Service apply.
PresentationSkip to Participants Operator00:00:00Thank you for standing by, and welcome to the Lotus Technology Inc. Fourth Quarter and Full Year twenty twenty four Earnings Conference Call. I would now like to hand the conference over to Ms. Demi Zhang, Head of IR. Please go ahead. Demi ZhangHead of Investor Relations, Board Secretary Office, ESG Committee & Disclosure Committee Member at Group Lotus00:00:27Thank you, Dorsey. Good morning, good afternoon and good evening, everyone. Thank you for joining LotusTech's fourth quarter and the full year twenty twenty four earnings call. This is Emmy Zhang, the Head of IR at LotusTech. I'm very honored to introduce company management with us today, CEO, Qing Feng Feng and CFO, Dashie Wang. Demi ZhangHead of Investor Relations, Board Secretary Office, ESG Committee & Disclosure Committee Member at Group Lotus00:00:49On today's call, we'll start with prepared remarks from CFO and the CEO first and then kick off the Q and A session. Before we continue, please be reminded that today's discussion will contain forward looking statements pursuant to the Safe Harbor provisions of The U. S. Private Securities Litigation Reform Act of 1995 and forward looking statements involve inherent risks and uncertainties. As such, the company's actual results may be materially different from the views expressed today. Demi ZhangHead of Investor Relations, Board Secretary Office, ESG Committee & Disclosure Committee Member at Group Lotus00:01:18So further information regarding risks and uncertainties is included in relevant filings of Lotus Tech with the U. S. Securities and Exchange Commission. The company undertakes no obligation to update any forward looking statements except as required under applicable law. Please also note that our earnings press release and this conference call will include disclosure of non audited GAAP financial information as well as unaudited non GAAP financial measures. Demi ZhangHead of Investor Relations, Board Secretary Office, ESG Committee & Disclosure Committee Member at Group Lotus00:01:45Please refer to our press release, which contains a reconciliation of non GAAP measures to comparable GAAP measures, which you can find at ir.groupmotus.com. With that, I'd like to turn the call over to our CFO, Mr. Wang, please. Daxue WangCFO at Lotus Technology00:02:02Thank you. Hello, distinguished shareholders, analysts and members of the press. Thank you very much for joining our Q4 and full year 2024 learning's release. My name is Ashu Wang, Chief Financial Officer of Lotus. I would like to take this opportunity to brief you the financial results of the company. Daxue WangCFO at Lotus Technology00:02:22In 2024, the company delivered over 12,000 vehicles, reflecting a year on year increase of over 70%. For the fourth quarter, over 4,500 vehicles were delivered, representing a 20% year on year increase. We consider this as a remarkable growth considering the global trade uncertainties and economic slowdown. As for the revenue, although the fourth quarter results was narrowed by 12% year on year to US272 million dollars the company gained an increase of 36% year on year increase to $924,000,000 the full year. Another achievement we want to highlight is we have achieved a reduction in operation expenses for five quarters in a row. Daxue WangCFO at Lotus Technology00:03:10The rigid execution of efficiency enhancement plans. Now, I would like to further break down our sales by category and by region. It turns out that the lifestyle vehicles increased by 57% year on year and accounted for 57% of the total deliveries as well. By region, Europe, the home of Lotus brand, continued to expand with a year on year increase of some 180% and contributed nearly 40% of the total deliveries. China, and the second largest market, Volotis, contributed one quarter of the total deliveries. Daxue WangCFO at Lotus Technology00:03:49North America, mainly The United States, should by 415% in 2024, making up 21% of the company's total deliveries. And the rest of the world regions represented 15% of the total with nearly 90% year on year growth. For your attention, in the fourth quarter, we started to deliver EMEA in Malaysia, Thailand, Singapore, UAE and Philippines. For the key financial indicators, deliveries and revenues are being reported. I will now repeat here. Daxue WangCFO at Lotus Technology00:04:28The cost of revenues increased to $395,000,000 and $3.00 $1,000,000 for the full year and for the fourth quarter respectively. As a result, the gross profit margin was lower to 3% for the full year and back to 11% for the fourth quarter. We reported an operating loss of $736,000,000 for the year and $189,000,000 for the fourth quarter. Net loss was accrued to $11.00 $7,000,000 for the full year and $441,000,000 for the fourth quarter. For your information, adjusted net loss adjusted under the non GAAP measures were not much too different. Daxue WangCFO at Lotus Technology00:05:11Then I'll first stop here and hand over the speaker to Mr. Feng. Qingfeng FengCEO & Director at Lotus Technology00:05:26Hello, everyone. I'm CEO of LotusTech, Feng Qingtong. Allow me to share our key achievements in the year of 2024. Our performance overall is better than the broader luxury market. We have ranked the top among British luxury car brands with over 12,000 vehicles delivered in 2024, a 74% better compared with our performance in 2023. Qingfeng FengCEO & Director at Lotus Technology00:06:25Currently, we have four models under delivery. We have one SUV, one sedan or rather GT, and two sports car, including a mirror and also Last year, we keep exploring our international footprint. We have entered into more than 10 countries in GCC region, Asia and Oceania. In addition to that, we have also been keeping cost reduction and also efficiency improvement, And we've been achieving operating expense reduction for five consecutive quarters. Besides, we have also launched our theory one concept car. This is a revolutionary concept car Qingfeng FengCEO & Director at Lotus Technology00:07:48made with sustainable materials to redefine luxury, and we have gained wide recognition from our press friends. For this particular vehicle, it has defined our direction for our future models, particularly on its design language and also its sustainable principles. As for our progress on ESG, we were honoured as highly commenced at Ruta's Sustainability Awards twenty twenty four, leading the EV industry within Rooter's Vision 02/1945 campaign. Lotus was the winner of the 2024 EUCCC Sustainable Business Award and the Green App Award for Outstanding Environmental Practices. Our sustainable supply management case was also included in Shanghai Climate Week twenty twenty four Climate Tech In Focus report, and this report was also released at COVID-nineteen. Qingfeng FengCEO & Director at Lotus Technology00:09:47As for our recent development in 2025, we have already delivered more than 12,000 vehicles in the first three months, and as for the cells at the end, we have already delivered more than 2,000. In the past, the LOTUS in China was called the English pronunciation of LOTUS, hence we have to use NYO as part of our logo. But in January 2025, we have successfully reclaimed the proprietary rights of LOTUS iconic logo, LOTUS wordmark and the Chinese character of Lotus Lianghua in China, ensuring consistency in terms of its trademark across the world. In addition to that, we have also made a model facelift for our ELETRA and EMEA. Specifically in February, we have refreshed the lineup of those two models with upgraded configuration and competitive pricing. Qingfeng FengCEO & Director at Lotus Technology00:11:56In China, the vehicle has been delivered starting from February, and in quarter two, the delivery will also commence in EU and the rest of the world. Besides, we have also launched the MATLAB urban NOA navigation on autopilot in 16 cities across China in February. The system can effortlessly achieve lane changing seamless transition between highways and city roads use and factor intersections, intelligent lane selection, and smart obstacle avoidance. Starting in February, we have also started our OTA to push this function to our end customers. This is then can make our vehicle to be able to deliver door to door intelligent driving. Qingfeng FengCEO & Director at Lotus Technology00:13:28Starting from quarter two, this function will be available in more than 100 cities in China through OTA. In March, Lotus Intelligent Driving Arm, Lotus Robotics, has also established a strategic partnership with Taosao Mobility to launch an innovative intelligent mobility platform for robotaxi. We have also started a pilot operation in the city of Hangzhou and the city of Suzhou. In addition to that, Lotus Technologies Natural Capital Assessment project was also included in World Economic Forum report, which demonstrated our ambition and also our progress in sustainable development, particularly among luxury vehicles. On 04/14/2025, we have received the exercise notice from Chile requiring Lotus Tech to purchase 61% of the equity interests in Lotus UK, according to the put option agreement dated 01/31/2023 between the parties. Qingfeng FengCEO & Director at Lotus Technology00:16:08If we can exercise this put option, we will be able to operate on two factories, Hatho factory in The UK and Wuhan factory from China. Those two factories can cover four regions, Middle East, APAC, Europe, China and North America. As per the exercise of a put option from Geely, Lotus expects to acquire 50% of equity interest in Lotus UK through a non cash transaction based on pre agreed valuation methodology. Upon completion, Lotus will gain control over Lotus UK and consolidate its financial results. The strategic transaction will enable the company to integrate all global businesses under Lotus brand. Qingfeng FengCEO & Director at Lotus Technology00:17:37Subject to potential regulatory approvals, the acquisition is expected to be completed in 2025 this year. As for our product pipeline, Evaya, this is our hypercar, it has a limited offering of 130 vehicles globally. We have already started the delivery of this hypercar. And moving on to our Emera sports car. The US market is the biggest market for Emera, and this vehicle has also been available for global other markets. Qingfeng FengCEO & Director at Lotus Technology00:18:59This year, we are going to launch a model year '26 for EMERA. It will be dedicated to The US market and also meets the compliance requirements for other markets. In 2027, we are planning a major uplift for EMERA. It will have more horsepower. It will also be compliant to EU seven emission requirements. Qingfeng FengCEO & Director at Lotus Technology00:19:42As for our lifestyle vehicles, Electra and EMEA, previously, I briefly mentioned about it that we have already commenced the delivery in China for model year '26, and the delivery for EU, UK, and the rest of the world will also start in quarter two. At the end of this year, in other words, at the end of twenty twenty five, we are planning to launch a PHEV. We would call it a hyper hybrid model. This model will start delivery first in China in quarter one next year. In 2027, we are also planning another new model. Qingfeng FengCEO & Director at Lotus Technology00:20:53And by adding this new model together, we would be able to deliver our vision of a Vision 80 strategy. In other words, we will have six models in total. And that's all I'd like to share with you. Thank you. Demi ZhangHead of Investor Relations, Board Secretary Office, ESG Committee & Disclosure Committee Member at Group Lotus00:21:12Well, thank you, and CFO. Darcy, we are ready for Q and A, please. Operator00:21:19Thank you. Your first question comes from Kevin Kolelo from Tier one Systems. Please go ahead. Analyst00:21:41Hey. Good morning, everyone. Thank you for taking my call. I'm calling as a Lotus investor, as someone who opened an exotic car dealership here in California about eleven years ago, and most of all as a car enthusiast. And basically, really my question is, is there any plan? Analyst00:22:00It seems like you have a really amazing opportunity with the Emera to create something that would be highly in demand here in The U. S. Market, which would be something that's lighter weight than currently exists right now in the Emera, maybe adding carbon ceramic brakes, carbon bucket seats, some other things to remove a couple hundred pounds. And also increasing, the horsepower and red line on the v six, which is an amazing engine. It sounds great. Analyst00:22:27If you look at Porsche, they really have kind of created the recipe that everyone else, I think, should follow. If you look at what the GT3s and the GT3 RSs sell for, mean, they're going for a hundred thousand over MSRP right now. They're almost impossible to get. I'd be curious to know, do you have any plans of creating just really like a hardcore, maybe an Emera R with a high revving V six manual transmission, lightweight? I think that would do amazingly well here in The US market. Qingfeng FengCEO & Director at Lotus Technology00:23:18Thank you for your question. I think it's a brilliant suggestion and intact. US is the largest market of MIRROR. Almost 50% of MIRROR cells are all coming from The US, and particularly our Abasix model very much preferred by our US consumers. Well, we are very clear that our US consumers would prefer engine or model with a higher horsepower and higher RPM. Qingfeng FengCEO & Director at Lotus Technology00:24:41As a matter of fact, we have another model available in The US market, the two point zero turbo model. It has also a relatively high horsepower. At the very beginning, we were quite concerned about our US consumers that they may only prefer the V six model instead of the two point zero turbo model. However, after our consumers testing drive the two point zero turbo model with also 400 horsepower, Our consumers have really liked it, particularly with its power consistent ACT transmission and a very fast response. As for V six, we, to be honest, do not have the plan to further increase its power because this engine will not be compliant for EU7 emission. Qingfeng FengCEO & Director at Lotus Technology00:26:05However, we are investigating a new powertrain system, which is a V eight. It will have a bigger horsepower and we are currently investigating the feasibility of a V eight. And actually, this year in Europe, we have launched some limited edition with less weight like the suggestion that you mentioned that we put more carbon fiber materials on it. And we will consider to see if we are going to launch similar models in The US market. Thank you for your passion for Lotus. Qingfeng FengCEO & Director at Lotus Technology00:27:08Also, thank you for your great suggestion. Analyst00:27:12Thank you very much. Appreciate it. Operator00:27:16Thank you. Your next question comes from Laura Lee from Deutsche Bank U. S. Please go ahead. Laura LiEquity Research Associate at Deutsche Bank00:27:24Hey. Well, thank you for taking my question. So my first question is about the ADAS revenue. So what's this like contribution over the last year? And any update on the guidance? Laura LiEquity Research Associate at Deutsche Bank00:27:39Any new design win you're working on? Yeah, that's my first question. Demi ZhangHead of Investor Relations, Board Secretary Office, ESG Committee & Disclosure Committee Member at Group Lotus00:27:46Thank you, Laura. I will invite CFO to give your answer. Our first question is on the revenue guidance. Daxue WangCFO at Lotus Technology00:27:57So you mean for the 2025, right? Yes. Okay. So if you're like, we have data plan, which is going to be, you know, like we have improvements compared to the 2024. Let's say we are waiting for further approval from the board of directors. Demi ZhangHead of Investor Relations, Board Secretary Office, ESG Committee & Disclosure Committee Member at Group Lotus00:28:21Thank you. And Laura's second question, I remember the question on the revenue on the RobomTX. Daxue WangCFO at Lotus Technology00:28:30Okay. So for the robotics, actually we achieved improvement compared to the one year before. And we gained not only the internally we got the revenue from the Lotus, we also gained some customers from the outside of the company and also outside from the GD Group. So overall, it achieved like $22,000,000 the customers outside the Lotus. So that's something like meanwhile, our gross profit margin, I think we have a pretty high margin compared to the sales of goods. Daxue WangCFO at Lotus Technology00:29:19I mean, we are going to be able to keep this number in this year. So that's basically the revenues from the robotics side. Laura LiEquity Research Associate at Deutsche Bank00:29:34Okay. Okay. Got you. My second question is around like the margin trajectory, as you mentioned for this year and '26. Are there any like hard win or tail win on a year on year basis we should consider? Laura LiEquity Research Associate at Deutsche Bank00:29:52And also thinking about the tariff situation, are there any like changes on production arrangements that you're considering? Demi ZhangHead of Investor Relations, Board Secretary Office, ESG Committee & Disclosure Committee Member at Group Lotus00:30:06Yeah, thank you, Laura. Her first question is on the margin trajectory for this year and the next year. And also considering the tariff situation, is there any changes? Okay. Daxue WangCFO at Lotus Technology00:30:18So I think the margin is good. It might improve this year compared to last year. Last year, first there is a trade in uncertainties. And also like we have the stock so we're so we're facilitating, you know, the stock clearing plans, so which cost our profit margin, you know, to lower compared to the one year before. But this year, I think the first day they I mean, where the stock plan is going to be much is over and we no longer have this stock, you know, clearing requirements. Daxue WangCFO at Lotus Technology00:30:51I mean, well, we have a much better product cost structure. So that means probably the gross profit margin is going be much better So that's my expectation for the year 2025. Demi ZhangHead of Investor Relations, Board Secretary Office, ESG Committee & Disclosure Committee Member at Group Lotus00:31:20Excuse me. Do you mind repeating your last question on the tariff? Sorry, your voice was very far away. Laura LiEquity Research Associate at Deutsche Bank00:31:29Oh, yeah. Yeah, so the second part is around, like to the impact of tariffs and any like mitigation you're considering, like changes on production arrangement or this sort of solution. Demi ZhangHead of Investor Relations, Board Secretary Office, ESG Committee & Disclosure Committee Member at Group Lotus00:31:47Thank you. Qingfeng FengCEO & Director at Lotus Technology00:32:14Well, currently we have been affected by The US unbelievably high tariff, particularly for our lifestyle vehicle, which is produced in China. As our lifestyle vehicle have already stopped its export into The US market. However, our sports car, which is produced in The UK, has not been affected yet. We're still investigating the market and also we are still doing analysis. Laura LiEquity Research Associate at Deutsche Bank00:32:45Okay. Got you. Yeah, that's helpful. Demi ZhangHead of Investor Relations, Board Secretary Office, ESG Committee & Disclosure Committee Member at Group Lotus00:32:49Thank you, Laura. Operator00:32:52Thank you. Your next question comes from Eunice Yang from MSIM China. Please go ahead. Analyst00:33:04Hi, thank you for taking my question. I have two questions actually. First one is, what are the contributing factors behind the significant decline in gross profit in the fourth quarter of twenty twenty four? And how much did the intelligent driving and the bespoke service contribute to the service revenue and the gross profit in this fourth quarter? Demi ZhangHead of Investor Relations, Board Secretary Office, ESG Committee & Disclosure Committee Member at Group Lotus00:33:29Thank you, Roy. I will invite CFO, Mr. Wang. Daxue WangCFO at Lotus Technology00:33:33Yeah. So basically the fourth quarter performance, as do tell, has some decline. It's because we clearly, you know, the stock. And meanwhile, like the I heard that this is from the tariff. I mean, while for the intelligent driving business, there's accounting rules exchange change because of the they changed the booking policy from the cash basis to the accrual basis in the fourth quarter. Daxue WangCFO at Lotus Technology00:34:06So this results in some adjustment, accounting adjustment in the figures. So you can tell from the for the fourth quarter of the sales, the revenues from the services, you can see the change. So basically, about starting from this year, we already under the new accounting policies. The gross margin is going to be recovered. And meanwhile, in the service sector, we're going to align the driving business with the industry benchmark. Daxue WangCFO at Lotus Technology00:34:42So thank you. Qingfeng FengCEO & Director at Lotus Technology00:34:45Okay. Thank you. And also, I'd like to comment that in 2025, our gross margin is going to be greatly improved due to our launch of model year '26. As I previously elaborated, the model year '26 will be launched in Europe, including EU and UK in quarter two, and those are two markets that actually accounted for more than 40% of our total sales. So, by launching model year '26, it can help us to improve our gross margin. Analyst00:35:58Okay, thank you. I have a second question is, what is the revenue and profit margin of the Intelligent Driving business in the past year 2024? And any guidance for this following year '20 '20 '5 and midterm revenue and profit margin for vehicles and or the comprehensive service respectively, what is the plan to improve the margin? Yeah, that's my final question. Thank you. Daxue WangCFO at Lotus Technology00:36:24Yeah. The benchmark margin for the intelligence driven business is about like 30%. So it's in line with the industry standard. So starting from this year, we are going to not only to improve the margin also, are going get more clients, more business from the market. So I think they are going to further lower the cost thereby increasing the profit margin. Analyst00:36:54Okay. Thank you. Demi ZhangHead of Investor Relations, Board Secretary Office, ESG Committee & Disclosure Committee Member at Group Lotus00:36:57Thank you, Roy. Operator00:37:00Thank you. Your next question comes from Tom Lu from Capital Sunrise. Please go ahead. Analyst00:37:08Thank you for taking my questions. Up to you. The first one is, what's the cash burn rate now and how long is the runway? Is there any significant financing we can expect in the next six months? Daxue WangCFO at Lotus Technology00:37:24Yeah. As you can tell from like our financial performance, we do have, you know, the gap in terms of the cash. And also, we are making the cash gap, you know, field through the operation, through the investment plan, through the financing. And we are being closely contacting the in the market. So please take a close look at our announcement and also the company release. Daxue WangCFO at Lotus Technology00:37:53Thank you so much. Demi ZhangHead of Investor Relations, Board Secretary Office, ESG Committee & Disclosure Committee Member at Group Lotus00:38:00Tom, you have another question, Yes. Analyst00:38:04My second question is about the management capabilities. So, we've noticed the recent management shifts. And would you mind to share the rationale behind? And what makes the current management team the right one to turn around a luxury company? Thank you. Qingfeng FengCEO & Director at Lotus Technology00:38:55As far as recent management change, we do have welcomed a new CFO, Wang Da Xue. He had a rich experience in finance and also capital markets. In addition to that, also had a great performance in Geely. And another thing I'd like to comment is about the change of the head of sales in China. We have introduced a new China Sales President, Qing Pei Chi. Qingfeng FengCEO & Director at Lotus Technology00:40:03He had also a rich experience in luxury products, particularly with Volvo. During his time with Volvo, helped the Volvo sales volume increase from 80,000 to 90,000 to more than 180,000 to 190,000 significant jumps. And overall, I just want to say that for our entire management team, we are we have a seasoned and also rich experience when it comes to luxury brand management. As for Ms. Mao Jin Guo, she previously had a really rich experience with Benz and also Lincoln, and now she is responsible for closest coordination of herself and operation and brand and marketing collaboration covering the regions such as The EU, US and APAC. Qingfeng FengCEO & Director at Lotus Technology00:41:38The ultimate target is to ensure viral load is consistency. As for our Chief of Brand Officer or Chief of Creative Officer, Ben Payne, he remains at this position, and he created a lot of brilliant content for us and also the sensational concept to car if you rewind that I previously mentioned. He is also created by him. As far as our head of sales in The US, he was COO with Mr. Rasi, so he can bring us a lot of great experiences that he previously gained. Qingfeng FengCEO & Director at Lotus Technology00:42:47Thank you. Operator00:42:53Thank you. There are no further questions at this time. I'll now hand back to Ms. Zhang for closing remarks. Demi ZhangHead of Investor Relations, Board Secretary Office, ESG Committee & Disclosure Committee Member at Group Lotus00:43:01Darcy, do you want to remind everybody how to raise their questions if there's any more? Yes. Sure. Have a couple of minutes left. Operator00:43:18You. We have a question from George Tang from Elson Capital. Please go ahead. Analyst00:43:23Hi, good morning. Thanks everybody for your time this morning. I have three quick questions for management. First question is can management kindly give a high level guidance on how the put option will impact the company's financials, you know, such as the balance sheet, cash flow, and p and l? It appears there's pretty high debt asset ratio of over 130% by end of twenty twenty four. Analyst00:43:52How will the acquisition change that number? Thank you. Demi ZhangHead of Investor Relations, Board Secretary Office, ESG Committee & Disclosure Committee Member at Group Lotus00:43:57Thank you, George. I will first invite CFO to give you some color on the question. Daxue WangCFO at Lotus Technology00:44:03So regarding the execution of the put option, whereas do you do the daily list? I'm talking with the with lot of UK. So I think we are going to release the results in the time if it's done. For funding you just mentioned, it's going to be a noncash deal. So it's not going to bring the cash to the company. Daxue WangCFO at Lotus Technology00:44:32And overall, I think the answer to your question, we can wait until we finish the investigation and then we get the deal done. So please take a closer look at our, you know, further notice. Thank you very much. Perfect. Analyst00:44:48Thank you. And I I have another question perhaps. This this has been burning the back of many people's minds. But I was wondering what is Lotus' US strategy, market strategy, you know, given the current geopolitical tensions and terrorist situation. And having said that, what do you think will be your target sales for U. Analyst00:45:13S. Market in this year? Thank you. Demi ZhangHead of Investor Relations, Board Secretary Office, ESG Committee & Disclosure Committee Member at Group Lotus00:45:17Thanks, George. I will invite CEO to answer your question. Qingfeng FengCEO & Director at Lotus Technology00:45:53Yes, in 2025, it is going to be tougher, but particularly we are affected by our lifestyle vehicle remaining affected by the tariff hike. As far as sports car, we were slightly affected, so we haven't actually changed our original plan for our sports car sales in The US. We expect about roughly 200 to 300 sales more because of the tariff in The US. Currently, we're also exploring our paths and the solutions for The US market and because The US market is the biggest market of luxury premium vehicle segment, in addition to that, Salotis also has relatively high brand awareness in The US market. So, definitely US market will be one of our priorities. Qingfeng FengCEO & Director at Lotus Technology00:47:33In addition to that, we will also keep exploring our feasibility of exporting lifestyle vehicles to The US market. And at this moment, we will not be able to disclose any details, but please feel free to stay tuned to our future announcements. The only thing that I may add is that manufacturing in The US could be one of our potential solutions. Operator00:48:20Thank you. Once again, if you wish to ask a question, please press 1 on your telephone and wait for your name to be announced. We'll now pause a moment to allow for any final questions to register. There are no further questions at this time. Demi ZhangHead of Investor Relations, Board Secretary Office, ESG Committee & Disclosure Committee Member at Group Lotus00:48:49Yeah. Thank you, Darcy. Well, given the time constraint, I think we will conclude the call very soon. But everyone, thank you very much again for joining us today. If you have any further questions, please feel free to contact our IR team. Demi ZhangHead of Investor Relations, Board Secretary Office, ESG Committee & Disclosure Committee Member at Group Lotus00:49:04And this concludes the call. Have a very good day, everyone, and thank you very much again. Bye. Operator00:49:12Thank you. That does conclude our conference for today. Thank you for participating. You may now disconnect.Read moreParticipantsExecutivesDaxue WangCFOQingfeng FengCEO & DirectorAnalystsDemi ZhangHead of Investor Relations, Board Secretary Office, ESG Committee & Disclosure Committee Member at Group LotusAnalystLaura LiEquity Research Associate at Deutsche BankPowered by