Lotus Technology Q1 2025 Earnings Call Transcript

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June 25, 2025

Key Takeaways

  • In Q1, distributor deliveries fell 42% YoY to nearly 1,300 vehicles, though end-user deliveries rose over 10% YoY to more than 2,000 units amid model transition and destocking.
  • Revenue narrowed to $93 million in Q1, while gross margin recovered to 12% from negative territory last quarter.
  • Operating expenses were reduced for six consecutive quarters, driving a 56% YoY decrease in operating loss and a 29% reduction in net loss.
  • The company is rolling out upgraded Electro HyperSUV and EMEA Hyper GT models in China in Q2 and Europe in Q3, supported by a new GT1 racing series to enhance brand awareness.
  • Lotus unveiled the world's first mass-produced performance-oriented hyper hybrid PHEV with 300 km pure EV range, over 1,000 km combined range, and ultra-fast on-drive charging, debuting end of this year and delivering in Q1 2026.
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Earnings Conference Call
Lotus Technology Q1 2025
00:00 / 00:00

There are 3 speakers on the call.

Operator

Day, and thank you for standing by. Welcome to Lotus Technology Inc. First Quarter twenty twenty five Earnings Conference Call. At this time, all participants are in a listen only mode. Please be advised that today's conference is being recorded.

Operator

I would now like to hand the conference over to Ms. Demi Zhang from the company. Please go ahead.

Speaker 1

Thank you, operator. Good morning, good afternoon, and good evening, everyone. Thank you for joining LotusTech's first quarter twenty twenty five earnings call. This is Danny Zhang, the Head of IR at LotusTech. I'm honored to introduce and welcome company management with us today, CEO, Mr.

Speaker 1

Qingfeng Feng and the CFO, Doctor. Dashie Wang. 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.

Speaker 1

Forward looking statements involve inherent risks and uncertainties. As such, the company's actual results may be materially different from the views expressed today. Further information regarding risks and uncertainties is included in relevant filings of Lotus Tech with the U. S. Securities and Exchange Commission.

Speaker 1

The company undertakes no obligation to update any forward looking statements except as required by law. Please also be noted that our earnings press release and this conference call will include disclosure of unaudited GAAP financial information as well as unaudited non GAAP financial measures. You can find a reconciliation of these figures in the press release available on our Investor Relations website at ir.grouplotus.com. With that, I'd like to turn the call over to our CFO, Doctor. Wang.

Speaker 1

Doctor. Wang, please.

Speaker 2

Good day and good evening. Distinguished shareholders, analysts and members of the press, thank you very much for joining our Q1 twenty twenty five earnings release. This is Daxi Wang, the Chief Financial Officer of Delotus. I'm honored to take this opportunity to brief you on the company's unaudited financial results. In Q1, the company delivered nearly 1,300 vehicles to the distributors, down 42% year on year.

Speaker 2

And the user vehicle deliveries exceeded 2,000 units, up by more than 10% year on year. These numbers reflect the scheduled transition period if our upgraded model started delivery in Q2. It added to the effect of the prior destocking activities in the Q4 last year. As you may know, we started revamping our Electro HyperSUV and the EMEA Hyper GT Landmap with upgraded configurations. We kicked off customer delivery on these upgraded models in China during the second quarter and expect to begin deliveries in Europe in the upcoming third quarter.

Speaker 2

Although quarterly revenues narrowed to $93,000,000 in the first quarter, the company achieved a notable gross margin recovery, improving from the negative Q4 last year to the current 12%, placing us firmly in positive territory as we impact from prior destocking effects eased. Now, I'll break down our sales by category and by regions. By category, lifestyle vehicles accounted for 56% of the total Q1 deliveries consistent with the full year 2024 figures. By region, Europe, China, and North America each contributed approximately onethree of the company's total deliveries, while the rest of the world region accounted for the remaining 4%. Regarding our sales channels, the total number and the composition of the sales stores by region remained stable during the first quarter.

Speaker 2

For the key financial indicators, deliveries, revenue and gross margin, profit margin have just been reported. Cost of revenue decreased by 43% year on year to US82 million dollars Consequently, gross profit was US11 million dollars We reported operating loss of US103 million dollars for quarter one, a fifty six year on year decrease. The net loss of the quarter was US183 million dollars representing a 29% reduction. For your information, the adjusted net loss under the non GAAP measures for the quarter was unchanged. Behind these financial numbers, we want to highlight our achievements of reducing operating expenses for six consecutive quarters, driven by continued rigorous implementation of efficient enhancement plans.

Operator

And now I

Speaker 2

will stop here and hand over to Ms. Feng. Thank you.

Operator

Hello, my name is Feng Qing Feng, CEO of Allow me to share with you the most recent business progress and the strategies of Lotus. As a premium brand, we highlight the importance of brand establishment, particularly on sports car. And this is something that we have been doing this year on racing track. On May 30, we launched a national level GT1 make racing series Lotus car. It features five rounds spanning China and Malaysia.

Operator

We successfully completed the first race in the city of Chengdu. The racing series stands as China's premier FIA recognized GT series, eligible for international C license upgrade. Among our customer group of Lotus, may highlight the vehicle's aesthetic styling and the performance of the vehicle. And this is why this year we've been spending most of our efforts on the performance side. As Ultimate's handling and riding iconic features of Lotus, we've been trying to stand out among other premium brands.

Operator

And this is also one of the reasons that this year we are trying to leverage a raise series to improve our brand awareness. And on May 26, we have also released our twenty twenty four years to report, highlighting our progress in advancing sustainable practices, developing innovative green products, and demonstrating global leadership in clean mobility. Back in 2024, we have launched a new technology called hyper hybrid EV technology. This has gained a lot of interests. And what I can show you is that the progress of this technology is very good.

Operator

And later I will elaborate more on the details. As for our product pipeline and the product planning, our Emera model year '26 has already started its delivery in August as the vehicle will commence its delivery in The US. In April, we've also started to deliver our ELETRA and EMEA model year '26. It has started in China market first, and then we are going to commence the delivery in The EU. In recent years, premium brands BEVs penetration does not tally our expectation.

Operator

However, the interest on PHEV is gaining its momentum. We believe that such a technology of the hybrid can supplement the disadvantages of BEV. For customers who like ICE, they can still enjoy the drivetrain. For customers who remain fond of BEV, they can feel free to worry about the range. Our new model is expected to debut at the end of this year and the delivery of this vehicle is expected to happen in quarter one next year.

Operator

And allow me to share with you some of the highlights of this particular model. Performance will still remain our iconic feature for this model. And this vehicle is going to be the world's first mass produced PHEV that is performance oriented. Particularly in the market with the low penetration rate of a BEVs such as APAC and Middle East, we believe that such a hyper hybrid technology could be widely accepted in those markets. And this hyper hybrid technology features a 300 kilometers of range when it is driven by the pure electric battery.

Operator

And in high speed, for example, the combined driving range can reach over 1,000 kilometers. In addition to that, it also features a dual hypercharging technology, ultra fast parking charging and ultra fast on the drive charging. On the drive charging rate is five times the power consumption of typical driving scenarios. It can deliver a battery charge from 10% to 80% within twelve minutes, pretty much on par with the battery swap speed. As we are very highlights on the performance side of this vehicle, It can deliver the ultimate performance under any circumstances, even though the battery may cost you lower than 5%, the performance can still be secured.

Operator

And this is why that's why I previously highlighted the features that on the drive charging rate is five times the power consumption of typical driving scenarios. Again, this world's first performance oriented hyper SUV is going to debut at the end of this year and the delivery will start next quarter one. Our initial target is to deliver a balanced delivery distribution across our markets, 30% in The U. S, 30% in EU, 30% in China, and 1% in rest of the world. Between 2023 and 2025, the main challenges around The US tariff hike, which led us not to be able to export many vehicles to The US market.

Operator

Given that, the current regional share of deliveries since 2024 are as follows: 22% in North America, 38% in Europe, 14% for the rest of the world, and 26% for China. And this year we are expecting the China's contribution is going to be a bit higher compared with the previous year. In the future, we are trying to leverage our US strategy to catch up the losses due to the tariff hike. At this moment, we are discussing with our strategic partners in The US on localization plans in order to avoid the influence of US tariffs. With our strategic partners, we had an in-depth discussion around US landscape, and we believe that localization is a feasible plan.

Operator

We'll continue to explore U. S. Markets with our PHEV and also BEV products.

Speaker 2

Okay. Thank you, Oishi.

Speaker 1

Well, thank you very much, Mr. Fan and Doctor. Wang. Due to the time constraints, will not be holding a Q and A session today. However, we have received a number of questions regarding the progress of our hyper hybrid initiatives and our global market strategies.

Speaker 1

So to address these key topics, I'd like to invite Mr. Feng to share more of his insights. Mr. Feng, please.

Operator

For our PHEV products, I'd like to start with our observation regarding the PHEV market. It's actually growing very fast in both China and The US. And for Lotus PHEV, it is actually quite different from the traditional PHEV structure, which is engine driven. We combined the advantages of ICE engine and also electric motor. It can deliver ultimate performance when it is needed for our customers.

Operator

For example, on high speed driving, if it is driven by the motor, it may not be that energy saving. And for our technology, when you drive on the high speed, this vehicle can be driven by engine. And in total, the technology can deliver both performance and energy saving features, and it can satisfy the scenarios of a lifestyle as well as a racetrack. For the hyper hybrid technology at this moment, it has been widely proven and accepted in China market. And we have also done a thorough study for The US and EU markets.

Operator

At this moment, there hasn't been such a product existing in those markets. But if our customers are well aware of this product, we believe that they will be interested in this particular model because it can satisfy both the demands from performance vehicle as well as lifestyle vehicle. In the future, our technology is going to be peephered around this hyper hybrid technology. And at this moment, we are also investigating the feasibility of a sports car hyper hybrid solution. For sports car, we understand that there is a wide market for the ICE sports car and we will definitely satisfy those Ritter's fans and also Patriot Head for the sports car.

Operator

At the same time, we also understand that pure electric sports car is not going to attract those attention. So we are trying to investigate the feasibility of a hyper hybrid sports car to see if it is going to work. The future, we will prioritize the hyper hybrid technology for both lifestyle vehicle and the sports car. If you look at the history of Lotus, I think many of you may be aware that Lotus have been relying on external parties or suppliers on its engines such as Toyota and AMG. However, when it comes to PHEV, when Lotus possesses such a technology, we believe we can supplement to the drawback of the ICE, of the lack of ICE engine.

Speaker 2

Thank you.

Speaker 1

Thank you very much, Mr. Feng, for your sharing of the insights. And again, thank you all for joining us today. We'll conclude the call soon. If you have any questions, please feel free to contact our IR team.

Speaker 1

This concludes the call. Have a good day, everybody. Thank you.

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