Lotus Technology Q2 Earnings Call Highlights

Key Points

• Lotus Technology’s first-half performance improved: Deliveries rose 39% to 3,904 vehicles and revenue increased 23% to $268 million, while gross margin reached 10% and adjusted EBITDA losses narrowed 57% year over year.
• China and the Eletre X plug-in hybrid drove growth: China deliveries increased 60% and accounted for 58% of total deliveries, with the Eletre X generating 2,200 cumulative orders and more than 1,800 deliveries. Lotus expects to expand the model into Europe and the Middle East, where it anticipates higher margins than for pure-electric vehicles.
• Lotus is targeting long-term scale and profitability: Its Focus 2030 plan calls for 30,000 annual vehicles, gross margins above 20% and positive EBITDA, supported by Geely synergies and the acquisition of Lotus UK. Management cautioned that near-term consolidation costs could widen losses, while the company plans a mid-engine hybrid Type 135 sports car for 2028.

Lotus Technology NASDAQ: LOT reported higher first-half deliveries and revenue for 2026, while narrowing its operating and net losses as the luxury automaker emphasized its new multi-powertrain strategy, cost controls and integration with Lotus UK and the Geely ecosystem.

The company delivered 3,904 vehicles in the first half, up 39% from a year earlier. Revenue increased 23% to $268 million, supported by delivery growth and momentum in China. Average selling price declined 3% year over year, which Chief Financial Officer Daxue Wang attributed to a greater proportion of deliveries from the lower-priced Eletre X plug-in hybrid model.

Gross margin improved to 10%, up 1.6 percentage points from the prior-year period, while gross profit rose 47% year over year to $26 million. Wang said the improvement reflected product-mix changes, supply-chain synergies and scale benefits that reduced per-vehicle manufacturing costs.

Losses Narrow Amid Cost Controls

Lotus said its operating loss narrowed 63% year over year to $95 million in the first half. The company said the result included a one-time licensee refund related to product-pipeline adjustments. Excluding one-off effects, operating loss narrowed 26% to $195 million, according to Wang.

Adjusted EBITDA loss narrowed 57% to $104 million, compared with a $240 million loss a year earlier. Operating expenses fell 46% to $127.5 million, although the reported figure included the impact of the one-time item. Excluding that adjustment, research-and-development expense was $96 million, up 4% year over year, driven by investment in the Eletre X. Selling and marketing expense increased 5% to $83 million as sales commissions and launch-related marketing costs rose, while general and administrative expense declined 27% to $46 million.

Wang said Lotus intends to pursue profitability through product positioning, mix optimization and cost-reduction measures. He added that more than 50% of components in its lifestyle vehicles are shared with Geely, enabling the company to use Geely’s centralized procurement and supplier network.

China Leads Delivery Growth as Eletre X Ramps

Lifestyle vehicles represented 77% of Lotus deliveries during the period. China deliveries rose 60% year over year and accounted for 58% of total deliveries, remaining the company’s largest market. Deliveries outside China increased 17.4%, including 45% growth in the Americas and 164% growth in other regions. European deliveries declined 17% amid intensifying competition in luxury battery-electric vehicles.

Chief Executive Officer Qingfeng Feng said the Eletre X, known in China as For Me, has been central to the company’s domestic performance. As of June 30, Lotus had received 2,200 cumulative orders for the model in China and delivered more than 1,800 units. The company said 63% of buyers were new Lotus customers and more than 70% selected higher-specification versions.

Feng said Lotus’ share of China’s passenger vehicle market above RMB 500,000 reached nearly 2% in the second quarter following the model’s late-March launch. The company plans to begin Eletre X deliveries in Europe during the fourth quarter and in Middle East markets in December. U.K. launches are planned for mid-2027.

Management said it expects the hybrid model to generate a higher gross margin than its pure-electric vehicles because of its smaller battery pack, lower bill-of-materials cost, platform sharing with Geely and expected scale improvements as production reaches steadier volumes.

Focus 2030 Targets Volume Growth and Profitability

Lotus outlined its Focus 2030 strategy, which centers on preserving its performance-oriented brand identity, offering electric, hybrid and internal-combustion powertrains, expanding operational synergies and improving financial results.

• Annual sales volume target of 30,000 vehicles as the portfolio matures.
• Sales-volume compound annual growth rate target of 36% from 2025 through 2030.
• Gross-margin target above 20% by 2030.
• Combined selling, general and administrative, and R&D expenses targeted at less than 25% of revenue by 2030, with EBITDA turning positive.

The company said it operated 217 retail locations as of June 30, including 65 in China, 60 in Europe, 53 in the Americas and 39 in other markets. Management said it is expanding and refining its dealer network, including in South America, northern China, the Middle East and the Caucasus region.

Lotus UK Acquisition and Future Product Plans

Feng said Lotus completed its acquisition of Lotus UK on Aug. 21 and is accelerating integration under its “One Lotus” strategy. Wang said the combination is expected to bring together Lotus UK’s sports-car operations and Lotus Technology’s lifestyle-vehicle business, with shared R&D, manufacturing and supply-chain functions intended to reduce costs and improve efficiency.

Wang said consolidation will result in full gross vehicle revenue recognition for Emira sales in the U.S., where proceeds previously were recorded on a net-revenue basis, and will add Lotus UK vehicle and service revenue. However, he said the near-term consolidation of Lotus UK’s R&D, administrative and other costs could widen group-level losses.

The company expects to provide retrospectively restated 2025 financial statements no later than the release of its 2026 annual report.

Lotus also plans to introduce the Type 135 mid-engine hybrid sports car in 2028. Feng said the vehicle is expected to offer V6 and V8 variants, with the V8 version targeted to produce more than 1,000 horsepower while weighing around 1.5 tons. Management said the model is intended to bridge the Emira and Evija in Lotus’ sports-car portfolio and support both brand positioning and profitability.

Looking ahead, Wang said chip-price volatility raised bill-of-materials costs by nearly 2% in the first half. Lotus is working with Geely to broaden its supplier base and optimize costs, and management expects automotive-grade chip supply and demand to rebalance around late 2026 or early 2027.

About Lotus Technology (NASDAQ:LOT)

Lotus Technology Inc 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.

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