Lotus Technology Inc. American Depositary Shares Q2 FY2025 earnings call

• Funding: On August 19, 2025, entered into a security purchase agreement with ATW Partners for up to USD 300 million convertible notes, and secured funding from Geely via a master credit facility framework agreement on July 28, 2025.
• Marketing: In July 2025, announced return to Goodwood Festival, unveiled Emira Cup race car, exhibited concept vehicle Theory 1 and full lineup including Hypercar Evija, etc.
• Product Pipeline: Model year '26 Emira rolling out globally next month; plug-in hybrid production starts end 2025, market entry deliveries Q1 next year starting in China; Vision X project to launch in 2027; Hyper Hybrid technology offers combined driving range over 1,000 km, dual hypercharging technology.
• AI: Lotus Robotics subsidiary provides intelligent driving solutions to global leading auto partners, plans to service 10 more models including passenger and commercial vehicles, seeks Level 4/5 solutions.
• Market Strategy: Regional delivery breakdown: North America 20%, Europe 38%, ROW 13%, China 29%; stable retail store number and composition; China saw growth with upgraded Eletre, U.K. had improvement in battery electric lifestyle vehicles, North America deliveries of Emira resumed in July.

In the second quarter, Lotus Technology delivered over 1,400 vehicles to distributors, a 49% year-on-year decrease. Total deliveries for the first half exceeded 2,800 units, down 43% year-on-year. Revenue in Q2 was USD 126 million, down 44% year-on-year, and USD 218 million for the first half, down 45% year-on-year. Gross margin in Q2 was 5%, down 4 percentage points from the same quarter last year, but the first half gross margin was 8%. Lifestyle vehicles accounted for 83% of Q2 deliveries, up from 56% in Q1, contributing 68% of first half deliveries. Deliveries in China grew with the upgraded Eletre Hyper SUV, U.K. saw improvement in battery electric lifestyle vehicles, and North America deliveries of Emira resumed in July. Cost of revenues decreased year-on-year, resulting in gross profit of USD 7 million in Q2 and USD 80 million for the half. Operating loss in Q2 was USD 160 million, a 22% improvement year-on-year, and net loss was USD 130 million, down 36%. First half operating loss was USD 263 million, a 40% year-on-year decrease, and net loss narrowed to USD 313 million, down 32%.

• New funding: Secured up to USD 300 million convertible notes from ATW Partners and funding from Geely.
• Product Launches: Model year '26 Emira rolling out; plug-in hybrid production starts end 2025, market entry deliveries Q1 next year; Vision X project to launch in 2027.
• Future Growth: Plans to equip services for 10 different models including passenger and commercial vehicles, seek upgrades to Level 4/5 solutions, and explore robotaxi in Saudi Arabia via strategic partnership.

• U.S. tariff policies disrupted deliveries of Emira to North America in Q2.
• Market volatility and policy uncertainties impacting business.
• Potential delays or issues in the consolidation plan of ONE LOTUS.

Q: Could you share more details about the company's product road map and the future business outlook?

A: Spoke about powertrain technology, promoting Hyper Hybrid technology, model year '26 Emira rolling out, plug-in hybrid production starting end 2025 and market entry Q1 next year, Emira facelift in 2027 for EU7 compliance, and Hyper Hybrid tech with over 1,000 km range.

Q: Could you please help explain the ONE LOTUS strategy and then how you plan to integrate this business and any expected synergies?

A: Talked about consolidation of Lotus U.K. (developing and manufacturing sports cars) and Lotus Tech (developing and manufacturing lifestyle vehicles) for efficiency improvement, Lotus U.K. to enjoy Lotus Tech's plug-in hybrid solution, Lotus U.K. focusing on high-performance attributes and engineering services, Lotus Tech focusing on intelligent and electrification in China, and the deal to close by end 2023 or Q1 next year as prerequisites of put option were met in 2024 and plan approved by Board.