Lotus denies plans to close UK factory

British sports car maker Lotus has denied reports it is considering closing its only UK plant, and shifting to the US.

Multiple publications, including the BBC, Automotive News and the Financial Times, are reporting Lotus is contemplating closing its plant in Hethel, about 20 minutes south of Norwich.

Lotus and parent Geely initially refused to comment on the reports, but on Saturday Lotus put out an official press statement: “Lotus Cars is continuing normal operations, and there are no plans to close the factory. We are actively exploring strategic options to enhance efficiency and ensure global competitiveness in the evolving market.

“We have invested significantly in R&D and operations in the UK, over the past six years. Lotus remains committed to the UK, and its customers, employees, dealers, suppliers, as well as its proud British heritage.”

The company also said “the UK is the heart of the Lotus brand”, while also noting it is its “largest commercial market in Europe”.

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Hethel, the company’s only factory in the UK, currently produces the Emira coupe (below) for sale around the world. If Hethel is mothballed, Emira production may be moved to the Volvo’s plant in Charleston, South Carolina, which currently underutilised.

In a call with investors last week, Feng Qingfeng, CEO of Lotus Technology, said “localisation [of production in US] is a feasible plan” given President Trump’s constantly changing tariff policy on foreign-made cars.

Production at Hethel has been paused to since mid-May to manage supply chain issues related to US tariffs, and a halt in shipment of Emiras to the US.

The Financial Times believes closure of Hethel could happen as early as 2026, and would see around 1300 people lose their jobs. The company’s growing losses saw it already fire 270 people in April this year, following on from multiple rounds of job cuts over the last few years.

Despite those job losses, Geely and Lotus said they were committed to the UK.

Moving production from the UK to Volvo’s plant in the US would allow Lotus to avoid the wildly fluctuating tariff situation in the US, one of the brand’s key markets.

Earlier this year President Trump announced tariffs on UK-built cars would rise from 2.5 per cent to 25 per cent, but this was quickly dropped to 10 per cent, but only for the first 100,000 vehicles per year, after the two nations completed a trade deal.

Founded in 1952 by Colin Chapman, the company’s ethos of simplifying and adding lightness has seen it produce many celebrated sports cars, but the firm has teetered on a financial knife-edge for decades. After Chapman’s death, Lotus has been successively owned by GM, Romano Artioli (who at the time also owned Bugatti), and Malaysian automaker Proton.

Current ownership of the storied sports car brand is a little complicated. Chinese automaker Geely — which also owns Volvo, Polestar, Lynk & Co, Zeekr, LEVC and Smart — bought a 51 per cent of Lotus from Proton in 2017.

Geely then split the brand in two, with UK-based Lotus Cars responsible for the marque’s sports cars, and a new firm Lotus Technology, based in Wuhan, China, in charge of expanding the brand into electric SUVs and sedans.

In February 2024 Lotus Technology was floated by merging with a special purpose acquisition company backed by LVMH, the luxury conglomerate that owns Louis Vuitton, Moët & Chandon, Dior, Bulgari, TAG Heuer, and many others.

This April, the companies announced Lotus Technology would buy out Geely’s 51 per cent stake in Lotus.

Although the brand’s new EVs helped grow the brand’s sales to 12,134 last year — a 74 per cent increase over 2023 — Lotus Technology has bled hundreds of millions of dollars in red ink, and its shares are down 84 per cent.

Last year the 6862 Chinese-made Eletre SUVs and Emeya sedans (above) found new homes, while sales of the Emira were up 102 per cent to 5272.

If Lotus does end manufacturing in Britain, it will follow other car makers in closing factories in the UK. In March this year Vauxhall closed its Luton factory, which once made Bedford vehicles, and most recently made the Opel/Vauxhall Vivaro, Citroen Dispatch, and its many siblings.

Prior to this Honda closed its Swindon plant in 2021, and Ford closed its engine factory in Bridgend, Wales in 2020.

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