Lotus UK factory future: Hethel plant put 'under review' by Chinese owner
Geely weighing up a host of options as it tries to stem huge losses at troubled British sports car firm – including possible closure of Norfolk base
The future of Lotus’s UK factory Hethel is under review, as its Chinese owner, Geely, takes drastic action to fix the loss-making British sports car brand.
The car maker is trapped in a perfect storm, buffeted by tariffs that have inflated the cost of UK sports car exports to the United States, and exorbitant American import duties on its Chinese-built lifestyle EVs that make sales commercially impossible. Lotus is also grappling with inconsistent electric car demand, and growing the brand from a tiny customer base.
Geely has pumped billions of investment into Lotus, funding the clean-sheet electric technology that underpins the Eletre SUV and Emeya sports saloon and a factory in Wuhan, China, with a 150,000-unit capacity. It has also invested £100 million in its Norfolk site, yielding new production lines to build the petrol-powered Emira sports car and pure electric Evija hypercar.
Nonetheless, Lotus sold only 12,134 vehicles in 2024, and deliveries slid 42 per cent in the first three months of this year to just 1,274. Sports cars contributed 555 of those, but volume will have taken a further dive since, with Hethel having to stop production in May in the aftermath of President Trump’s announcement of global tariffs.
The US is a critical market for the Emira sports car, accounting for a fifth of Lotus’s global volume in 2024. “We hit a bump in the road,” Lotus Europe boss Matt Windle told Auto Express a few weeks ago. “But pricing is agreed and cars [will begin] flowing again.” With the new prices incorporating the 10 per cent import tariff agreed between the US and UK, deliveries are scheduled to recommence in August.
But the structural decline in sports car sales, the recent production hiatus and underperforming sales to date for the £2.4 million Evija electric hypercar have triggered multiple rounds of job cuts in Norfolk. And now Geely has ordered a strategic review into Hethel, as part of its drive to get Lotus to break even in 2026.
The review will look at ways to boost sales of the existing line-up, decide whether a hybrid or pure electric sports car should replace the Emira, and even consider closure of the factory.
News of the review, including the extreme option of shuttering Hethel, leaked to the Financial Times, which reported in late June that Geely had decided to shift sports car manufacturing to the US.
The report sparked intense talks with the Department for Business and Trade, with state support potentially on the table to help Lotus through this bleak period. The following statement was also issued: “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.”
Shifting sports car production to the US is unlikely: more logical is that Geely fast-tracks US localisation of the Eletre and Emeya, which will introduce ‘hyper-hybrid’ powertrains from next year. It already owns a factory in South Carolina producing the Volvo EX90 and Polestar 3, although Volvo expects to add the 2026 EX60, eating up capacity.
The hyper-hybrid powertrain will be shared with Chinese entrants Zeekr and Lynk & Co: Geely chairman and founder Li Shufu outlined his plans to scale technologies more deeply across group brands – including Lotus, Volvo and Polestar – in his Taizhou declaration in September 2024.
Zeekr and Lynk & Co have a plug-in hybrid set-up that combines a 2.0-litre turbocharged petrol engine packing up to 275bhp with front and rear electric motors. Total output can eclipse 850bhp, 0-62mph takes less than 5-seconds and the system is supported by a big battery with more than 100 miles of electric range. Lotus will have access to this hardware to deliver its hyper-hybrids, starting with the Eletre in 2026.
Chinese executives are said to be acutely aware of the iconic status of Hethel, home to Lotus since 1966, its triumphant Formula 1 racers and competitive sports cars. “I think there’s a place for Hethel, it’s the home of the brand,” Matt Windle told us. “When I spend time in China with my Geely colleagues, they really buy into the brand story; other companies just haven’t got that legacy or history.”
Geely plans to decide Lotus’s future unilaterally: it has exercised an option to buy Malaysian partner Etika Automotive’s 49 per cent stake in the Hethel sports car business and engineering consultancy. The deal should be complete by the end of the year.
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