EVs drive turnaround at Chinese-owned Lotus

The base of a petrolpowered icon that inspired Tesla is now reaching for its own electric dream, reports Matt Oliver

Few people think of Norfolk as key to the history of electric cars. Yet it was at Lotus’s historic base in Hethel that Elon Musk came for help when he wanted to produce an electric sports car that would be irresistible to even the most ardent petrolheads.

That car, with a chassis based on the Lotus Elise, eventually became Tesla’s first model, the Roadster, and is credited with transforming the image of EVs. But while the project catapulted Tesla towards global success, Lotus lagged behind.

Now, bosses are trying to change that, with Lotus given a new lease of life and a big cash infusion following a takeover by Chinese car maker Geely.

Under a new strategy, Lotus is aiming to have an all-electric range by 2028, spanning both its traditional sports cars but also more lifestylefocused sedans and SUVs.

Sports cars will continue to be made in Norfolk, while the SUVs are being produced at Geely’s factory in Wuhan, in central China.

A change of ownership is always fraught with doubt, but Lotus staff say their new owners have so far shown strong commitment to revitalising the brand long term.

The clearest sign of that is some £500m that has been pumped into a renovation at Hethel.

“There have been some big changes here,” says Carl Elston, executive director of quality, during a tour of the factory floor.

“And we’re still changing and talking about improvement.”

Perhaps the starkest change has been a big uptick in output. Whereas once, Lotus would have struggled to produce 1,500 cars in a good year, it says it is now producing 5,000.

That has been enabled by major tech upgrades that have turned the factory into a hive of activity, where some 2,000 staff now work with robots.

The main focus at the recentlyupgraded Chapman Production Centre, named after the company’s founder, Colin Chapman, is currently the Emira sports car, which sells for at least £81,495, and is the last petrolfuelled model Lotus will ever make.

There is a clean and clinical feel on the floor, as partially-built cars move, carried by autonomous robots that trundle around silently, through tunnels illuminated by bright L ED lighting.

Staff in blue overalls check the paintjobs of each car, so no blemishes are missed that may later be revealed by harsh Californian or Middle Eastern sunlight.

This technology may have been standard at many car makers for years but at Lotus, until just a few years ago still crafting cars painstakingly by hand, it is revolutionary.

Lotus has been based at Hethel for 58 years, in converted hangars that previously housed US air force bombers during the Second World War. “We used to paint everything by hand and we have got some really clever, knowledgeable guys,” Elston explains. “But you can’t sustain that on the volumes that we now work on – we had to go to automation.”

Chassis are now sent through a new multimillion-pound plant that sprays the paint on to electrostaticallycharged composite panels, which help to pull the paint molecules on to the surface. Each car takes about 20 to 25 minutes to paint.

In a new factory next door, meanwhile, engineers work on the £2m Evija, the company’s electric “hypercar”. Around six are being built during our visit, with the company having only recently begun deliveries.

One being worked on is owned by Jenson Button, the 2009 F1 world champion. “He wants to make a couple of modifications,” says Elston.

The Evija is the most powerful series production car ever built, the company says, boasting nearly 2,000 horsepower and a top speed of 217mph. With Lotus’s reputation for excellent handling, one of the biggest challenges for designers has been to ensure that this continues into the EV age – with heavy batteries posing a fresh challenge. Where to place the battery in future models, and whether to go with a flat “skateboard” layout or the mid-engine, behind-the-seats format Lotus has traditionally used, is still being discussed.

“When you move towards electrification, the biggest challenge is the batteries and how we can distribute the weight there in the right way to ensure that it still handles like a sports car,” says Mike Johnstone, the chief commercial officer.

There is a lot of nostalgia surrounding Lotus, thanks to the brand’s association with innovation in F1 and its Esprit car appearing in the

Bond film since the takeover by Geely, the company has pivoted towards making “lifestyle” cars such as the Eletre “hyper SUV” and the forthcoming Emeya, which looks more like a sedan. The Eletre has won plaudits for being surprisingly agile and quick for an SUV, packing 900 horsepower, and on laps around the company’s test circuit, it flies round corners at 90mph.

Both the China-made models are designed to become Lotus’s workhorse profit-makers, with the factory in Wuhan billed as having a maximum capacity of 150,000 cars per year.

This is the pitch that Johnstone and other Lotus bosses are making to potential investors as they prepare to float the lifestyle car business, Lotus Technology Inc, on the stock exchange in New York, via a special purpose acquisition company (Spac) in the first quarter of this year.

Johnstone and his colleagues will no doubt hope to emulate the example of Italy’s Ferrari, which since listing in 2016 has seen its share price surge more than 750pc higher. A more ominous comparison, however, is fellow British marque Aston Martin, which has shed 95pc of its value since its 2018 float and has remained in permanent turnaround mode ever since. Asked about how they will avoid Aston’s fate, Johnstone insists Lotus is being far more realistic about its expansion plans. “It’s not trying to show either ridiculous volumes or ridiculous gross margins, so it’s a pragmatic plan that we believe is an achievable plan,” he says.

More concerning to the company, and its investors, however, is the very real prospect of European restrictions on imported Chinese cars, as well as the existing barriers Chinese manufacturers face when selling into America. In Europe, a regulatory investigation into subsidies given to Chinese manufacturers is under way, while countries including France are restricting the subsidies they receive.

“I don’t think the proliferation of tariffs across the world is a good thing for any company,” Johnstone shrugs when asked about this. “I don’t think it necessarily helps the global economy. But we’ll wait and see what the outcome is and respond accordingly.”

Some industry insiders have speculated that this will force firms such as Geely to open up factories in the US and EU markets.

Geely’s rival Chery has suggested it would consider one in the UK – would Lotus consider the same for its SUVs? “Our heart and soul is in the UK,” Johnstone says. “And we obviously wouldn’t rule that out. But it’s not part of the plan at the moment.

“We are exploring lots of different areas, all of which come with benefits – in terms of things such as the [US Inflation Reduction Act] – and risks as well, because you build a business on that and things change in the future.

“But at the moment, the key thing is focusing on here [Hethel] and the factory in China, and getting the production ramped up.”

Success is not a given. But one thing is clear: Lotus is no longer poised to be a footnote in the history of EVs.

‘The key thing is focusing on Hethel and China, and getting production ramped up’