Lotus Q1 2025: Contradictions in PHEV Strategy, U.S. Market Sales, and Gross Margin Recovery

Vehicle Deliveries and Market Transition:
- Lotus Technology Inc reported delivering nearly 1,300 vehicles to distributors in Q1 2025, up 42% year-on-year, while user vehicle deliveries exceeded 2,000 units, up by more than 10% year-on-year.
- The increase was driven by the scheduled transition period for upgraded models set to start delivery in Q2, offsetting the impact of prior destocking activities.

Revenue and Gross Margin Recovery:
- Quarterly revenues narrowed to USD 93 million in Q1 2025, but the company achieved a notable gross margin recovery, improving from negative in Q4 2024 to a positive 12%.
- The recovery was due to easing destocking effects and improved operations following the transition period.

Regional and Product Sales:
- Europe, China, and North America each contributed approximately 1/3 of the company's total deliveries, with lifestyle vehicles accounting for 56% of the total Q1 deliveries.
- The sales distribution remained stable due to consistent demand across regions and product lines.

Operational and Financial Improvement:
- The company reported an operating loss of USD 103 million for Q1, representing a 56% year-on-year decrease, and a net loss of USD 183 million, a 29% reduction.
- This improvement was due to a 6-quarter streak of reduced operating expenses, achieved through efficient enhancement plans.

Technological and Market Strategic Focus:
- Lotus emphasized its focus on Hyper Hybrid EV Technology and PHEV products, with a new model expected by the end of 2025, featuring 300 km pure battery range and over 1,000 km combined range.
- The strategic focus is aimed at capturing interest in markets with low BEV penetration, such as APAC and the Middle East, to address customer demands and combat the impact of U.S. tariff hikes.