Lotus' Q2 2025 Earnings Call: Conflicting Signals on Product Timelines, U.S. Strategy, and Merger Plans

The above is the analysis of the conflicting points in this earnings call

Date of Call: None provided

Financials Results

• Revenue: Q2: $126M, down 44% YOY; H1: $218M, down 45% YOY
• Gross Margin: Q2: 5%, down 4 percentage points YOY; H1: 8%

Guidance:

• ATW convertible notes up to $300M ($10M issued Aug 19); Geely master credit facility signed July 28.
• First hyper hybrid (PHEV) SUV: SOP end-2025; customer deliveries begin Q1 2026 (China first, then Europe/others).
• Additional hyper hybrid model planned; Vision X targeted for 2027 launch.
• Emira: MY2026 rolls out next month; powertrain upgrade in 2027 to meet EU7 (V6 and possible PHEV); North America deliveries resumed in July.
• One Lotus consolidation targeted to close by end-2025 or Q1 2026; expect tech and ops synergies.
• Lotus Robotics: Middle East AD/robotaxi MOU; expanding ADAS to ~10 more models over 2–3 years; aiming L4/L5.

Business Commentary:

• Vehicle Deliveries and Sales Decline:
• Lotus Technology reported a decrease in deliveries, with over 1,400 vehicles delivered in Q2, down 49% year-on-year, leading to total deliveries for the first half of the year exceeding 2,800 units, down 43% compared to the same period last year.

• The decline was attributed to a scheduled transition period with upgraded models, the impact of U.S. Tariff policies, and ongoing destocking activities.

• Revenue and Financial Performance:

• Revenue narrowed to US$126 million in Q2 and US$218 million for the first half, down 44% and 45% year-on-year, respectively.
• Gross margin for Q2 stood at 5%, down four percentage points from the same quarter last year, despite achieving a first-half gross margin of 8%.

• The decrease in revenue and gross margin was due to lower vehicle deliveries and the impact of U.S. Tariff policies.

• Operational Efficiency and Cost Control:

• The company reported an operating loss of US$160 million in Q2, a 22% improvement year-on-year, and a net loss of US$130,000,000, down 36%.

• This improvement was driven by a 42% year-on-year decrease in first-half operating expenses, emphasizing the company's commitment to enhancing operational efficiency and value delivery.

• AI and Autonomous Driving Initiatives:

• Lotus Robotics, a subsidiary of Lotus Technology, entered an MOU with a strategic partner in the Middle East to pursue a strategic collaboration in AI and autonomous driving technologies.
• This collaboration aims to explore a robotaxi project in Saudi Arabia, demonstrating the company's focus on AI and autonomous driving solutions for its vehicles and external clients.

Sentiment Analysis:

• Q2 deliveries down 49% YOY; H1 down 43%. Revenue: $126M in Q2 and $218M H1, down 44% and 45% YOY. Q2 gross margin 5%, down 4 pts YOY; H1 GM 8%. Operating loss improved 22% YOY; net loss down 36%. Company reduced opex for seven consecutive quarters. Secured funding (ATW notes up to $300M; Geely credit facility) and resumed Emira North America deliveries in July. First hyper hybrid SUV deliveries begin Q1 2026.

Q&A:

• Question from Edison Yu (Deutsche Bank): Could you share more details about the product roadmap, upcoming launches, and growth trajectory?
  Response: Lotus will lead with hyper hybrid tech: first PHEV SUV delivers in Q1 2026, another hyper hybrid model follows, all products built to global standards; U.S. timing depends on tariffs; Emira gets a 2027 facelift with upgraded V6 and potential PHEV.

• Question from Eugene Hsin (Macquarie Capital): Please explain the One Lotus strategy, integration with Lotus UK, and expected synergies.
  Response: Consolidation aims to boost efficiency and share technology: Lotus UK will adopt Lotus Tech’s hyper hybrid; UK focuses on high-performance engineering (including external clients) while China drives intelligence/electrification; deal targeted to close by end-2025 or Q1 2026.