Earnings call transcript: Lotus Technology sees Q2 2025 revenue drop, plans new launches

Lotus Technology Inc., with a market capitalization of $314 million, reported a significant decline in its second-quarter 2025 earnings, with vehicle deliveries and revenue experiencing sharp decreases year-over-year. Despite these setbacks, the company remains optimistic about future product launches and strategic initiatives aimed at improving its market position. According to InvestingPro analysis, the stock appears fairly valued at current levels. The stock price showed a downward trend, closing at $3.6, a 2.3% decrease from the previous session, with the shares down nearly 16% over the past year.

Key Takeaways

• Q2 vehicle deliveries fell by 49% year-on-year.
• Revenue for the first half of 2025 decreased by 45%.
• Gross margin dropped to 5% in Q2, down 4 percentage points.
• New product launches, including the Emera sports car, are planned for the coming months.
• Strategic partnerships and credit facilities are being secured to support growth.

Company Performance

Lotus Technology faced a challenging second quarter, with both vehicle deliveries and revenue experiencing substantial declines. The company delivered 1,400 vehicles in Q2, marking a 49% decrease from the same period last year. Revenue also declined by 44% year-over-year to $126 million. Despite these numbers, Lotus is focusing on innovation and strategic initiatives to regain momentum.

Financial Highlights

• Q2 Revenue: $126 million (-44% year-on-year)
• First Half Revenue: $218 million (-45% year-on-year)
• Q2 Gross Margin: 5% (down 4 percentage points)
• Q2 Operating Loss: $160 million (22% improvement)
• Net Loss: $130 million (36% decrease)
• Operating expenses reduced for seven consecutive quarters (-42% year-on-year)

Outlook & Guidance

Lotus Technology is gearing up for several product launches, including the global rollout of the Model Year 2026 Emera sports car next month and the production of a plug-in hybrid vehicle by late 2025. With an overall Financial Health Score of 1.82 (rated as "FAIR" by InvestingPro), and analyst consensus suggesting significant upside potential, the company’s strategic initiatives are crucial for its future performance. Get detailed insights and access to the comprehensive Pro Research Report, available for over 1,400 US stocks, to make more informed investment decisions. The company is also planning to introduce the Vision X model in 2027, alongside advancements in hyper hybrid EV technology. Financially, Lotus has secured $300 million in convertible notes and a credit facility agreement with Geely to support these initiatives.

Executive Commentary

"We have now reduced operating expenses for seven consecutive quarters," stated Daxi Wang, CFO, highlighting the company’s focus on cost management. CEO Qing Feng Feng emphasized, "We are developing every single product to global standards and global compliance," reflecting Lotus’s commitment to innovation and international market standards.

Risks and Challenges

• Continued decline in vehicle deliveries and revenue may impact financial stability.
• Tariff disputes in North America could disrupt market access.
• The competitive landscape in the premium BEV SUV segment remains intense.
• Achieving compliance with upcoming EU7 regulations poses a challenge.
• Expansion plans may strain resources if not managed effectively.

Lotus Technology’s strategic focus on innovation and cost management, coupled with upcoming product launches, positions it to navigate current challenges and capitalize on future opportunities. However, the company must address its declining financial performance and operational hurdles to ensure long-term success. With the next earnings report due on September 26, 2025, investors can access detailed financial analysis and real-time updates through InvestingPro’s comprehensive research tools and expert insights.

Full transcript - Lotus Technology Inc (LOT) Q2 2025:

Conference Operator: Good day and thank you for standing by. Welcome to Lotus Technology Inc. First Half and Second Quarter twenty twenty five Earnings Conference Call. At this time, all participants are in a listen only mode. After the speakers’ presentation, there will be a question and answer session.

Please be advised that today’s conference is being recorded. I would now like to hand the conference over to your first speaker today, Michelle Ma, Head of Investor Relations at Lotus Technology. Please go ahead.

Michelle Ma, Head of Investor Relations, Lotus Technology: Thank you, Maggie. Good morning and good evening, everyone. We appreciate you joining us as we review Lotus Tech’s financial results for the first half and second quarter twenty twenty five. Our financial results and the conference call materials were published earlier today and are available on our Investor Relations website. We are also broadcasting this call via webcast.

Joining us today are CEO, Mr. Qing Feng Feng and the CFO, Doctor. Dashie Wang. Before we continue, please be reminded that today’s discussion will contain forward looking statements pursuant to the Safe Harbor provisions of The U. S.

Private Securities Litigation Reform Act of 1995. Forward looking statements involve inherent risks and uncertainties. As such, the company’s actual results may be materially different from the views expressed today. Further information regarding risks and uncertainties is included in relevant filings of Lotus Tech with the U. S.

Securities and Exchange Commission. The company undertakes no obligation to update any forward looking statement, except as required under applicable law. Please also note that our earnings press release and this conference call will include disclosure of unaudited GAAP financial information as well as unaudited non GAAP financial measures. You can find a reconciliation of these figures in the press release available on our Investor Relations website at ir.rooklotus.com. With that, I’d like to turn the call over to our CFO, Doctor.

Wang, please.

Daxi Wang, Chief Financial Officer, Lotus Technology: Good morning, good day and good evening, all of the shareholders, analysts and friends from the media. Thank you very much for joining our first half and second quarter twenty twenty five earnings release. My name is Daxi Wang, the Chief Financial Officer of Lotus. It’s my privilege to briefly walk you through the company’s audited interim financial results. In the second quarter, the company delivered over 1,400 vehicles to distributors, a decrease of 49% year on year.

As a result, total deliveries for the first half of the year exceeded 2,800 units, down by 43% compared to the same period last year. These figures reflect a scheduled transition period as upgraded models began deliveries in Q2, the impact of The U. S. Tariff policies as well as ongoing destocking activities of the company. Revenue narrowed to US126 million dollars in the second quarter and US218 million dollars for the first half, down 4445% year on year respectively.

Gross margin for the Q2 stood at 5%, down four percentage points from the same quarter last year. Although quarterly gross margin decreased by five percentage points on a year on year basis, we achieved a first half gross margin of 8%, remaining are safely in the positive territory. Now let me break down our sales by category and by region. By category, lifestyle vehicles accounted for 83% of the total deliveries in the Q2, up from 36% in Q1. As a result, they contributed 68% of total deliveries in the first half of the year.

By region, deliveries in China showed notable growth following the start of the deliveries of the upgraded Eletras HyperXUVs in the second quarter. In fact, it has become a leading model in China’s premium battery electric SUV segment during this period. In The UK, our battery electric lifestyle vehicles demonstrated significant year on year improvement. Deliveries of the Emera to North America were disrupted in Q2 due to tariff disputes, but already resumed in July. In terms of sales channels, the total number and regional composition of our retail stores remained stable throughout the first half of the year.

Now turn to the key financials. I’ve already covered deliveries, revenues and gross margin. Now let me move to other financial metrics. The cost of revenues decreased by 42% year on year to US199 million dollars in Q2 and US200 million dollars in the first half of the year. This result in a gross profit of US7 million dollars for the first quarter for the second quarter and US80 million dollars for the half.

We reported operating loss of US160 million dollars in the Q2, a 22% improvement year on year. Net loss for the quarter was $130,000,000 down 36%. For the first half of the year, operating loss was $263,000,000 a 40% year on year decrease, while the net loss narrowed to $313,000,000 down by 32%. For reference, on a non GAAP adjusted basis, net loss for the quarter was $2,000,000 lower, primarily due to the impact of share based compensation. Beyond these numbers, I would like to emphasize that we have now reduced operating expenses for seven consecutive quarters, underscoring the company’s strong commitment to enhancing the operational efficiency and continuing to deliver values.

Our first half operating expense has lowered by 42% year on year. Despite challenges posed by market volatility and policy uncertainties, we have achieved several key milestones. Our CEO, Ms. Feng, will elaborate on this shortly. With that, I will now turn the floor over to Ms.

Feng. Thank you.

Qing Feng Feng, Chief Executive Officer, Lotus Technology: Hello, everyone. This is Qing Feng Feng, CEO of Lotus Technology. Let me brief you on the latest achievements and then recent developments. First, let me begin with new funding arrangements of the company. So on 08/19/2025, we have entered into a security purchase agreement with ATW Partners, pursuant to which the company agrees to issue and sell convertible notes for up to an aggregated principal amount of US300 million dollars Present to this agreement, Lotus has issued already notes in the original principal amount of US10 million dollars on the date of August 19.

And on the other side, we have also secured funding commitments from our strategic partner, Geely. So on 07/28/2025, Lotus has also entered into a master credit facility framework agreement with Geely. On the marketing front, in July, we have proudly announced our official return to Goodwood Festival by unveiling the Emera Cup race car at the event. And we have also exhibited our concept vehicle, Series one with also the full lineup including the HyperCar Evaya, the HyperGTE EMEA, the HyperSUV Eletra and also our proud sports car, Emera, as well as several legacy race cars to numerous goodwill to visitors. And then we have also seen a positive result in terms of our U.

K. Market sales. And on the AI side, the Lotus Robotics, a wholly owned subsidiary of the company, which are focused on AI and autonomous driving. The company has entered into MOU with a strategic partner in The Middle East to pursue a strategic collaboration in terms of AI and autonomous driving technologies, including the exploration of a robotaxi in Saudi Arabia. A few words on the product pipeline, beginning with our sports car, Emera.

So we are rolling out the model year 2026 next month globally. And then in terms of our future plan for Emera, we’re going to upgrade our powertrain in 2027 to comply with EU7. That includes also the potential consideration of a V six engine and then also alternative plug in hybrid solutions.

: And

Qing Feng Feng, Chief Executive Officer, Lotus Technology: the model year ’26, Electra and MEA are being delivered to the market globally. And also as most of our friends are concerned, the plug in hybrid vehicle, we are in good progress. We’re going to start our production of that model end of this year and then begin to market entry deliveries quarter one next year, beginning with China market. And then for the future, we’ll also roll out to Europe and some other markets. And then we have also a new model, internal project code, we call it Vision X.

That project, we are foreseeing to launch into the market in 2027. And also a brief introduction of the hyper hybrid technology, which Lotus possess. Some highlights of the 900 volt hyper hybrid EV technology. So we can with this technology, we can deliver the combined driving range of over 1,000 kilometers. And also the highlights of the technology includes the industry leading dual hypercharging technology, meaning that we enjoy the ultrafast plug in charging and also the ultrafast on the drive charging.

The ultrafast plug in charging speed is leading the industry, very similar to a battery swap. And then also on the drive charging, we can achieve the rate of five times the power consumption of the typical driving. And also, we can provide uninterrupted electric driving performance in any of the situations, including acceleration at very high speeds and also in extreme cold weather. So with this technology, Lotus will be unveiling this technology into our first plug in hybrid model this year. The deliveries of the model, which I have previously introduced, will beginning in twenty twenty six quarter one.

And also, I would like to mention a few words on our intelligent chassis system, which will be also equipped in our first plug in hybrid model launching end of this year. So with this technology, we are able to achieve a dual mode of driving function driving mode. So on a comfort mode that we’re tuning this vehicle to allow the comfort of the daily use. And also, we can tune to the performance mode while the drivers, our users can enjoy in the extreme conditions, extreme performance. So with this technology previously without this technology previously that comfort and the performance is always hard to balance.

But with this technology equipped in our vehicle and with the fine tuning of our chassis performance team, they will be able to elaborate, we will be able to perform the vehicle of two very different driving modes. We can enjoy the comfort in daily use and also we can enjoy the performance the performance driving mode. And then some of our global market strategy. So in China market, the sales network, we have also planned to strategically phase out some of the underperforming outlets, while we continue to broaden our urban coverage. We also developed a very customized and tailor made pricing and product strategies aligned with every single market and every single user demands that we enter into across the globe.

Whilst we are strategically prioritizing the tariff advantage to markets and then the premium EV markets with growth potential. This is supported by an U. K.-anchored brand hub for expansion into the Europe. We’re actively collaborating with multiple strategic partners to architect a localized market entry solution, leveraging the JD’s global ecosystem synergy. As according to our plan, the regional share of our deliveries is balanced.

So North America enjoyed 20%, Europe enjoyed 38% ROW, 13% while China enjoyed 29%. A few words on our AI front. So as we previously introduced the Lotus Robotics, it does not only provide intelligent driving solutions to Lotus, but also to other global leading auto partners. It is a one stop provider of intelligent driving and also providing the R and D and engineering solutions to our customers. So it provides intelligent driving software and hardware R and D and including the procurement services.

We’re leading one model algorithm and then also providing the L2 and L2 plus ADAS software and its upgrades over the year. We have the global coverage. So to date, the ADAS and PaaS solution fully delivered across Europe, Asia, GCC, North America, Asiana and so on, with the latest highway assist functions upgraded in Europe and well received by the market. Our clients include multiple brands from the JD ecosystem, but also to emphasize as well as other clients, external clients such as a leading European conglomerate, a top Japanese Tier one supplier and few others. On the future growth in the next two or three years, we are planning to equip to provide the services to another 10 different models, including passenger vehicles and also the commercial vehicles.

And we are actively seeking an upgrade of our technology solution using the large model algorithm to be able to enable the company to deliver a level four or level five solutions to the globe. And also, we introduced previously, we have entered into a strategic partnership to allow us to explore the robotaxi project expansion in Saudi Arabia.

: Thank you.

Michelle Ma, Head of Investor Relations, Lotus Technology: Thank you, Mr. Zhong and Doctor. Wang. This concludes our opening comments. And we will now move to the Q and A portion of the call.

Operator, please.

Conference Operator: Thank you. You. Just a moment for our first question. First question comes from Edison Yu from Deutsche Bank U. S.

Please go ahead.

Michelle Ma, Head of Investor Relations, Lotus Technology: Hey, this is Laura on for Edison. Thanks for taking our question. Could you share more details about the company’s product roadmap and the future business outlook? How should we think about the upcoming product launches and the growth trajectory, etcetera? Thank you.

Qing Feng Feng, Chief Executive Officer, Lotus Technology: So as we introduced earlier that the powertrain technology, I’ll say a few more on the powertrain technology. So we will actively promoting our hyper hybrid technology. And then the first vehicle to equip will be SUV launching into the market, begin delivery to the customer starting from quarter one next year. So and also you can see in the presentation deck that we have another vehicle. It’s a new type of vehicle.

Also will be equipped with the hyper hybrid technology. It will have the strong embedded Lotus DNA inside with the performance targeted product definition. So as a global brand, every single product that we develop, we are developing into global standards and global compliance. So basically, that’s for Eletra and MEA, we have the homologation of majority of the markets, including The U. S.

However, that we have seen The U. S. Tariff fluctuations throughout this year. So we expect that with the ease expect if the tension is eased, then we will be hoping to deliver those vehicles into The United States again. In terms of our proud Emera sports car, So we are having a facelift in the 2027 due to the EU7 kicking.

So for that, we are planning to have an upgrade on our V six engine and also plugging hybrid as an alternative.

: Thank you.

Conference Operator: Thank you. Just a moment for our next question please. Next we have Eugene Hsin from Macquarie Capital. Please go ahead.

: Thank you, management, for, taking my question. I’d like to ask, about the put option that was exercised, I think, in, early July and the expected merger with Lotus UK. Could you please help explain the One Lotus strategy and then how you plan to integrate this business and any expected synergies? Thank you.

Qing Feng Feng, Chief Executive Officer, Lotus Technology: So on the One Lotus, so basically as per current status, so we have the Lotus cars in The UK who develop and manufacture sports car and we have a Lotus tech to develop and manufacture the lifestyle vehicles. So in terms of consolidation plan that we see big room for efficiency improvement, while we consolidate a lot of the functions together, so including the technology synergies. So basically that we introduced the Emera. Once we have done the consolidation of One Lotus, so Lotus UK will be also enjoying the Lotus tax hyper hybrid plug in hybrid solution. And then we have also ambitious goals for the Lotus Class operation in the future that we will focus on the very high performance attributes and also the high performance engineering services that we can seek external clients.

And then as per the Lotus Tech operation in China that we will focus on the intelligence and then also electrification engineering and development in China, while we have the synergies between both. Because the company has delivered all the prerequisites of the port option in 2024. So we are and then also the consolidation plan has been officially approved by the Board. So we are now in the process of closing. We are targeting to close the deal by end of this year nor latest by quarter one next year.

Daxi Wang, Chief Financial Officer, Lotus Technology: Okay. Thank you.

Conference Operator: You. Due to time constraint, we

: will conclude the Q and A session. I will now pass back to Michelle for closing remarks.

Michelle Ma, Head of Investor Relations, Lotus Technology: Great. All right. And with that, I think we are all done for today. If you have any questions, please feel free to contact our IR team through the contact information on our website. We look forward to talking to you next quarter.

Thank you very much, and goodbye.

Conference Operator: This concludes today’s conference call. Thank you for participating. You may now disconnect.

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