On Wednesday, a press release came out talking about a Lotus buyout. Another one? Who owns it this time, I wondered. McDonald’s? This is a company that’s been passed around more than syphilis, after all. The more I read the press release, the more confused I became, but McDonald’s wasn’t mentioned. It did mention things such as the ‘Put Option Exercise Condition’ and, at that point, my brain started to hurt. Look, I am no trader and nor am I a lawyer. I’ll level with you: I just write about pistons and steering wheels and exhaust noise. I don’t know what a ‘put option’ is, and I’m not sure I wanted to, either.
Nevertheless, I battled on and I believe I’ve made sense of it all, so your brain won’t have to hurt like mine is. The main takeaway seems to be it’s good news; it’s about simplifying the business to make Lotus easier to manage from within. Geely sold its 51 per cent in the various tentacles of Lotus it bought from Proton many years ago, and sold them to Lotus Technology, a company it set up subsequently. To understand it all, it helps to know what the different tentacles of Lotus are and what they do.
Number one tentacle is Group Lotus plc. This is the overarching entity that Geely and a Malaysian firm called Etika Automotive bought from Proton in 2017. This encompasses the various Lotus operations, including both traditional ICE vehicles along with the newer EV stuff. ?
Then there is Lotus Advance Technologies, which you can think of as Lotus UK. This tentacle is responsible for manufacturing Lotus's sports and hypercars. It also houses Lotus Engineering, which provides consultancy services to other automotive manufacturers that many PHers will be aware of.?
Tentacle three is Lotus Technology. Now, this was a tentacle formed in 2018 by Geely. Its purpose? To focus on the development and production of luxury electric vehicles, including Lotus’s then-forthcoming EVs. While it had Lotus in its name, think of it as effectively a separate company headquartered in Wuhan (you remember, the place in China that was in the news a lot in 2020).? Lotus Technology didn’t develop the coronavirus, but it has been busy developing electric cars, such as the Eletre, although more as a separate entity than an in-house team.
All that’s happened now is Lotus Technology has bought out Geely’s original 51% share in Lotus Advance Technologies. Put simply, all of Lotus’s operations are now under a single brand: Lotus Technology. The aim is to unify the company’s communication and its global strategy. Another way to look at it is less in-house rivalry and confusion, and more clarity leading (hopefully) to a stronger Lotus brand going forward. From now on, everything Lotus – be it a wild hypercar or a cutting-edge electric SUV – will all be produced under one brand and one strategy.
You might be sitting there wondering why all this matters. Sure, it sounds like a boring ol’ corporate reshuffle, but there are potential benefits. And if you’re a Lotus fan (and who isn’t on this site?) that’s got to be welcome. With no separation of ownership within the Lotus brand, the company should be more agile, potentially making better decisions more quickly. It also means new models might be developed sooner, and any problems that need fixing can be dealt with more swiftly, too.
If that’s the case, it can only help make Lotus more competitive with other rivals, such as Tesla, Porsche, and Polestar. It also makes the brand identity clearer. Now, whether you're buying a Lotus SUV or a sports car, an EV or an ICE, you’ll know it’s not popped out from a tangle of different companies. It’s simply a Lotus, just like an Audi is an Audi, no matter where it’s been built. Ultimately, if streamlining the business frees up time, energy, and resources, who’s to say this can’t be put to good use doing what Lotus does best: building cars that are fun to drive?
If you’re interested in the nitty-gritty of how this has been achieved, Lotus Technology hasn’t simply handed over a giant wad of cash to Geely. Lotus Technology is trading shares in itself to Geely in return for the 51% ownership of Lotus UK. Think of it like offering a stake in your business instead of paying someone outright. Geely ultimately still has its share in Lotus, but the overall company rather than in all the subsidiaries individually. It seems this wasn’t a sudden brainwave, either. The move was planned a while ago.
Geely had a ‘put option’, which I’ve learned simply means they had the right to sell their part of Lotus UK once a certain milestone was hit. And the milestone was selling 5,000 cars in 2024, which it did. Therefore, the deal triggered: Lotus Technology gets control and Geely gets its shares.
‘This marks a critical milestone in our journey,” said Qingfeng Feng, CEO of Lotus Technology. “We’re bringing everything together so we can grow the brand, build better cars, and create long-term value for everyone – especially our customers.’
Taken at face value then, this might be that rare thing: a piece of financial news concerning Lotus that isn't all doom and gloom - and Lord knows, we could do with that in the aftermath of yet more job losses at Hethel. That was blamed on the oldest chestnut in the book (market volatility); let's hope this latest development suggests the opposite. Lotus hit its target (or one specific one, at any rate) and, in doing so, the folks at Geely have said: ‘You’ve proved we can trust you, now go make it work.' Stranger things have happened.
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