Lotus has backtracked on plans to shut down car production in the UK after the government stepped in with promises of support for the iconic British sports car brand.
The company, owned by Chinese automotive giant Geely, said it’s now “actively exploring strategic options” to stay competitive globally and improve how it runs things. In short: they’re not closing the factory, at least for now.
Just days earlier, The Financial Times reported that Lotus was preparing to stop building cars at its Hethel plant in Norfolk, potentially putting 1,300 jobs on the line. The news caused an immediate stir, and UK government officials quickly reached out to Lotus and Geely execs.
“Everyone just panicked,” one insider told the FT.
UK Business Secretary Jonathan Reynolds met with Lotus on Sunday and was assured that the company was still committed to its UK operations. A government spokesperson said they were ready to work with Lotus and the wider car industry to boost growth and competitiveness.
This comes at a time when the UK car industry has taken some heavy hits, remember Honda and Ford pulling the plug on their UK plants? To help turn things around, Prime Minister Keir Starmer’s Labour government recently rolled out a new industrial strategy, promising lower energy costs and £2.5 billion in funding for manufacturing and R&D.
While Lotus claims the current pause in UK production (which started in mid-May) is down to supply chain issues and new US tariffs, insiders say the company’s problems go deeper. It’s reportedly been struggling to pay suppliers, demand for its cars is down, and inventory is piling up, both in the UK and in Wuhan, China, where Lotus also builds cars.
According to people close to the situation, Lotus executives were seriously considering pulling manufacturing out of the UK entirely. One internal meeting reportedly involved preparing a proposal to do just that and focus on building cars in the US instead.
Lotus has already seen major job cuts and high-profile departures, including its European chief and chief commercial officer. The company reported a $103 million loss in the last quarter, down from a $233 million loss the year before. Deliveries also dropped 42%, with just 1,274 cars shipped between April and June.
For context: Lotus’ Hethel factory, which has been around since 1966, can build about 10,000 cars a year. In contrast, the Wuhan plant can crank out 150,000.
So while Lotus may have hit pause on quitting the UK, it’s clear the future of British-made Lotuses is still on shaky ground.
