Industry Outlook: Lotus
By Maximilian Strässer
Ladies and gentlemen, a short view back to the past.
For decades, Lotus has been known as the quintessential British manufacturer for those that wanted an affordable, lightweight, nimble alternative to the Porsche Cayman. Their hallmark car, the Lotus Elise, was seen as a seriously capable (if a little questionable in build quality) sportscar, and even was used as the donor body for the very first car of what is currently the largest automotive manufacturer by market cap – the 2008 Tesla Roadster. The Hethel-based company also competed in Formula One as early on as 1958 and continued to do so intermittently until the 2011 takeover of their team by Caterham.
Here was a brand with a rich motorsport heritage, decades of experience creating genuinely good sportscars, a strong fanbase. And yet, the 1990s and early 2000s saw Lotus being passed on from one company to the next, switching ownership every few years with a steadily declining financial outlook, which hadn’t seen the best of days since as early as the mid-1980s, amid the Financial Recession. Lotus eventually ended up under the majority ownership of Geely in 2017, providing a much-needed influx of cash flow and investment.
The first tangible sign of improving fortunes for Lotus came in the summer of 2019, where Lotus unveiled the codenamed “Type 130” – the Lotus Evija, a 1974hp all-electric hypercar. With a battery supplied by Williams Advanced Engineering and four electric motors from Integral Powertrains, the Evija can accelerate from 0-100kmh in under 3 seconds, 0-300 in under 9 seconds, and achieve a top speed north of 320kmh. As Jeremy Clarkson would say, speeeeed.
But the Evija was only a taste of Lotus’s revitalisation. After all, with a sticker price of around $2m and a production run of only 130 units, this was not clearly not a final hurrah for a once-great brand. No – the Evjia merely represented what Lotus could do with its newfound capital. And enthusiasts were ecstatic. Not at the arrival of yet another all-electric 2000hp hypercar, but because of what would inevitably come next.
And only two years later, in the summer of 2021 Lotus revealed the codenamed “Type 131” Lotus Emira – a jaw-droppingly beautiful successor to the Elise, featuring a modern interior, Lotus-handling, unprecedented high-quality materials, and a starting sticker price of only £60,000, alongside the choice between a V6 or a Mercedes-AMG supplied 4-cylinder, as well as between automatic / DCT and manual transmissions. No options for hybrid or EV powertrains.
Enthusiasts were ecstatic.
Along with the Emira, however, came the somewhat surprising news – this was the last ICE-powered sportscar that Lotus would produce, and the brand would be fully-electric by 2028, as well as ramp up production from 1500 cars per annum to well over 10,000.
And just like that, Lotus fundamentally changed its trajectory.
History lesson over.
Now we get into the real meat of the matter – Lotus as an electrified brand. Because, as you might have gathered, Lotus now has all the ingredients needed – and the actual technology – to absolutely excel, and in my opinion, become supply-constrained rather than demand-constrained, as was the case in the past.
For context, we’ve seen an exponential rise in demand for high-end EVs over the last three years. Not only has there been a notable increase in companies offering luxury EVs (looking at you, Lucid and Rivian), legacy automakers (OEMs) including Porsche, Audi, Mercedes, BMW and more have also introduced their own products. And demand for EVs is far outstripping supply – Porsche steamed past their goal of 30,000 Taycans per year, with it eclipsing even the iconic 911 in sales; BMW has already accounted for all of its 2021 delivery slots for the BMW i4 before the car is even available for test drives; GM sold out preorders of its Lyriq SUV within 10 minutes of opening them.
This trend of demand far outstripping supply (helped along by the semiconductor shortage, which I believe is a far more long-term problem than most think, but saving that discussion for another time) will continue over the next 5 years, primarily on account of the sheer appeal of new technology and sustainable luxury offerings.
There are some defining factors that are found in many of the most successful luxury EVs. In no particular order: range, charging speed, amazing driving dynamics, engaging brand story, luxury appeal, next-gen technology. Case and point, Lucid for range and charging speed, Porsche / Audi for handling and luxury appeal.
Enter Lotus.
Alongside the opening of an all-new factory in China (thanks Geely), Lotus has unveiled their upcoming EV lineup for the next 5 years, starting with the Lotus Type 132 in Spring 2022, which is an all-electric E segment SUV, so essentially the same size as the Porsche Cayenne, Lamborghini Urus, Aston Martin DBX, Audi Q8, Tesla Model X, to name but a few.
The SUV segment has already established itself as by far the dominant segment in terms of both sales and demand across the automotive industry, EV or not – especially in the luxury sector, with the introduction of SUVs into a product lineup historically being the turning point (for the better) for virtually every company, with Porsche, Aston Martin, Lamborghini (and soon Ferrari) as clear examples. Thus, the decision to launch the consumer EV lineup with an SUV, which will be a first for Lotus, may be an unpopular one amongst enthusiasts, but is undoubtedly the right decision for the company in the long-term. Not only is the demand for SUVs far higher than 2-seater sportscars, demand for EVs is also at an all-time-high and is steadily increasing – but despite this, there are only a handful of competitors in the luxury electric SUV segment, namely the Tesla Model X, BMW iX and upcoming Porsche Macan (albeit the latter being a crossover rather than an E segment SUV). As a result, Lotus will have virtually guaranteed demand for each and every Type 132 it can produce, plus is likely to attract a completely new customer base to the company, which bodes well for future sales.
In addition to this, Lotus plans to release its products with cutting-edge technology from launch, unlike some certain companies (not naming any names), the specifics of which are outlined as follows:
What enables the next-level charging speeds of the Lucid Air and Porsche Taycan (300kW and 270kW respectively) is an 800V system (904 in the case of the Lucid Air), which reduces weight, enables repeat performance and is overall just superior to the 400V system used in the majority of EVs. Surprise surprise, Lotus will have an 800V system in all of their upcoming EVs, including the Type 132 SUV launching next year. This will result in industry-leading charging speed and the possibility of repeatable performance like with the Porsche Taycan.
Likewise, although not necessarily the first thing that comes to mind when thinking about a sportscar brand, Lotus seems to have invested into technology for autonomous driving. Recently released teasers (see below) indicate that the Type 132 will be sporting a retractable LIDAR array. Despite Elon’s opinions, LIDAR is largely seen as being crucial to enabling true Level 3 hands-free autonomous driving, and is also used on the Lucid Air in Lucid’s DreamDrive array. The decision to include this may be controversial but is the right one, especially on an SUV – consumers in this segment care about practicality and ease of use, and self-driving is an important aspect of that, especially to younger generations. I’d personally suggest going with NVIDIA’s Orin chipset for the actual autonomous driving software, as Volvo are planning on doing – that way Lotus avoids having to invest too much time and capital into extensive internal development, and benefits from data shared between car brands – in the end, the biggest beneficiary is the consumer, but it would be as close to a win-win for Lotus as you tend to get in the automotive industry.
The eagle-eyed amongst you would have noticed that the Type 132 seems to be equipped with a large folding touchscreen à la Tesla. Again, while traditional consumers might scoff at the idea of having an increased focus on software, for more modern (and future) consumers this is very much another step in the right direction. Developed software is key to the success of a modern luxury car, especially an EV – and while I can’t judge anything on the actual software itself just yet, a large display certainly helps with that. The folding function is a nice touch too – that’ll help somewhat alleviate the whole “iPad on wheels” talk. As a quick sidenote, the best thing Lotus could do for software is implement Android Automotive, as Polestar and Volvo (fellow Geely-owned companies) have done – leaving the software to the uncontested experts that are Google is genuinely the best step forward rather than trying to develop it in-house, with potentially diastrous results (see VW’s Golf 8 and ID line-up). It’s extremely unlikely that this will happen for the Type 132, but perhaps in future iterations it could be doable.
Likewise, active aero at both the front and rear of the car bodes well for handling – while this aero is unlikely to actually notably affect driving dynamics too much, it’s part of a wider picture – namely, that Lotus routinely can (and does) deliver cars that handle absolutely brilliantly, and despite being an SUV, the Type 132 is likely to at the very least meet expectations of decent-for-an-SUV handling. The launch of the Emira has reinforced that Lotus has that magic touch when it comes to driving dynamics, and came at the perfect time – the Emira demonstrated that aside from Porsche, if anyone can make a relatively affordable SUV handle well, it’s Lotus.
And that’s all part of a wider success story – that of brand image. Modern luxury is about emotion. Now that the age of roaring ICE engines is drawing to a close, emotion has to be brought about through other means. Motorsport heritage will once again play a huge part in influencing brand story and product heritage, as will emotive design. Not only does Lotus have literal decades of motorsport heritage at the forefront of a variety of categories, the launches of the Emira and Evija have demonstrated that they’ve still got the Midas Touch – brand story is something that they’ve truly mastered, second only to Porsche with 19 Le Mans victories and countless motorsport-inspired touches to their streetlegal cars. This concept of brand identity is something that certain companies, particularly those under large corporations and without a defined motorsport heritage, will struggle with – we’ve seen that in recent BMW designs, we’ve seen attempts to find new designs through drawing from legacy products with Hyundai, but core identity has remained an issue for the majority of manufacturers. Lotus, on the other hand, is set to take the challenge of brand identity and score full marks.
Crucially, the story doesn’t end there. Following the Type 132, Lotus aims to produce a 4-seater sedan in 2023, followed by a Porsche Macan-sized crossover in 2025, and eventually an electric sportscar in 2026. Making an electric SUV is one thing (and Lotus looks set to nail that) but making an electric sportscar is an entirely different ballpark. But once again, Lotus looks to be headed in the right direction, and like with the Type 132, is already leading the charge alongside Porsche.
Lotus have set themselves the goal of releasing their first electric sportscar, the Type 135, in 2026 – incidentally, the same year that Porsche is rumoured to release fully-electric 718 Cayman and Boxter models. Now, while both companies have demonstrated their proficiency in making ICE-powered sportscars that are nothing short of a dream to drive both on road and on track, transferring those same qualities to a battery-powered two-seater sportscar bring about a host of complications.
Firstly, the weight. As it stands, batteries weigh significantly more than an ICE-equivalent, which in turn compromises handling. Significantly. And that’s especially relevant for Lotus, who in the past have had sub-1000kg sportscars as a defining characteristic, although the Emira has shown that is no longer the case. Likewise, centre of gravity is important – sure, with EVs it’s possible to stick the batteries under the floor and thereby instantly improve handling, but in a two-seater sportscar that’s easier said than done: you’re then limited by either the battery size you can install in a product, or by size of car and are forced to expand the footprint. And on top of that, you’d be perched on top of a massive battery, thereby losing the hunkered-down cockpit feel characteristic of all traditional sportscars. Either way, it’s difficult. The onset of solid-state batteries in the middle of the decade should help alleviate this issue, but by themselves wouldn’t fix it entirely.
Thankfully, Lotus has a solution.
Introducing Project LEVA – short for Lightweight Electric Vehicle Architecture.
Depending on the wheelbase and amount of seats, Lotus has come up with an EV platform capable of largely alleviating the aforementioned problems by placing batteries behind the seats, which (depending on wheelbase) allows for battery sizes up to 99.6kW and 871hp, which should ensure both ample performance and range without compromising handling in any meaningful way. Lotus have also found out a way of reducing rear structure weight by 37% compared to the V6 Emira, thereby further improving driving dynamics. Project LEVA set to be shared with Alpine, the French sportscar subsidiary of Renault, and will make its debut with the Type 135 in 2026. While Porsche has showcased what they can do with an equivalently-sized platform with their Mission R concept, it remains to be seen which approach between the two companies is ahead. Regardless, the above demonstrates that Lotus is set to nail the change to electrification in close to all areas, and is set to take the automotive industry by storm.
Geely has invested around $2.2bn into Lotus for the above changes to take place – and the effectiveness of this investment is already apparent. It goes to show that OEMs still have a say in the next decade, and despite living in an age where EV startups have valuations upwards of $100bn before generating a single dollar of revenue, differentiators like brand identity, manufacturing know-how and sheer appeal aren’t done yet.
That being said, supply chains are likely to be Lotus’s greatest hurdle. With their new factory opening in Wuhan towards the end of 2021, it’s crucial that they maintain cohegency between locations, and ensure that the core skill cadre that currently characterises the firm is maintained at their overseas factory. Likewise, given existing supply chain issues with semiconductors among other components, Lotus has to ensure that they actually have enough stuff to build all the products that they want. Demand will be there – Lotus has to ensure that supply will be able to at the very least match the initial targets they have. Having an established battery supplier, like Volvo does with Northvolt, will be crucial, as will be having a strong supplier for semiconductors. McLaren has already had to postpone the US launch of the Artura in favour of higher profit-margin products, which is a luxury Lotus cannot afford, given the amount of brand image that’s centered on the Emira and soon-to-be Type 132. Lotus would do well to draw on Geely Group’s resources, utilising companies like Volvo and Polestar for their resources, while also looking outwards for certain components. Given Lotus’s focus on lightweight products, I’d highly suggest reaching out to Lucid for their 74kg, 670bhp ActiveCore monster of an electric motor – Lucid has explicitly stated that their powertrain components are available for sale to OEMs, and Lotus’s EV emergence seems like the ideal way to leapfrog the competition while keeping R&D costs low.
Likewise, build quality is something Lotus has struggled with in the past. Lotus says the Emira marks the end of these issues – hopefully that rings true for both the Emira and future products. Lotus is clearly gunning for Porsche and other equivalent performance brands, especially in the high-end EV sector with the upcoming Type 132. Porsche has famously brilliant build quality, which in a $85k+ car (as the Type 132 is set to be priced at) needs to be of a high standard – and that means better than Tesla, and better than what Lotus has done in previous vehicles.
Although I’ve touched on this already, infotainment also needs to meet a certain baseline standard. Admittedly, software will matter a fair bit less to current Lotus customers, but does need to be on par with modern standards in order to eat away at Tesla’s market share. Down the line, it would be exceedingly easy to implement Android Automotive OS, as Volvo and Polestar are also part of the Geely Group, which guarantees a strong infotainment system without the need to invest heavily, but my primary guess as to why this won’t happen is the desire for brand differentiation within Geely.
Lotus has partially addressed the lack of a widespread dealership network by announcing the establishment of a direct online sales route for their upcoming EVs alongside their existing dealership networks. While this will be pleasant news in the US, where consumers regularly face dealer markups if purchasing their vehicle from a dealership, Lotus must ensure that they can still provide a satisfactory level of customer service – both when it comes to repairs and consumer interaction – in markets where a larger dealership network is beneficial, most prominently Europe. Realistically, Lotus will need to improve its dealership network substantially if it is to genuinely compete with more established manufacturers – Geely’s financial support should mean this won’t be a difficult task. Here also lies the opportunity of doing something more than a mere car dealership network – if Lotus did something akin to Rivian’s Venice Hub, Polestar’s Spaces and Lucid’s Studio network to really improve on the traditional dealership network, they stand a strong chance of enticing consumers that are older than their long-term target audience as well as those that are younger; test drives and the reliability of a close-by dealership are proven to be more important to an older clientele than any other market segment.
Despite the above concerns, demand will far outstrip supply regardless of what hiccups Lotus is likely to face, and they’re all but guaranteed to sell every single EV that rolls off the assembly line. All in all, my biggest regret is that Lotus isn’t publicly listed. Then again, Geely recently spun off Volvo and Polestar – here’s to hoping they do it again with Lotus.
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