On April 8, Lotus Technology Co., Ltd. ("Lotus", LOT.US) released its unaudited financial results for the fourth quarter and full year ended December 31, 2023. In 2023, Lotus's revenue and profitability have increased significantly, showing people a new luxury pure electric brand.
This is the result of Lotus' insistence on innovation and development. Since the launch of the "Vision80" strategy in 2018, Lotus has grown into a leading luxury electric vehicle brand through important milestones such as technology changes, product lineup renewal, and launches.
In February this year, Lotus successfully listed on the U.S. stock market, accelerating the pace of the brand's globalization strategy. In 2024, Lotus will continue to make efforts in product layout and channel construction, and continue to expand its global footprint.
“Vision 80”战略成果初显
In 2023, Lotus achieved full-year revenue of $679 million, including $361 million in the fourth quarter, an increase of 92% sequentially.
In terms of profitability, Lotus' gross profit margin for fiscal year 2023 was 15%, of which the gross profit margin in the fourth quarter increased by 4 percentage points to 19% compared with the third quarter. Compared with the gross profit margin of less than 10% of many new domestic EV manufacturers, Lotus's gross profit margin reached 15% in the first year of listing, fully verifying its brand premium ability. Lotus expects revenue to increase to $2.5 billion to $2.7 billion in 2024, and gross margin to further improve to 17%-19%.
As for why Lotus can continue to steadily improve its gross margin in the short term. Feng Qingfeng, CEO of Lotus Technologies, said: "In the luxury car market, we should not only rely on simple 'cost performance' to impress users, but also provide users with emotional value in addition to product value. In fact, the 'price' in 'cost-effective' refers to 'price', while 'sexuality' is 'rational' and 'emotional', that is, emotional value. We believe that only by continuously creating emotional value for users that they are self-pleasing, we can also achieve higher high gross margins. ”
With rapid revenue and profitability improvement, Lotus expects to achieve positive profit and cash flow in 2026.
From a shallow point of view, the growth of Lotus's performance in 2023 is due to the historic breakthrough in Lotus's sales volume. In the fourth quarter of 2023, Lotus deliveries increased by almost 110% quarter-on-quarter to 3,749 units.
According to Lotus, the increase in deliveries was mainly due to the expansion of production and sales of the company's first all-electric living car, the Eletre, in the second half of the year, which allowed Lotus to achieve a 63% proportion of electric models in total annual deliveries.
At a deeper level, Lotus' steady growth in market performance and performance is actually the result of the gradual implementation of the "Vision 80" strategy.
In 2018, Lotus put forward the "Vision 80" strategy, that is, to achieve a comprehensive transformation of electrification + intelligence within 10 years, and achieve the goal of becoming the "No. 1 brand of million-level luxury pure electric vehicles" through the three major supports of product strategy, brand revival strategy and globalization strategy.
Up to now, more than half of the implementation of Lotus's "Vision 80" strategy, Lotus has launched 4 new models to the market: pure electric supercar Evija, the last fuel sports car Emira, pure electric supercar SUV Eletre, pure electric supercar sedan Emeya, and will continue to launch an electric sports car and a four-door coupe in the later stage, forming a "3+3" product matrix, that is, 3 sports cars and 3 life cars.
The increase in sales and performance shows that Lotus' "Vision 80" strategy has begun to demonstrate its tremendous power and is driving the historic transformation of the 76-year-old luxury sports car brand.
The process of globalization has entered a new phase
2024 is considered a pivotal year for Lotus to realize its Vision80 strategy. The successful listing on the U.S. stock market has allowed Lotus to obtain a large amount of capital blessing, and at the same time sounded the clarion call for it to accelerate the pace of globalization. According to Lotus' plan, the global capital injection will be used to accelerate product innovation, develop next-generation automotive technologies, expand the global distribution network, and operate the company on a day-to-day basis.
Previously, Lotus announced that it would steadily promote the process of brand globalization in terms of products, channels, and charging infrastructure construction.
In terms of products, in March 2024, Lotus began deliveries of its first luxury electric supercar sedan, the Emeya, which is currently being delivered in China and is expected to be delivered in Europe in the third quarter of 2024. In addition, the luxury electric supercar SUV Eletre will enter Malaysia, the Middle East, Australia and New Zealand in the first half of this year, and Japan, South Korea, and the United States in the second half of the year.
In terms of channels, as of December 31, 2023, the number of Lotus stores worldwide has expanded to 215, an increase of 46 from the previous year. In 2023, Lotus has opened new flagship stores in strategically important global cities such as the Golden Triangle in Paris, Mayfair in London, and Gangnam in Seoul, demonstrating its strong determination to expand the brand. By 2025, Lotus plans to expand the number of stores worldwide to more than 300.
In terms of luxury vehicle charging, Lotus continues to expand its charging network and has built 65 supercharging stations in China, equipped with advanced 480kW fast charging solutions. In addition, Lotus owners have access to around 300,000 public charging stations across Europe and China.
In March 2024, the company launched the Lotus Chapman Bespoke service, offering different levels of customization for Lotus products, including one-of-a-kind one-off products, limited editions created by artists, pioneering brands and top racers, as well as personalized and exclusive trims.
As part of its globalization strategy, Lotus expects deliveries to triple to 26,000 units in 2024. As for how to achieve this goal, Feng Qingfeng said in an interview with the media at the earnings conference: "This year, we will start delivery in 24 countries and regions. Judging from the current order data, we are still optimistic about our delivery expectations for this year. For example, in the U.S. market, although our life cars have not yet been delivered, the market and order feedback from users after test drives is very good, and the orders for sports car products in the U.S. market have basically been locked, and the order numbers have exceeded expectations. ”
In this regard, there is a view that the price war in the Chinese market will become a stumbling block to the rapid increase in Lotus sales. Feng Qingfeng proposed that the competition in the luxury pure electric market segment must not rely on price wars, but on more value to impress users, such as brand satisfaction, service satisfaction, product satisfaction, etc. "I believe that in this segment, everyone's perception of competition is the same, such as Porsche, what he learned in the Chinese market must not be a price war, but how to do a good job in technology and how to do a good job in service. Of course, in this segment, in addition to relying on services and technology, it is also necessary to have links with users and provide users with emotional value. ”
And this is the way for Lotus to survive in the pure electric era that Lotus has discovered through continuous exploration, and Lotus, which is firmly moving forward along this path, will eventually become the "No. 1 brand of million-level luxury pure electric vehicles".