The future of Lotus’s historic home in Hethel hangs in the balance as the company’s Chinese owners consider a major shift in strategy that could see production move to the United States, in a bid to navigate escalating trade tensions and stem mounting financial losses.
Sources close to the matter revealed to Autocar that a directive to wind down production at Hethel has come from top-level management in China, with a temporary halt already in effect for the factory’s sole model, the Emira, since mid-May. The decision comes amid increasing tariffs imposed by the US on Chinese-built electric vehicles (EVs), a market Lotus has identified as crucial for its future growth.
However, the closure is not yet final. Reports indicate the UK government is actively working behind the scenes to offer a support package aimed at retaining production on British soil. Business Secretary Jonathan Reynolds is reportedly scheduled to meet Lotus executives on Sunday, June 28, in a bid to preserve jobs and safeguard one of Britain’s most iconic automotive brands.
In a carefully worded statement posted on social media, Lotus sought to reassure stakeholders, stating: “Lotus Cars is continuing normal operations. There are no plans to close any factory.” The statement went on to emphasize the UK’s central role in the company’s operations, housing its sports car manufacturing, global design centre, motorsport activities, and engineering hub. Nonetheless, it also acknowledged that Lotus is “actively exploring strategic options to enhance efficiency and ensure global competitiveness.”
The strategic pivot comes at a turbulent time for Lotus. Since its acquisition by Chinese automotive giant Geely in 2017, the brand has undergone a sweeping transformation—one that has yet to pay off financially. Despite a £2 billion investment and the rollout of new electric models like the Eletre SUV and Emeya sedan, Lotus posted a $183 million loss in Q1 2025, with debt ballooning to $3.3 billion. Vehicle deliveries fell 42% in the same period.
Tariffs have hit hard. The Eletre, Lotus’s flagship electric SUV, has been pulled from the US market due to the country’s new 100% import tariff on China-made EVs. Sales in Europe and China have also stumbled, with deliveries of both the Eletre and Emeya down 31% year-over-year.
In response, Lotus is doubling down on “localization” strategies, with CEO Feng Qingfeng confirming that discussions are underway to relocate some production to the United States. One likely destination is Volvo’s under-utilized plant in South Carolina—another Geely-owned facility—where even the Emira could eventually be built.
Adding to the company’s troubles, recent cost-cutting measures have seen 270 workers laid off at Hethel, the closure of its newly established Clerkenwell headquarters, and the handover of its Park Lane showroom to dealership group HR Owen. The company has also postponed its planned electric sports car, citing tepid market enthusiasm.
“Is the market ready for an electric sports car? I don’t really know the answer to that yet,” Lotus Europe CEO Matt Windle told Autocar last month. Windle has reportedly been pushing for more models to be built in Hethel, which produced just over 5,000 Emiras last year, despite a theoretical capacity of 10,000.
Looking ahead, Lotus is repositioning its lineup to focus on hybrid performance. The company’s first plug-in hybrid—the Eletre Hyper Hybrid—is set to launch in China in early 2026, with future Lotus sports cars expected to follow the electrified path.
Despite Geely’s £100 million investment into Hethel’s modernization, including a state-of-the-art sports car facility opened in 2022, the site’s future remains uncertain. Critics within the company are not mincing words. One former senior executive described the potential closure as “a disgrace.”
For Britain’s automotive sector, losing Lotus would be more than symbolic. While small in output compared to JLR or Nissan, Lotus has been a mainstay of British engineering since Colin Chapman bought the Hethel airfield in 1966. Its loss would be a blow to the UK’s ambitions to scale car production to 1.3 million units by 2035—an ambition laid out just this week as part of a new industrial strategy.
With government negotiations ongoing and geopolitical pressures mounting, the fate of Hethel—and perhaps the soul of Lotus—now hangs in the balance.
Source: Autocar