Lotus Cars, the iconic British sports car manufacturer based in Hethel, Norfolk, is navigating a turbulent period as production of its Emira model remains paused since mid-May. The move stems from trade tensions, particularly the US’s 100% tariff hike on China-built electric vehicles, which has significantly impacted Lotus’s export prospects. The Emira is currently the company’s sole internal combustion engine (ICE) sports car in production.
Reports suggest that the company’s Chinese parent, Geely, has issued internal directions to wind down production at Hethel, further fueling concerns about the future of Lotus’s operations in the UK. However, a statement issued by Lotus on social media insisted: “Lotus Cars is continuing normal operations. There are no plans to close any factory.”
UK Government Steps In
The potential closure has prompted a swift response from the UK government, which is reportedly prepared to offer support to retain production on British soil. Business Secretary Jonathan Reynolds is scheduled to meet Lotus executives on Sunday, June 28, to explore possible rescue options. The Financial Times indicates that government assistance could be aimed at protecting hundreds of skilled jobs and preserving Lotus’s historic footprint in Norfolk.
US Production Strategy and Geely’s Pivot
Lotus’s parent company, Geely, is pushing to localize manufacturing in the United States to bypass trade barriers and capitalize on a more favorable market for combustion-powered performance vehicles. CEO Feng Qingfeng confirmed that Lotus is exploring partnerships to begin manufacturing in the US, with Volvo’s under-utilised plant in South Carolina—also owned by Geely—seen as a likely destination for Emira or future hybrid production.
Feng stated on the Q1 earnings call that this strategy is essential to “catch up the losses due to the tariff hike” and respond to declining EV demand globally. Lotus’s first plug-in hybrid vehicle, a revised version of the Eletre SUV, is set to debut in early 2026, initially in China.
Financial Struggles and Sales Slump
The restructuring comes amid heavy financial pressure. Lotus reported a net loss of $183 million in Q1, with debt mounting to $3.3 billion. Deliveries of its electric lifestyle vehicles—the Eletre and Emeya—fell by 31% in the first three months of 2025, and overall sales dropped 42%.
The brand’s Clerkenwell headquarters is reportedly shutting down, and its Park Lane showroom has been handed over to dealer group HR Owen, all part of broader cost-cutting measures.
Hethel’s Legacy and Future Uncertainty
Hethel has been Lotus’s spiritual and manufacturing home since 1966, with £100 million invested in recent years to modernize the site. It currently has capacity for 10,000 cars annually but only produced 5,000 Emiras last year. Originally slated to be the birthplace of Lotus’s next-gen electric sports car, the plant’s future is now under review, with EV plans postponed due to soft consumer interest.
Closing Hethel would be a blow not only to the brand’s heritage but also to the UK’s broader industrial ambitions, particularly as the government pushes to increase domestic vehicle production to 1.3 million units by 2035. The coming weeks will be critical in determining whether Lotus’s heart will continue to beat in Norfolk—or if it will shift across the Atlantic.
