Coinciding with the earnings season, Lotus has delivered an impressive 'answer sheet'.
With the continuous ramp up of delivery of lifestyle vehicles, Lotus' revenue in the first half of this year also increased more than twice year-on-year to 398 million US dollars, and its gross profit margin increased from 5% in the same period last year to 13%. In addition to car sales, First Financial reporters noticed that service revenue has also become an important new growth pole for Lotus' performance in the first half of the year. In the first half of the year, Lotus achieved service revenue of $15 million, a year-on-year increase of 194%, and the gross profit margin of service revenue was very impressive, reaching 58%, compared to 16% in the same period of 2023.
Regarding this, Lotus Group CEO Feng Qingfeng recently stated in an interview with First Financial reporters that service revenue comes from Lotus Engineering, which will undertake lightweight, aerodynamic, and tuning work externally; But Lotus' biggest engineering service revenue this year comes from intelligent driving. Compared with other Chinese car manufacturers' intelligent driving solutions, Lotus' advantage lies in overseas markets, where it can cover the world with a single solution. Currently, it has entered Europe, the United States, South Korea, Japan, and the Middle East.
After the automotive industry entered the era of intelligence, whether intelligent driving is the "soul" of a car company has become a key issue in the industry. The most classic case is undoubtedly the answer given by Chen Hong, former chairman of SAIC Group, when asked if SAIC would consider cooperating with third parties such as Huawei in the field of autonomous driving. He believes that this is equivalent to handing over the soul to others, leaving the car company with only its body.
SAIC Group's concerns about third-party intelligent driving solutions actually represent the ideas of many car companies.
Regarding this, Feng Qingfeng explained to reporters that Lotus' strategy is different from others. The intelligent driving solution is delivered in a "white box", Lotus is an open platform, and car companies make personalized adjustments. In this way, the soul still belongs to the car company, and the software and intellectual property belong to Lotus. Under such a strategy, car companies don't have to worry about their souls being controlled by others, and Lotus is also unwilling to control someone else's soul
It is reported that Lotus has received an order from a major OEM (OEM) manufacturer in Europe. Based on the existing order volume, Lotus expects that the revenue from intelligent driving external services is expected to be around 60 million US dollars this year, and will further increase to around 100 million US dollars next year.
At the same time as the release of this financial report, Lotus also launched the "Win26" plan to further optimize internal processes and structures, implement overall cost control, and plan to achieve EBITDA (earnings before interest, tax, depreciation, and amortization) and operating cash flow conversion by 2026.
Lotus Technology CFO Li Kunlong told reporters that to achieve the above profit goals, Lotus needs to achieve an annual sales volume of around 30000 vehicles and a gross profit margin of 20% by 2026. Lotus is accelerating cost reduction and efficiency improvement around this goal. In terms of revenue, in addition to the rapid growth of service revenue mentioned above, Lotus' sales are also expected to gradually climb. On the one hand, with Lotus obtaining certification in more and more markets around the world and expanding its channels, overseas sales are expected to continue to increase; On the other hand, Lotus is also creating limited edition models with high profit margins. In terms of cost reduction, Lotus achieves cost control through scaling, system optimization, and digital management.
Lotus has always adhered to the strategy of not participating in the current hot price war. Li Kunlong said that car companies need to adhere to pricing discipline because once they start lowering prices, the brand will lose its brand premium. Not only did Lotus not lower its prices, but after the EU imposed tariffs on imported electric vehicles from China, it also chose to raise prices in the European market.