Ask older Brits what the Lotus brand means to them and they’ll probably think of a racing car that won a series of Formula 1 titles in the 1960s and 1970s.
Times have changed a lot since then. For starters there’s no cigarette advertising of the type that allowed John Player Special to ride on the car’s successes. Lotus has disappeared from F1 too: the carmaker dropped out of high-level racing in 1994, two years before the brand was sold to Malaysia’s national carmaker Proton. In 2017, it changed hands again, this time purchased by Zhejiang Geely, which has a portfolio of international marques most notably Volvo. Now the Chinese group has announced ambitious new plans to restore Lotus to its former glories, putting it back in the same league as more venerated competitors like Porsche.
British car journalists wonder whether that’s possible, given that Lotus doesn’t have that much brand recognition any more, even in the country in which it was created. But Geely is going to invest significantly in a bid to change that, with a Vision80 strategy that takes Lotus up to its centenary in 2028.
Geely wants to build on the brand’s sports car heritage by introducing a range of higher-end passenger vehicles as well – in a similar strategy to the one successfully executed (again) by Porsche.
The plan is to launch this new ‘lifestyle’ brand from Wuhan, where Geely has operated car plants for years. The Lotus HQ will move to the capital city of Hubei province, where Geely has already invested Rmb6.3 billion ($974 million) of a planned Rmb26.3 billion in automative investment.
A new plant capable of producing 150,000 vehicles a year will manufacture all four of Lotus new EV models over the next four years. That’s a big ramp up from the 1,400 per annum currently reported by British newspapers.
First off the starting grid in 2022 will be a larger electric SUV (the Lotus equivalent to the Porsche Cayenne). In 2023 it is planning to launch a four-door coupe (akin to the Porsche Taycan), followed by a compact SUV (like the Porsche Macan) in 2025 and a sports car in 2026. The company’s UK base in Hethel, Norfolk will continue to develop the brand’s electric hypercar, the Evija.
Lotus has also just completed a funding round valuing the business at Rmb15 billion. One of the investors is EV start-up NIO, through its investment arm NIO Capital.
The hype surrounding China’s EV start-ups means that New York-listed NIO has a market capitalisation twice the size of Hong Kong- listed Geely. Founder Li Bin has been investing some of that premium on stakes in other car companies to create an ecosystem of his own. S&P Global Market data shows that in the past three months, NIO Capital also participated in the $270 million funding round for trucking start-up Inceptio Technology and a $315 million private placement in Nasdaq-listed Uxin.
Li Bin was present at the online launch of the Lotus lifestyle brand too, explaining that he decided to invest because “heroes see the world the same way”.
Chinese journalists have picked up on another link between the two companies. NIO Capital partner Yu Ning used to work at Geely and led the original acquisition of the Lotus brand in 2017. Back then Geely acquired a 51% stake in the £100 million ($138 million) deal alongside Etika Auto (owned by Malaysian tycoon Mokhtar Al-Bukhary, who also controlled the seller, DRB-Hicom).
What would Lotus founder Colin Chapman have made of it all? Lotus lost its way in the decade after he died in 1982 but he would never have envisaged that the company would come under Chinese control. Perhaps he would have approved of the move eastwards, however. One book from Japan claims that Chapman told Honda’s Formula 1 manager Yoshio Nakamura that he chose Lotus as the name for his company because he was interested in Asian philosophy while he was at university. He added that he knew that the flower signified nirvana, a state of peace and perfect happiness. Geely will be hoping that Chinese drivers feel something similar when they sit in its new range of cars.
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