Lotus Technology Inc. American Depositary Shares

Lotus Tech delivered 1,108 vehicles in the fourth quarter and 6,120 vehicles for full-year 2025, with full-year deliveries down 64% year over year. Fourth-quarter revenue was $163 million, down 40% year over year, and full-year revenue was $519 million, down 44%. Gross margin improved to 10% in Q4 from negative 11% in Q4 2024, and full-year gross margin rose to 9% from 3%. Operating loss narrowed 65% year over year in Q4 to $66 million; for the full year, operating loss narrowed 46%, net loss decreased 58%, and adjusted EBITDA loss improved 63% to $356 million from $961 million in 2024. Looking ahead, management expects the global launch of the PHEV model to drive sales and revenue growth, and said continued cost reduction and product positioning should help move the business toward profitability.

CEO Qingfeng Feng framed 2025 as a strategic transformation year and emphasized brand-building, product expansion, and market repositioning despite tariffs and geopolitical friction. He highlighted motorsports, the ECAREX strategic investment of $23 million, certifications for advanced driver-assistance systems, and the launch of the company’s first hybrid model, calling it a way to reach a broader luxury customer base. His tone was constructive and optimistic, with repeated emphasis on 2026 as a recovery year driven by the PHEV rollout, improved channel efficiency, and expansion into markets like Canada, Europe, and Brazil.

CFO Daxue Wang focused on the numbers behind the improvement: Q4 deliveries of 1,108 units, revenue of $163 million, Q4 gross margin of 10%, and an operating loss reduction to $66 million. He said the full-year gross margin rose to 9% from 3% because the company cleared aged inventory, sold more new vehicles, reduced variable subsidies, cut material costs through centralized procurement, and increased higher-margin service revenue. He also cited lower 2025 spending, including R&D at $171 million versus $275 million, selling and marketing at $153 million versus $322 million, and G&A at $136 million versus $227 million, and said these cost controls are structural and should continue to support 2026.

Analysts pressed on the steep 2025 delivery decline and whether tariffs, geopolitics, and market access issues were permanently impairing demand. Management said tariffs hurt production, pricing, and inventory management, but pointed to improved conditions in the U.K. and Canada and said the PHEV launch broadens the customer base and opens markets where BEV adoption is slower. On gross margin durability, management said services, better inventory mix, lower subsidies, and procurement savings supported 2025 margins, and they expect further improvement in 2026 despite component cost pressure. On service revenue, management said it was mainly R&D service revenue and that over 75% of it came from R&D services for first-tier OEM customers, showing strong commercialization of intellectual property.