Lotus Technology Inc. Q4 2025 Earnings Call - PHEV Launch and Margin Turnaround Position Lotus for 2026 Rebound

Operator: Good day, and thank you for standing by. Welcome to Lotus Technology Inc.’s fourth quarter and full year 2025 earnings conference call. At this time, all participants are in listen-only mode. After the speaker’s presentation, there will be a question and answer session. To ask a question during the session, you will need to press star one and one on your telephone. You will then hear an automated message advising your hand is raised. To withdraw your question, please press star one and one again. If you wish to ask a question via the webcast, please type it into the box and click submit. Please be advised that today’s conference is being recorded. I’d now like to hand the conference over to your first speaker today, Ms. Michelle Ma, Head of Investor Relations. Please go ahead.

Michelle Ma, Head of Investor Relations, Lotus Technology Inc.: Thank you, and welcome to Lotus Tech’s fourth quarter and full year 2025 earnings call. My name is Michelle Ma, the Head of Investor Relations here at Lotus. With me today are the CEO, Mr. Qingfeng Feng, and the CFO, Dr. Daxue Wang. Our conference call materials were issued today and are available on our Investor Relations website. We are also broadcasting this call via webcast. Before we continue, please be reminded that today’s discussion will contain forward-looking statements pursuant to the safe harbor provisions of the U.S. Private Securities Litigation Reform Act of 1995. Forward-looking statements involve inherent risks and uncertainties. As such, the company’s actual future results may be materially different from the views expressed today. Further information regarding risks and uncertainties is included in Lotus Tech’s relevant filings with the U.S. Securities and Exchange Commission.

The company undertakes no obligation to update any forward-looking statements except as required under applicable law. Please also note that our earnings press release and this conference call will include disclosure of unaudited GAAP financial information as well as unaudited non-GAAP financial measures. You can find a reconciliation of these figures in the press release available on our investor relations website at ir.group-lotus.com. With that, I’m delighted to turn the call over to our CFO, Daxue Wang, please.

Dr. Daxue Wang, Chief Financial Officer, Lotus Technology Inc.: Good morning, good afternoon, and good evening to our shareholders, analysts, and media friends. Thank you very much for joining us for Lotus’ fourth quarter and full year 2025 earnings discussion. I’m Daxue Wang, Chief Financial Officer of Lotus Tech. It’s my privilege to once again present the company’s unaudited financial results. In the fourth quarter, the company delivered 1,908 vehicles, including 1,239 lifestyle SUVs and sedans, and 670 sports cars. For the full year 2025, total deliveries reached 6,520 units. While this represents a 64% year-over-year decrease, these figures reflect a traditional year marked by the impact of tariffs, the phased start of the upgraded models deliveries, and intensified market competition. Total revenues for the fourth quarter were $163 million, a 40% year-over-year decrease.

For the full year 2025, total revenues were $519 million, down 44% year-on-year. Sales of goods fell 48% year-over-year to $463 million, driven by lower sales volume, while services revenue surged 69% year-over-year to $56 million, primarily due to the R&D service revenue. The commercialization of our intellectual properties through technical licensing and other channels has demonstrated significant market recognition of our pioneering technologies. Gross margin improved significantly to 10% in the fourth quarter, compared to -11% in the same period of 2024. For the full year, gross margin improved to 9% from 3% in 2024. This improvement was driven by the global rollout of upgraded model deliveries, a favorable shift in our sales mix, healthier inventory dynamics, and disciplined cost control. We continued our track record of disciplined cost management.

Operating loss narrowed by 65% year-over-year to $66 million in the fourth quarter. Consecutive sequential quarterly reductions in operating losses demonstrate the company’s commitment to operational efficiencies. In fiscal year 2025, lifestyle vehicles deliveries accounted for 7% of the total, with sports cars making up the remaining 30%. Deliveries were primarily driven by the China and European markets. Importantly, growth in Chinese deliveries outpaced the broader premier auto segment, underscoring the competitive strength of our product portfolio within China. By region, China accounted for 45% of full-year deliveries, Europe 34%, North America 16%, and the rest of the world 5%. In the fourth quarter of 2025, our sports car deliveries to North America achieved remarkable QoQ growth, even with a 5% local price increases. Earlier tariff hikes hit our Q2 sales hard, but the U.S. adjusting U.K. auto import tariffs down to 10% brought policy clarity.

The recovery of sports car sales in the U.S. during the third and fourth quarters fully demonstrates our strong brand appeal and the price acceptability in the region, driving a dual rebound in sales volume and gross profit margin. Research and Development expenses were $171 million for the full year, down from $275 million in 2024, reflecting targeted prioritization of our technology investments. Selling and Marketing expenses decreased to $153 million from $322 million, and General and Administrative expenses declined to $136 million from $227 million. These reductions underscore our strong commitment to enhancing operational efficiency. Together with gross profit increase in 2025, operating loss narrowed 46% year-on-year, and net loss decreased 58% year-on-year. On a non-GAAP adjusted basis, adjusted EBITDA for the full year improved by 63% year-on-year, narrowing to a loss of $356 million from $961 million in 2024.

Beyond these numbers, I would like to reiterate that we have now reduced operating expenses for multi-consecutive quarters through value-added measures. Our improved margin performance in the fourth quarter and full year of 2025 demonstrated our continued focus on cost optimization and operational efficiency, and this was also reflected in our significantly improved bottom line of results. Going forward, we expect the global launch of our PHEV model For Me to drive sales and revenue growth. Additionally, we expect that the combination of focusing on revenue growth efforts, maximizing product positioning, and enhancing margins through strict cost reductions, will allow our business to progress towards profitability and enable us to deliver long-term value to shareholders. With that, I will now turn the floor over to Mr. Feng. Thank you.

Qingfeng Feng, Chief Executive Officer, Lotus Technology Inc.: 大家好，我是莲花CEO冯庆峰。

Qingfeng Feng, Chief Executive Officer, Lotus Technology Inc.: Hello, everyone, this is Qingfeng Feng, CEO of Group Lotus.

Qingfeng Feng, Chief Executive Officer, Lotus Technology Inc.: 各位大家好，感谢大家参加莲花科技2025年第四季度及全年的业绩电话会。25年是公司战略转型的关键过渡年，面临全球市场波动、关税调整等外部挑战，我们凭借坚定的战略执行力，持续的技术创新和精细化的运营管理，实现了核心经营指标的显著改善。接下来我将从四个方面给大家介绍公司业务最新进展，包括近期重要发展的亮点、市场战略、产品矩阵和我们的全新超混车型方面上市进展。

Qingfeng Feng, Chief Executive Officer, Lotus Technology Inc.: Thank you for joining the Lotus Technology Quarter Four and Full Year 2025 Earnings Conference Call. Last year, 2025, was a really important year for us, a true turning point in our strategic transformation. Even with all the global market ups and downs and higher tariffs, we made solid progress on our core operating metrics by staying focused on smart execution, pushing technological innovation, and tightening up how we run the business every day. I’ll walk you through the latest development in four key areas, our recent highlights, market strategy, product lineup, and the progress on our new hybrid model For Me or Eletre X.

Qingfeng Feng, Chief Executive Officer, Lotus Technology Inc.: 我先给大家介绍一下近期的发展亮点，包括我们持续提升全球品牌形象的公司发展的核心要务。25年我们在业务拓展与品牌提升方面取得了多项突破的成果。

Qingfeng Feng, Chief Executive Officer, Lotus Technology Inc.: With our 78-year racing heritage, building the Lotus brand has always been front and center for us. In 2025, we scored some real breakthroughs on both the business and brand front.

Qingfeng Feng, Chief Executive Officer, Lotus Technology Inc.: 首先在赛事营销方面，首届莲花杯的车型于2025年11月在马来西亚雪邦赛道圆满落幕。44辆赛事版的莲花Emira同台竞技，作为一个单一赛事，彰显莲花百年赛道基因的强大感召力。同时，26年赛季的开始，4月3日正式开始，我们将通过这一赛事平台，持续传递这个品牌的运动精神与技术实力。

Qingfeng Feng, Chief Executive Officer, Lotus Technology Inc.: In motorsports, we wrapped up the very first Lotus Cup one-make race at Sepang International Circuit in Malaysia back in November last year. 44 race-spec Lotus Emira hit the track, and it was a sensational showcase of the brand’s racing DNA. The 2026 season actually kicks off on April three this year, and we will keep using this platform to share our motorsport spirit and cutting-edge tech with fans everywhere.

Qingfeng Feng, Chief Executive Officer, Lotus Technology Inc.: 在股权融资方面，我们获得了ECARX 2,300万美元的战略股权投资，通过资本纽带深化双方的全球战略合作。未来我们将共同加速对下一代智能座舱生态系统的创新，为用户带来更卓越的AI驱动体验，共同提升产品的核心竞争力。

Qingfeng Feng, Chief Executive Officer, Lotus Technology Inc.: In equity financing, we secured a strategic equity investment of $23 million from ECARX, deepening our global strategic partnership through capital ties. Going forward, we will jointly accelerate innovation in next-gen intelligent cockpit ecosystems to deliver AI-driven experiences to consumers and collectively enhance products’ competitiveness.

Qingfeng Feng, Chief Executive Officer, Lotus Technology Inc.: 在技术发展方面，我们的超跑SUV Eletre成功获得了联合国欧洲经济委员会颁发的R171认证，成为截至目前首款且唯一搭载高快速领航辅助功能，并获此认证的中国制造电动车型。公司也是全球第二家获此认证的车企。这一成就不仅验证了我们在高级辅助驾驶领域的技术硬实力，更为我们进一步开拓欧洲高端市场，迎来了一些机遇。

Qingfeng Feng, Chief Executive Officer, Lotus Technology Inc.: On the tech side, our Hyper-SUV Eletre became the first and only Chinese-made electric vehicle to earn UN R171.01 certification for highway navigation systems. Lotus is also only the second automaker in the world to achieve this, which is a huge validation of our advanced driver-assistance systems, and opens more doors in the premium European markets.

Qingfeng Feng, Chief Executive Officer, Lotus Technology Inc.: 在品牌建设方面，我们携手House of Automotive联合打造专属展览《IN PROGRESS》，重返2026米兰设计周。集中呈现莲花领先的工业美学理念，Theory 1的概念作品，通过深化与豪华及工业领域的跨界合作，我们持续提升品牌的全球影响力和豪华调性，让更多消费者感受到莲花科技与美学融合的品牌魅力。

Qingfeng Feng, Chief Executive Officer, Lotus Technology Inc.: On brand development, we teamed up with the House of Automotive for the exclusive In Progress exhibition at the 2026 Milan Design Week. We showcased our industrial design philosophy and the Theory 1 concept car, proving once again how Lotus blends technology and aesthetics in a way that feels luxurious and forward-thinking.

Qingfeng Feng, Chief Executive Officer, Lotus Technology Inc.: 在市场战略方面，我们公司不断完善全球市场布局，提升渠道效率。我们构建了均衡的全球四大区域的分销网络。截止12月底，全球共计211家销售门店，欧洲67家，中国58家，北美和其他地区分别为48和38家。

Qingfeng Feng, Chief Executive Officer, Lotus Technology Inc.: For our market strategy, Lotus is continuing to refine our global footprint and make our sales channels more efficient. We now have a well-balanced distribution network across four major regions. As of the end of December, we had 211 sales outlets worldwide, 67 in Europe, 58 in China, 48 in North America, and 38 in the rest of the world.

Qingfeng Feng, Chief Executive Officer, Lotus Technology Inc.: 在中国市场，我们进一步拓展网络和进行经销商的迭代升级，分别在大连开设了新网点，升级了南京、佛山、贵阳等地的经销商，让终端的服务能力和销售能力得到提升。同时，全网经销商进行人员和网点的扩容，增加线上的营销能力，实现了获客效率与客户满意度的双重提升。

Qingfeng Feng, Chief Executive Officer, Lotus Technology Inc.: In China, we kept expanding and upgrading our dealer network. We opened a new store in the city of Dalian in China and refreshed several others. Dealers have been hiring more staff, adding more outlets and ramping up our online marketing, which has clearly improved both customer acquisition and satisfaction.

Qingfeng Feng, Chief Executive Officer, Lotus Technology Inc.: 针对北美市场，我们计划在现有渠道基础上拓展加拿大的经销商网络。加拿大现有六家经销商，预计到年底将会拓展到12家。充分把握住加拿大关税的政策机遇。Eletre作为北美市场唯一定价8万美元，且完成认证的中国制造电动车型，有望在加拿大实现强劲的销售增长。我们计划于五月份正式在加拿大开启交付。

Qingfeng Feng, Chief Executive Officer, Lotus Technology Inc.: In North America, we plan to grow our Canadian dealer network on the basis of existing channels. Now we have six dealers in Canada. We are expected to expand to 12 by the end of the year, fully leveraging local tariff policy opportunities. The Eletre is the only Chinese-made electric vehicle priced above $80,000 that’s fully certified for the North American market. We expect a strong sales growth there. We will start customer deliveries in Canada in May.

Qingfeng Feng, Chief Executive Officer, Lotus Technology Inc.: 在欧洲地区，我们进行了组织结构的重组与精简，提升运营效率。同时赋能各区域，聚焦本地的市场需求，战略规划至营销推广方案落地。比如在德国推出商务版车型及车辆增值保障计划，在英国进一步拓展并培育企业用车和汽车租赁业务。

Qingfeng Feng, Chief Executive Officer, Lotus Technology Inc.: In Europe, we streamlined our organization and ran leaner and gave each region more freedom to tailor strategies to local needs. For example, we introduced the business edition models and Vehicle Value Protection Plan from Germany, and we are expanding corporate and leasing business in the U.K.

Qingfeng Feng, Chief Executive Officer, Lotus Technology Inc.: 正如我在第三季度业绩说明会所说的，公司将持续审慎加强成本控制，进行门店成本的结构调整，关闭部分低效的商超店，拓展高效能门店，降低门店的运营费用，将资源聚焦在重点市场。

Qingfeng Feng, Chief Executive Officer, Lotus Technology Inc.: As I previously mentioned in the quarter three earnings conference call, Lotus is staying disciplined on costs. We are closing a few underperforming stores, expanding the high-performing ones, and redirecting resources to the markets that matter most.

Qingfeng Feng, Chief Executive Officer, Lotus Technology Inc.: 我们的产品矩阵也不断去完善，公司通过产品和动力形式的多元化，多轮驱动公司的竞争力。拓展优势的同时，补齐短板，持续增强产品竞争力。产品矩阵的丰富升级是我们全年工作的核心亮点。

Qingfeng Feng, Chief Executive Officer, Lotus Technology Inc.: On our product lineup, we are driving product competitiveness by expanding both our product range and the powertrain options, playing to our strengths while fixing any gaps. The expansion and upgrading of the product portfolio were core highlights of our work through the year.

Qingfeng Feng, Chief Executive Officer, Lotus Technology Inc.: 2025年，Emeya、Eletre和Emeya在各大市场推出了新款，并进行全球交付，取得了良好的市场反馈。新款销量占比持续提升，助力产品销量企稳。

Qingfeng Feng, Chief Executive Officer, Lotus Technology Inc.: In 2025, new variants of Emeya, Eletre and Emira were launched and delivered in major markets, receiving positive market feedback. The sales proportion of new models continued to increase, helping stabilize product sales.

Qingfeng Feng, Chief Executive Officer, Lotus Technology Inc.: 25年，我们同时聚焦超混产品研发，并在今年一季度发布了全新超混SUV For Me，并成功在上市第二天实现交付。超混车型的出现，让主流豪华用车人群有了更多选择，也将进一步扩展莲花的市场覆盖，进入更广泛的市场，比如纯电进程较慢的意大利、西班牙、沙特等市场，同时拓展莲花的客群，拥有更广泛的用户基础。

Qingfeng Feng, Chief Executive Officer, Lotus Technology Inc.: In 2025, we also focused on hybrid product development. In the first quarter of this year, we launched our all-new hybrid SUV For Me Eletre X. Delivery started just one day after the launch. This hybrid model gives mainstream luxury buyers another great option and lets reach markets that are moving more slowly towards full EVs, like Italy, Spain, and Saudi Arabia. It’s also bringing in a broader mix of customers.

Qingfeng Feng, Chief Executive Officer, Lotus Technology Inc.: 未来我们将坚持在跑车与生活用车两个赛道，持续完善公司的产品矩阵。同时后续我们将推出更多基于路遥架构的超混车型，凭借燃油、纯电、混动多元的动力形式，满足用户多样的场景使用需求。

Qingfeng Feng, Chief Executive Officer, Lotus Technology Inc.: In the future, we will keep strengthening both the sports car and lifestyle vehicle to our lineup, and we will roll out more hybrids built on our new X-Hybrid architecture. This gives consumers real choice, combustion, battery, electric or hybrids, whatever fits their needs.

Qingfeng Feng, Chief Executive Officer, Lotus Technology Inc.: 今天我重点把For Me上市的这个产品给大家做个重要的介绍。本次重要的成果发布，莲花78年历史上首款超级混动车型For Me，在欧洲我们命名为Eletre X PHEV，以超级混动打破超跑SUV的场景限制，让用户不再为场景做选择。该车型已于2026年3月29日正式在中国率先上市，并于3月30日正式在中国开启交付。

Qingfeng Feng, Chief Executive Officer, Lotus Technology Inc.: Also allow me to share with you the progress of the launch of For Me, which is the first hybrid in Lotus’s 78 years. In the E.U., it is sold as Eletre X, like I previously mentioned. It completely changes what the Hyper-SUV can do. For Me was launched in China on March 29th, 2026, and deliveries began on March the 30th.

Qingfeng Feng, Chief Executive Officer, Lotus Technology Inc.: 除了在中国上市之前，我们也邀请了欧洲的经销商和欧洲的很多媒体到中国进行了试乘试驾，也得到了极好的反馈。

Qingfeng Feng, Chief Executive Officer, Lotus Technology Inc.: Before the launch, we actually invited the dealers and the media outlets from the E.U. to test the ride and to test drive this particular vehicle. We have received wide positive feedback.

Qingfeng Feng, Chief Executive Officer, Lotus Technology Inc.: For Me首次搭载莲花路遥超级混动架构，该架构以900伏高压平台，以七速度大电池为核心，系统总功率达到952匹马力。在CLTC综合续航超过1400公里，WLTC综合油耗仅仅有0.07升，就是百公里油耗。即使在亏电的情况下，WLTC百公里油耗也只有6.1升。

Qingfeng Feng, Chief Executive Officer, Lotus Technology Inc.: For Me runs on our X-Hybrid architecture, a 900 volt high voltage platform paired with a 70 kWh battery and a total output of 952 horsepower. In CLTC testing, it delivers more than 1,400 km of total range. Fuel consumption is just 0.7 liters per 100 km in WLTC. Even when the battery is depleted, it’s only 6.1 liter per 100 km.

Qingfeng Feng, Chief Executive Officer, Lotus Technology Inc.: For Me凭借强大的动力，能够实现零百加速只需要3.3秒。更重要的是，即使在电量亏电的情况下，仅剩10%亏电的情况下，零百加速仍可以达到3.5秒。这个性能永远不再和电量绑定，无论满电还是亏电，性能永远都是在线。同时这个百公里的刹停距离也做到了33.9米，即使连续12次全力重刹，依然优于国际标准。不仅如此，莲花For Me的四档主动可变尾翼可在170公里的时速下，紧急制动时还可以变成空气刹车，提供120公斤的下压力，辅助缩短制动距离。在高速制动工况下，进一步辅助提升车身稳定性和制动表现，为驾驶者带来极致的安全保证和驾控信心。

Qingfeng Feng, Chief Executive Officer, Lotus Technology Inc.: From zero to 100 km per hour, Lotus For Me electric only takes 3.3 seconds, and even when the battery is down to 10%, it still hits 3.5 seconds. In other words, performance stays strong no matter the battery level. Braking is equally impressive, 100 to zero km per hour in just 33.9 m, and the car stays above international standards even after 12 heavy stops in a row. Plus, at high speeds, the four-speed active rear wing can flip into air brake at 170 km per hour, generating 120 kg of downforce to help shorten the stopping distance and keep the car stable, bringing safety protection and driving confidence to drivers and passengers.

Qingfeng Feng, Chief Executive Officer, Lotus Technology Inc.: 蜂蜜继续发扬莲花的空气动力学的优势，在这个方面上延续了家族式的空气设计语言，低趴的姿态，夸张的风道，每一处线条都服务于空气动力学。全车有四组八条race aero真实的贯穿式风道，利用文丘里效应增加下压力，包括低于26度的挡风玻璃设计，可以有效降低空气阻力。

Qingfeng Feng, Chief Executive Officer, Lotus Technology Inc.: Aerodynamics remains a Lotus signature. For Me carries forward our porosity design language with a low purposeful stance and functional air ducts. Every line has a purpose. Eight race aero ducts use the Venturi effect to boost downforce, and the 26-degree windshield angle cuts drag effectively.

Qingfeng Feng, Chief Executive Officer, Lotus Technology Inc.: 下半年方面，将逐步推向全球市场。欧盟市场的批售业务将于2026年10月底启动。中东市场的车型认证工作预计今年年底前完成。我们计划今年10月在中东开启预售，11月正式在该区域上市，并于12月启动交付。英国市场批售业务预计在2027年的年中开启。

Qingfeng Feng, Chief Executive Officer, Lotus Technology Inc.: For Me will be gradually launched to the global market in the second half of the year. Wholesale deliveries in the E.U. start at the end of October. Certification for Emeya will wrap up by year-end, with orders opening in October, official launch in November, and deliveries in December. In the U.K., we expect wholesale to begin in mid-2027.

Qingfeng Feng, Chief Executive Officer, Lotus Technology Inc.: 展望未来，我们将继续加速产品迭代与市场扩张，一方面推动Emeya车型的全球交付放量，同时按计划推进后续车型的研发与上市，丰富产品矩阵。另一方面，深化全球渠道布局与技术合作，持续提升品牌和全球的影响力。

Qingfeng Feng, Chief Executive Officer, Lotus Technology Inc.: Looking ahead, we will keep accelerating product updates and market expansion. On the one hand, we will ramp up for global deliveries and at the same time advance the R&D and launch of new models as planned. On the other hand, we will deepen our channel partnerships and technical collaborations to make the Lotus name even stronger worldwide.

Qingfeng Feng, Chief Executive Officer, Lotus Technology Inc.: 再次感谢各位的关注与支持，接下来将时间交给主持人，欢迎大家进行提问，谢谢。

Qingfeng Feng, Chief Executive Officer, Lotus Technology Inc.: Thank you again for your time and support. I will now hand it back to the host for your questions.

Operator: Thank you. We will now begin the question-and-answer session. As a reminder, to ask the question, please press star one one on your telephone and wait for your name to be announced. To withdraw your question, please press star one one again, and if you wish to ask a question via the webcast, please type it into the box and click submit. There may be a short pause while we compile the Q&A roster. Once again, that’s star one one for questions. We will now take our first question from the line of Laura Li of Deutsche Bank. Please ask your question. Laura, your line is open.

Laura Li, Analyst, Deutsche Bank: Hey, thank you for taking my question. I want to ask about the total deliveries of 2025. We actually went down year-on-year by almost a half. What are the main drivers of this volume decline in 2025? How should we think about the potential impact of the geopolitical situation on future sales?

Qingfeng Feng, Chief Executive Officer, Lotus Technology Inc.: 首先，今年整体确实下滑，我们也受到了一些各种因素的影响。首先是关税，由于关税的不确定性给我们带来了很大的影响，为公司的库存管理生产也带来挑战。比如说英美关税，就是美国和英国的关税，导致我们的交付量下滑了有60%左右。电动车由于欧洲的关税和美国关税也分别影响了我们在欧洲的销售定价。美国这个市场基本上就进入不了了。同时在关税的影响下，对我们的库存也造成了一些压力，清库和旧款产品的过渡。为了应对2024年下半年不确定性，我们开展了主动的清库政策，同时也调整了一下产品线，推出了一些新的产品。新产品由于物流等时间进入各大市场，这个销量也同比有所下滑。2025年清库取得了一些进展，欧洲这个库存和经销商库存都显著下降了40%，库存回归到了一种健康的水平，为2026年发力奠定了一些基础。同时我们制定了小而美的战略，让我们的利润有所回升。

Qingfeng Feng, Chief Executive Officer, Lotus Technology Inc.: Yes, I do see there’s a decrease, delivery volume decrease year-on-year, and it has been affected by lots of elements. The first one is the uncertainty of the tariffs. It has negatively impacted our production and also inventory. For example, the U.S. tariff to U.K.-made vehicles affected our volumes about 60%. In addition to that, the E.U. and U.S. tariffs against Chinese-made EVs have also exerted a pressure on our pricing in E.U. For the U.S. market, basically, it is impossible for us to enter. Those are influences. They have also affected our inventory management and our destocking progress. We actively started the destocking in 2025 and adjusted our product lineup. After the adjustment, the logistics have also taken some time and leading us to some late entry to some markets.

In 2025, our stock level has been reduced dramatically by 43% to a very healthy level, and it sets a very solid ground for 2026. In addition to that, we’ve also adopted a lean but efficient organization to help us boost our profit margin.

Qingfeng Feng, Chief Executive Officer, Lotus Technology Inc.: 虽然受地缘政治的影响，但其中我们也看到了一些机遇，比如美国和英国关税已经得到了解决，尤其是美国对英国的关税降低到了10%。这样的话，我们Emira在美国的销量得到了比较好的一个恢复，恢复到了一个正常的一个水平。同时，加拿大也宣布了针对中国电动车关税从原来的100%降到了6.1%。那么这样的话，我们在北美的，尤其是在加拿大的渠道就可以再去拓展。那么也正是基于我们过去Eletre在美国的认证的先机，可以第一波抢到加拿大的红利。目前还有一个比较好的就是我们Eletre PHEV、Eletre X PHEV上市以后，目前欧洲对中国的PHEV关税仍然保持10%的基础关税。这对我们下半年，10月份我们的PHEV进入欧洲市场还是非常有利的。我认为都是比较好的机遇。

Qingfeng Feng, Chief Executive Officer, Lotus Technology Inc.: Despite the negative impact of geopolitics and tariff, we do see some new opportunities. For example, the tariff between U.S. and U.K. have been settled. U.K.-made vehicles to the U.S. will be charged a 10% tariff and it is beneficial news for our Emira sales. Actually, the Emira sales in the U.S. have been recovered to a normal status. In addition to that, Canada have also announced a policy towards China-made EV. The tariff will be lowered from 100%-6.1%. It is conducive to our exploration in North America. Given we have already certified our Eletre for the U.S., it’s a good opportunity to leverage such chance to boost our sales volume. In addition to that, for our PHEV, E.U. at this moment currently kept 10% tariff to Chinese-made PHEV.

This is also a good window of opportunity for us to launch PHEV in October to E.U. markets.

Qingfeng Feng, Chief Executive Officer, Lotus Technology Inc.: 虽然在美国和欧洲受到了这种关税的影响，但是我们在中国2025年表现还是不错的。中国的交付量从2800多辆增长到2900多辆，同比增长了3%，增速整体跑赢了中国豪华车市场。中国豪华车40万以上的乘用车市场是同比跌了4.4%，但是我们同比增长了3%，说明莲花在我们的产品还是非常具有竞争力。在这种激烈的竞争环境中，能够保持稳定的增长还是来之不易的，也说明了莲花这个品牌也逐步能够得到加强。

Qingfeng Feng, Chief Executive Officer, Lotus Technology Inc.: Despite the challenges that we’ve seen in the U.S. and E.U. markets, we do see some positive feedback from China markets. Our sales volume has been increased from 2,800-2,900, an increase of 3% year-on-year. Actually in 2025, the luxury market in China priced over RMB 400,000 dropped to 4.4%. In that circumstances, we actually kept a 3% increase. It is a demonstration that Lotus product is very competitive. We can achieve stable increase in such a fierce competition and the brand of Lotus have been gradually recognized in China market.

Qingfeng Feng, Chief Executive Officer, Lotus Technology Inc.: 尤其是2026年，我们这个超级混动推出以后，就可以进入到更广泛的市场。比如说纯电进程比较慢的意大利、西班牙，可以得到更广泛人群的喜欢。对纯电车有里程焦虑的人就可以选择这种超级混动。所以说未来我们预期2026年能够得到有效的体现。

Qingfeng Feng, Chief Executive Officer, Lotus Technology Inc.: In 2026, as we are going to roll out the PHEV in different markets, it will help us to reach a wider market, for example, some markets with a slow adoption of EV such as Italy or Spain. It will also help us to touch a wider customer group who may have a range anxiety about battery electric vehicle. In the future, we are pretty confident that 2026 is going to be a year for Lotus to recover.

Qingfeng Feng, Chief Executive Officer, Lotus Technology Inc.: 同时我们也在拓展新的市场，比如说像巴西市场，我们巴西已经布局了经销商，门店预计在年中开业，第一批车已经批售出去。

Qingfeng Feng, Chief Executive Officer, Lotus Technology Inc.: In addition to that, we are also exploring new markets such as South America, Brazil. We’ve already had a dealer there. The shop is going to be opened in middle this year, and the first batch of the vehicle has been wholesale.

Qingfeng Feng, Chief Executive Officer, Lotus Technology Inc.: 虽然地缘政治有很大的影响，但其中我们也看到了一些机遇。谢谢大家。

Qingfeng Feng, Chief Executive Officer, Lotus Technology Inc.: Again, in summary, despite those negative influence from last year, we see some positive opportunities lying ahead. Thank you.

Laura Li, Analyst, Deutsche Bank: Appreciate the color. Just to follow up on this volume perspective. After the launch of Lotus For Me, the PHEV model, which should have started deliveries by the end of last month, could you provide an update on the current order intake and delivery progress? Could you elaborate more about the volume expectation and the strategic positioning of the PHEV model? Thank you.

Qingfeng Feng, Chief Executive Officer, Lotus Technology Inc.: 在29号上市以后，总体我们订单量还是符合公司预期的。尤其是For Me，是莲花78年来的首款插电混动车型，它也重新定义了这种真正的高性能，能够兼顾日常，让用户能够有更多的这种场景的选择和应用，从而拓展了用户群体。现在我们在核心平台上，品牌人群资产增长了五倍。其中For Me这个咨询类的群体在抖音平台达到了行业前20。在垂类平台上，For Me的日均关注在全国50万以上的SUV排名已经达到了第十，完成了曝光度，用户的曝光度。同时对我们品牌的认知度也达到了历史的高点。

Qingfeng Feng, Chief Executive Officer, Lotus Technology Inc.: After the launch For Me on 29th of March, the order status is actually tally our expectation. For Me is the first hybrid model of Lotus in the past 78 years. It redefined the Hyper-SUV to cover all scenario. This is one of the reasons that we can reach a wider customer group. Our consumer assets have been increased by five times. On the Douyin, the TikTok equivalent platform, we ranked the 20th on the vehicle consultation targets. On other integration platform for the vehicle priced above RMB 500,000, we ranked the 10th. In other words, those indicates that For Me and Lotus gains greater visibility and exposure and wider brand recognition.

Qingfeng Feng, Chief Executive Officer, Lotus Technology Inc.: 那么在中国40万以上的混动SUV销量还是在持续增长的，比如2023年的销量是14万辆，到2024年这个销量已经达到了28万辆，增长将近100%。那么豪华车市场普遍下滑的情况下，混动车型能够保持增长，那么2025年也同样得到了一个增长，增长能够达到了28万辆，将近29万辆。这个说明混动车型在中国正是发展的时刻。

Qingfeng Feng, Chief Executive Officer, Lotus Technology Inc.: For PHEV, particularly PHEV SUV priced above RMB 400,000 in China, we see a trend of increasing. In 2022, the total volume of such segment is around 140,000. In 2024, it increased to 280,000. In 2025, we see it is getting closer to 290,000. In other words, for PHEV in China now it is a good time to enjoy the benefits.

Qingfeng Feng, Chief Executive Officer, Lotus Technology Inc.: 更重要的是，通过For Me这个车型，莲花的用户群体得到了拓展。过去买我们电动车的，大多都是企业主，以企业主为主。现在更多的企业高管在关注我们的车型，购买我们的车型，同时年龄群也得到了拓展。过去我们的年龄群比较年轻，现在的年龄群年龄也在往上增长，这样的话真正得到了有效的人群的扩展。

Qingfeng Feng, Chief Executive Officer, Lotus Technology Inc.: Notice when we helped Lotus to reach a wider customer group. In the past, the customers who are interested in our BEV offerings are most entrepreneurs and business owners. Now the company management actually shows their interest in our product. For our target customer age group, previously, it’s a bit younger. Now we reached to a more senior age level.

Qingfeng Feng, Chief Executive Officer, Lotus Technology Inc.: 包括我们的正反向排名上来讲，宝马X5的用户，还有保时捷卡宴的用户，成为我们最高的关注度。

Qingfeng Feng, Chief Executive Officer, Lotus Technology Inc.: Among all those customer group, the owners of the BMW X5 and also Porsche Cayenne shows greatest interest on our products.

Qingfeng Feng, Chief Executive Officer, Lotus Technology Inc.: 同时这款车下半年在欧洲交付，欧洲的插混车型增长也是非常快的，尤其是随着排放的要求越来越严苛，欧洲的新能源渗透率和中国一样在提速。目前欧洲对中国的PHEV仅收10%的基础关税，那纯电的话是目前我们是28.8%，相当于关税上能够有18.8%的关税的优势。所以说这也是我们在欧洲是一个非常好的一个窗口期，欧洲的经销商也非常有信心。

Qingfeng Feng, Chief Executive Officer, Lotus Technology Inc.: We are going to launch this For Me or Eletre in the second half of the year to E.U. market. For E.U. market per se, the PHEV penetration rate is also getting higher given the emission regulation is getting stricter. The tariff for Chinese-made PHEV in E.U. is 10% and for Chinese-made EV is 28.8%. There’s a difference of 18.8%, which means this is a good opportunity that we can leverage.

Qingfeng Feng, Chief Executive Officer, Lotus Technology Inc.: 我们欧洲的插混车型也在不断地持续地增长。这个2025年比2024年有显著的7.2%的一个显著的增加。销量主要来自于西班牙、意大利、德国等这些核心市场。尤其是2025年的12月份，插混动力车型同比增长了36%。

Qingfeng Feng, Chief Executive Officer, Lotus Technology Inc.: In the E.U., PHEV are increasing, particularly from 2024-2025. There’s an increase of 7.2% in some major cities, Spain, Italy and Germany. In 2025, December itself, we see an increase of 30% year-over-year.

Qingfeng Feng, Chief Executive Officer, Lotus Technology Inc.: 推出的这个混动车型将使公司的产品矩阵更为完善和平衡。它重新定义了以动力形式划分的目标市场区域，让主流豪华用车人群有更多的选择。超级混动车型与纯电车型针对不同的细分市场，将其推出，进一步拓展我们的市场覆盖面，进入更广泛的市场，比如说意大利、西班牙。

Qingfeng Feng, Chief Executive Officer, Lotus Technology Inc.: Overall speaking, the PHEV is going to help us to have a well-balanced product lineup and product portfolio and give our targeted luxury consumers more options to choose. The BEV and PHEV from Lotus will help us to acquire more market share and wider market coverage.

Qingfeng Feng, Chief Executive Officer, Lotus Technology Inc.: Thank you.

Laura Li, Analyst, Deutsche Bank: Okay, got it. Appreciate it.

Operator: Thank you. We will now take our next question from Brian Lantier of Sachs Small Cap Research. Please ask your question, Brian. Your line is open.

Brian Lantier, Analyst, Sachs Small Cap Research: Great. Thank you for taking my question. It was really encouraging to see the improvement in gross margin, going up to 9% for the full year and 10% in Q4. Obviously, services appear to have driven a lot of that. How recurring do you think that is? Do you have any guidance for 2026 gross margins?

Dr. Daxue Wang, Chief Financial Officer, Lotus Technology Inc.: Thank you, Brian. The company’s gross margin improvement in 2025 is driven by three key factors. First, as Qingfeng Feng has just elaborated, we successfully cleared aged vehicle inventories in the first half of the year. The second half saw a higher proportion of new vehicle sales and a significant reduction in overall variable sales subsidies. Second, we continuously reduced material costs through Geely’s centralized procurement platform. Third, we increased the share of the high-margin service revenue, which lifted the overall gross margin. Now looking ahead to 2026, despite significant external headwinds such as continued price increase for core components like batteries and chips, which will put pressure on our gross margin, we expect total procurement costs, production costs, and unit D&A to all decline. At the same time, we expect to maintain the overall production pricing at current levels, leading to further gross margin improvement.

Qingfeng Feng, Chief Executive Officer, Lotus Technology Inc.: In addition, the ongoing merger with the U.K. Lotus Cars is expected to enhance the production and efficiency and further support our gross margin growth. Thank you.

Brian Lantier, Analyst, Sachs Small Cap Research: Great. Thank you. That’s helpful. Obviously, operating expenses were cut significantly in 2025, which helped to narrow your operating loss. Could you talk about any key cost control measures that you’ve implemented and whether you feel like they’re sustainable in 2026?

Dr. Daxue Wang, Chief Financial Officer, Lotus Technology Inc.: Yeah. Thank you. The company’s cost control plan consists of structural long-term initiatives rather than these temporary measures.

Qingfeng Feng, Chief Executive Officer, Lotus Technology Inc.: On the R&D front, the company fully leverages Geely’s R&D and resources, enabling us to reduce investment in general-purpose technologies and focus on catalyzing technology development, thereby improving our R&D efficiency. On the marketing front, the company dynamically and flexibly manages marketing spend to enhance marketing efficiency, as Mr. Feng has elaborated. On the management front, the company strictly controls administrative expenses, streamlines the organizational structure, and optimizes the personnel management frameworks to improve operational efficiency. We believe these factors will continue to play a positive role in 2026. Thank you.

Brian Lantier, Analyst, Sachs Small Cap Research: Great. That’s all I had. Thank you.

Operator: Thank you. Thank you very much for the questions. I’ll now turn back to the room for questions from the webcast.

Michelle Ma, Head of Investor Relations, Lotus Technology Inc.: Thank you for all the questions via conference call. We will now be answering investor questions via webcast. Our first question is, service revenue grew 69% year-over-year in 2025. What are its core breakdown and the key drivers behind?

Dr. Daxue Wang, Chief Financial Officer, Lotus Technology Inc.: Yeah, I’ll take this question. The company’s service revenue primarily consists of R&D service revenue and vehicle service income. In 2025, R&D service revenue accounted for over 75% of the total, with the customers including first-tier OEM manufacturers. This fully demonstrates the market’s strong recognition of the company’s R&D capabilities and as well as the company’s ability to commercialize our intellectual properties. Thank you.

Michelle Ma, Head of Investor Relations, Lotus Technology Inc.: Our second question from the webcast is, what’s the implication that the recent rise in global oil price has on the company?

Dr. Daxue Wang, Chief Financial Officer, Lotus Technology Inc.: Well, I think it’s good news overall for new energy vehicle and a good opportunity for us, particularly for PHEV, because For Me, our first PHEV model can be solely driven by gasoline, fuel, or solely driven by battery. It cater all different types of needs from our consumers. Its consumption of both the fuel and electric are very low. As I previously mentioned, the comprehensive fuel consumption is only 0.7 liters per 100 km. Even at the depleted status, the fuel consumption is only 6.1 liters per 100 km. Overall, this is a good opportunity for us to catch. Especially in the markets such as Middle East, where the charging infrastructure has not been very mature, the BEV adoption rate is slow. In those markets, we believe the PHEV model For Me is going to play an important role.

Of course, we do see some headwinds given the hikes of oil price. For example, the cost of our supply chain might be increased, and the BOM cost might be also increased correspondingly. Those are some negative influence we may see. Some of these established luxury OEMs may take this opportunity or feel the pressure to accelerate their pace into PHEV arena, such as we see Porsche has been releasing the Cayenne BEV model, and we also see the Volkswagen Group are launching some range extender models. Of course, for Lotus, we would keep demonstrate our spirit to be differentiate and the customization and play a leading role in this front. Thank you.

Operator: of the question and answer session. With that, I’ll now hand the conference back to Ms. Michelle Ma for her closing comments.

Michelle Ma, Head of Investor Relations, Lotus Technology Inc.: Thank you all again for joining us today. We will conclude the call now. The Investor Relations team remains available to answer any further questions that you may have. Please feel free to contact us through the contact information on our website. Have a great day. Thank you.

Operator: Thank you for your participation in today’s conference. This does conclude the program. You may now disconnect your line.