Lotus Cars’ reputation for navigating from one crisis period to another doesn’t seem to come to rest under Geely’s Chinese ownership. The company confirmed to the BBC that it will reduce its workforce at its headquarters in Hethel by more than 40%. The company cites that US tariffs, rising costs, and faltering demand are the main culprits.

The sports carmaker confirmed that up to 550 roles would be lost at its European headquarters site, which employs around 1,300 people. The cuts come only months after 270 redundancies were announced in February.

The company has been going through a turbulent period. A few months ago, all UK divisions were consolidated under one umbrella to streamline operations following Geely’s exercise of its put option. This major restructuring was already a sign of trying to cope with the new geopolitical challenges.  

‘Rapid changes’

Lotus announced the new restructuring was “necessary to secure a sustainable future” amid “rapid changes in global policies, including tariffs”. The company insisted it remained “fully committed” to the UK, stressing that Hethel would continue to serve as the base for its sports car production, motorsport operations, and engineering consultancy.

Speculation about the future of the Norfolk plant has been headstrong recently. In June, Lotus dismissed reports that it was preparing to close the factory and shift production to the US. But it has not ruled out building vehicles in North America, where punitive import duties have become a significant obstacle.

British carmakers have been hit hard by the wave of tariffs imposed by Donald Trump in April, part of his push to bring more manufacturing back to the US.

A deal agreed between London and Washington in June reduced the tariff on UK-built cars from 27.5% to 10% – but only up to 100,000 vehicles per year, and still higher than before.

Falling sales

The financial strain on Lotus is clear. Total debt has climbed to 2.8 billion euros, despite efforts to rein in costs. Sales fell by more than 40% in the first quarter as the company phased out older models and struggled to ramp up production of new electric cars.

Its last gasoline model, the Emira, has been hit by delays and a higher-than-expected price tag. At the same time, its China-built EVs, the Emeya and Eletre, have failed to make significant inroads in Western markets.

MP representatives described the announcement as “a punch in the stomach”. “It is terrible news, but the worst-case scenario has been avoided – a complete and utter closure of Lotus UK.”

Lotus, founded in the 1950s by Colin Chapman and based at Hethel since 1966, has long been a source of pride in Norfolk but has also endured repeated financial crises. Geely’s takeover in 2017 initially inspired optimism that the company could be revived, as it had been with Volvo.

Now, with jobs disappearing and losses mounting, the brand faces another fight for survival.