Lotus Technology Inc. ($LOT)

Hello, and welcome to the 30th Deutsche Bank Deposit Receipts Virtual Investor Conference, dbVIC. My name is Zafar Aziz from the DR Investor Relations Advisory team at Deutsche Bank. I'm pleased to announce that our next presentation will be from Lotus Technology. Before handing over to our presenter, some points to note. Please submit your questions at any time throughout the presentation. Finally, all of today's presentations will be recorded and can be accessed by the Deutsche Bank website, adr.db.com. At this point, I'm very pleased to welcome our speaker from Lotus Technology.

Hello. Good morning, afternoon, and dear investors, partners and friends, welcome to Lotus Tech 2026 Investor Presentation. My name is Daxue Wang, the Chief Financial Officer of Lotus Tech. Today, we will walk you through our iconic heritage, product portfolio, global footprint, operational progress, 2025 financial performance and our path to sustainable growth. Thank you so much for being here and for your continued support in Lotus Tech. And before we begin, please allow me to remind you that this presentation is for information purpose only, contains forward-looking statements and does not constitute an offer to sell or solicitation to buy securities. Our figures and projections are subject to risks and uncertainties, and actual results may differ. Please refer to our SEC filings for full details. And today, I want to begin with our core investment highlights that makes Lotus Tech unique and compelling players in the global luxury vehicle market. First, we are a legendary racing heritage since 1948. So Lotus is not simply an automaker. We are a pioneer with 41 Formula 1 Grand Prix winners, a legacy deeply rooted in engineering, excellence, aerodynamics and also lightweight innovation. This heritage gives us irreplaceable brand prestige that only few players can match. And second, a diversified and premium product portfolio. We currently have 5 existing models across hypercars, sports cars, luxury SUVs and high-performance sedans with additional key model under development. This lineup covers full battery electric vehicles, plug-in hybrid solutions and our iconic sports cars, allowing us to address different customer needs and global market demand. And third, we have established global commercial infrastructure. We have built over 200 retail stores worldwide with a balanced presence across China, Europe, North America and other key markets. More than 50% of our deliveries come from outside China, proving our true global competitiveness. And fourth, we have a strong premium pricing power. In 2025, our average selling price exceeded USD 80,000, positioning us firmly in the ultra-luxury segment. This high ASP supports our margin structure and long-term profitability road map and fifth significant financial improvement in 2025. We achieved USD 519 million in total revenue and delivered over 6,500 units. Most importantly, our adjusted EBITDA loss narrowed by 63% year-on-year basis, reaching negative USD 356 million. Our gross margin turned positive and expanded to 9% for the full year with further improvement in the fourth quarter. So overall, these 5 pillars, iconic brand, global sales scale, premium positioning, product diversity and improving financials collectively demonstrate that Lotus Tech is moving from a growth stage company to a structurally improving investment worthy enterprises in the luxury auto industry. So next page. So let's turn to the foundation of our success, the Lotus brand. Since 1948, Lotus has built an extraordinary motor sports legacy. We have claimed 7 Formula 1 Constructors' Championships, 6 Drivers' Championships, 9 Le Mans, Indianapolis 500 Victory, and while we already, as you know, names like Jim Clark, Senna, Mario Andretti are part of our story. So this [indiscernible] recent DNA defines every vehicle will produce, pure performance, precision handling, aerodynamic mastery and lightweight engineering. And next page. Today, we are executing a historic evolution from a U.K.-based niche sports car manufacturer to a global sustainable luxury EV technology leader while transforming born British and raised globally into reality by combining British brand heritage, German engineered qualified standards and Chinese manufacturing efficiency and global commercial capabilities. Next page. A cornerstone of this strategy is about Lotus. We are steadily advancing the strategic acquisition of Lotus U.K. expected to close in 2026. This integration will unify our brand identity, streamline governance structure, eliminate redundant investment, optimize R&D efficiency, integrate supply chains and allow powerful long-term operational and financial synergies. Next page. In the global luxury automotive landscape, Lotus stand alongside Ferrari, Porsche, Aston Martin and other top premier brands. Our positioning are clear, modern, sustainable performance-driven luxury, we do not just build cars. We deliver a lifestyle rooted in raising passion, technological innovation and environmental responsibilities. Next page. From now, I'm going to start on the technology advances of Lotus Tech. Technology is where Lotus differentiates itself and maintains leadership. Our leader -- our technology advantages are built on 3 pillars: aerodynamics, lightweighting and Lotus engineering, high-performance electrical architecture and intelligent digital systems. First, you see a heritage of aerodynamics and lightweight engineering, the soul of Lotus. We inherit Formula 1 proven aerodynamic design, including active airflow management and ground effect technology. Our vehicles use aluminum alloy, carbon fabric and 17 advanced welding technologies to achieve exceptional rigidity at minimum weight. Lightweight directly improves acceleration, handling, energy efficiency and range, key advantage in the current -- especially in this current EV era. On next page. Second, we have a high-voltage electric performance. We own 800 voltage, high-voltage architecture and energy hybrid EV technology, supporting ultrafast charging, high power output and excellent thermal management. Please turn to the next page. Our battery systems, dual speed transmissions and integrated chassis control, including rearview steering and also active roll controller deliver track level performance while maintaining daily drivability. And third, intelligent connectivity and physical architecture. Our Hyper OS self-developed intelligent driving systems, high-speed ethernet et cetera, create seamless, safe and premium user experience. So data security, privacy, protection and localized computer ensures compliance and performance worldwide. So these technologies are not just the features, they are the competitive modes that strengthen our pricing power, customer loyalty and margin expansion potentials. Next page. Yes, from this page, you can see our product -- current product portfolio. So it's the most comprehensive in Lotus history. Currently, we have 5 existing models and one model under development. Let's walk through those the key models. Next page. So the first few pages are just the -- you can see the historical modules of Lotus. So I'm not going to spend too much on this, and that directly goes to the current existing models on sale. So the first one is going to be the Evija. So can you please just jump in that page. Sorry, I don't see the presentation. So if you can just skip to the Evija page.

Dr. Wang, I see that it's on the Evija page on Slide 14.

Let me take a look. Anyway. So Evija is -- yes, right, this page, sorry for that. The first British all-electric hypercar with over 2,000 horsepowers. The 0 to 300 kilometers per hour acceleration in just 9.1 seconds with a top speed of 320 kilometers per hour that represents the peak of the electric hypercar performance. The next page for Emira. Emira is our most acclaimed modern internal combustion sports car, winners of numerous Car of the Year awards, delivers pure driving pleasure and marks a successful legacy chapters. And next page is for Eletre. That is the world's first all-electric hyper SUVs with 905 horsepowers, the acceleration rate from 0 to 100 kilometers per hour is only less than 3 seconds, 600 kilometers WLTP range and charging from 10% to 80% only takes 20 minutes. So this product actually redefines the performance in the luxury SUV segment, a claim that the most popular luxury SUVs in China and also in the worldwide. And next one is for Emeya. Emeya is our ultra-luxury hyper GT sedan. So it's winner of the Red Dot Design Award that combines extraordinary comfort, luxury and track-ready performance and targeting high-end global consumers. On next page, most importantly, we recently launched Lotus For Me known as Eletre X in Europe. As our first PHEV model under the new Lotus tuning standard, highlights include the following: the acceleration from 0 to 100 kilometers per hour only 3.3 seconds, the combined driving range over 1,400 kilometers, ultra-low WLTC fuel consumption and signature aerodynamic design with active rear spoilers generating up to 120-kilogram downforce. And For Me started delivery in China in March 2026. European wholesale will start in late 2026 with U.K. launch in mid-2027. The Middle East will follow in late 2026. This hybrid products are a strategic growth driver that broadens our customer base and supports volume expansion in key markets. So we look forward to the delivery of the For Me worldwide in I think mostly, I mean, less than 2 years. So from this you can tell that our product pipeline remains strong with continuous upgrades and new modules planning through 2030, and we will maintain our leadership in performance design and technology. Okay. Please go to the page for the global distribution network. Are we already in that page?

Yes, I believe so.

Okay. So we have built a balanced high-quality global retail network. As of fiscal year 2025, we have over 200 stores. Among the 67 stores in Europe, 58 in China, 48 in North America and 38 in the rest of the world. So this network supports consistent customer experience and delivery capability across the continents. Over 55% of our deliveries came from outside China, so showing a strong global brand appeal. Our customer base is also evolving. For the next page. We retain loyal racing fans and performance pursuit while rapidly expanding to a new generation of clients, emerging high net worth individuals, younger drivers, professional women, tech-savvy consumers, and buyers who value unique, responsible car luxuries. So this customer diversification supports sustainable long-term growth of the Lotus. On next page, I want to spend some time on the Geely partnership. Can I please skip to that page. Our strategic partnership with Geely is a critical competitive advantage of us. We operate asset-light model supported by Geely's world-class manufacturing, supply chain, procurement and engineering resources. This structure allow us to focus on brand building, product definition, R&D and commercial execution while minimizing the capital expenditure and improving cash efficiencies. And also on the next page. We have 2 product hubs, Wuhan Intelligent Factory and Geely operated. This is Geely operated high-efficiency EV production with advanced stamping, assembly and zero carbon design and also another hub, the Hethel in U.K. It's a historic sports car facility with professional testing tracks and heritage manufacturing capabilities. So the overall, the partnership between Geely and Lotus is mutually beneficial. On one side, Geely provides scale and operational support. On the other hand, Lotus brings a unique luxury performance brand, advanced auto technology and global market access to the Geely Group. So remain independently governed while leveraging the ecosystem strength of the Geely Group. And the next slide, I want to speak about the ESG achievement of the Lotus. Thank you for the next slide. So sustainability is embedded in our strategy. Lotus has received global ESG recognition as listed in the pages. ESG is not just compliance for us, it improves our operational efficiency and strengthens our brand value and attract global customers and support long-term growth, stable growth of the Lotus. So ESG, we say it's one of the most part of our operation. And from next slide, I want to spend some time on the financial performance and the operational improvement of Lotus. So next page, please. So now let's analyze our 2025 financial performance. For the full year 2025, our total revenue reached USD 590 million, and total deliveries reached [6,520] units. Gross profit were about USD 45 million. Gross margin keeps at 9%. Operating loss reduced by 46% year-on-year. Net loss reduced by 48% year-on-year. And adjusted EBITDA loss was at USD 356 million, which is improved 60% year-on-year. So these results reflect 3 strategic initiatives. First, Geely partnership allows optimized procurement, lower production costs and supply chain stability. So you can see from the next page. And second, it's due to the streamlined operation with organizational efficiency and strict cost control, working capital optimization. And third, the Lotus -- One Lotus strategy. The synergies allows future integration, which will further reduce the duplication and boost efficiencies. So we have turned gross profit margin positive and significantly reduced losses, improved operational efficiencies and strengthened cost discipline. I'm not going to spend too much on the Q4 data, so you can take a look at it. But all in all, we are on a clear path to margin expansion and profitability. So above is -- the presentation I want you to have. And so I can make a quick conclusion and also a brief like the forward-looking. So in summary, like the Lotus Tech is strongly positioned for the future. We own an irreplaceable luxury performance brand with over 55 years heritage and we have a diversified product portfolio covering the ICE, the BEV and PHEV. We operate a balanced global distribution network with growing international recognition. We benefit from asset-light operations and strong Geely support. Our financials are improving sharply with expanding margins and reducing losses. One Lotus strategy will further unlock powerful long-term synergies. And going forward, we will focus on our priorities, scale up deliveries globally and continue to expand gross margins, optimize cost structure and cash flow and progress steadily towards profitability. So overall, that's my interpretation for the performance and also the presentation for today. So Lotus is not just transforming from a traditional sports car to a luxury EV leader. We are defining the future of the performance, luxury and sustainability. So we further appreciate your continued support and investment in the Lotus Tech. And thank you very much, and now I'm very pleased to take questions you may have. Thank you.

Okay. So I saw the question already. So Okay. I will take the first one. So looking out 3 years, assuming you execute the One Lotus combination, what is your target number of units you need to deliver each year to breakeven? So we do the -- of course, actually what I say is not going to be any guidance, but we do the calculation if we can breakeven with the following conditions, first [indiscernible] reach a gross margin kind of between 15% and 20%. And in that case, if we can get the sales volume of say unit by over 20,000. So in that case, we can breakeven with the EBITDA. So that's the rough calculation for this question. And also the next one. With For Me, the question is with For Me offering over 900 horsepower and more than 1,400 kilometers combined range, do you see this as a halo product that can pull the whole brand up in the pricing and mix? So that's a very good question. So I mean, my understanding is like this For Me has a very strong performance, and it's further enlarge in our customer base. But I don't think this is a halo product for our product portfolio. And actually, I think the -- we are -- of course, we focus a lot on this new energy products, but I think our sports car remains very competitive. And I would say like even for both sports car and also the new energy cars, I think we can have the new products in the pipeline for the halo for the future. So I think you can wait and see. Next question. Yes, Lotus just launched Eletre in Canada at a 6-figure price point. How strong has early interest been from Canadian dealers and customers? So yes. Okay. I got the mark. I think we see the pretty strong interest from Canada regarding our product because we already finished the homologation and approved [indiscernible] the North American standard. So we are going to be the first one for the luxury EV products from China in this market, I think. And so far, I think we got a very feedback -- good feedback from the -- especially from the dealers and also, of course, behind them is the customers. That's the reason why we are going to double our network in the Canadian markets to make the delivery. So I think we are going to start delivery once the policy is landed, hopefully, in months to come. So I would say the early interest from Canadian market is pretty strong on both the dealers' level and the customers' level. Last question is about the -- given your global expansion strategy, including China, EU, U.S., how are you going to manage tariff risks and localization of production? And what does that imply for the cash burn over the next 24 months? I think the -- we do have this -- the tariff geopolitics really have some profound impact on our performance and also the operation. But we can also see like from the -- this year, you can see the, for instance, the tariff between Canada and China, those products imported from China went to jump to 6% only. So I think that's a good sign for our products. So we do see some of the opportunities also. And also the U.S. and the U.K., the tariff stays at 10%. So I do see that a positive impact for our operation. Of course, like this tariff is always -- there are some uncertainties in the current situation. That's why it brings really some uncertainty for our operation. But I think I do see some opportunities also. So this -- of course, the expansion implies that we need like much injection for the cash flows. So that's the reason why on the one hand, we are going to further improve our performance regarding the operational cash flow. And we hope this operation can bring the positive cash inflows. And meanwhile, we are going to take advantage of the capital markets to raise funding so that like can meet our demand for the cash. And next question is about the -- with Geely's manufacturing support and your own light weight and I don't know how, do you see room for -- to add more modules on the same platform without large CapEx? Yes, we do because that's really why we -- actually for our products, we not only give out the products, the modules, but actually behind it -- it's about the architecture. We always spend technology money and also on this platform architecture. Sometimes we leverage the current existing mature architecture from Geely also. So that's the way we can save the future -- the large CapEx because that means that the modules can co-share the architecture. So...

All right. Thank you, Dr. Wang. We are -- time to wrap up.

Okay. I have one more question. So should I finish that one?

Yes, quickly.

Okay. So last question is about the question secured strategic investment from ECARX and continue to deepen your technology partnership. How important are these ecosystem deals for monetizing your software and intelligent cockpit capabilities? Yes. I think that's a very good question also because I mean, for the future, software and intelligent driving is, of course, the very important part for us to define what we call the luxuries, right, the new standard for the luxuries. So of course, we have in-house operations. And meanwhile, actually, we are also working with the ecosystem friends like ECARX, even the Geely system. So in that way, I think we can make this more efficient and less time consuming and less money spending. So that's the reason I think this is a very important part of our future strategies to work with the industry players, industry partners. Thank you. So that's basically the questions for today. Thank you so much.