Lotus's UK factory threatened with closure by Chinese owner
The Chinese owner of Lotus is threatening to close the sports car maker's historic British factory after nearly 60 years of production.
Geely, which has owned a controlling stake in the marque since 2017, is understood to be considering shutting the plant in Hethel, Norfolk, as it simultaneously eyes a new site in the US.
It would mean the loss of 1,300 local jobs and deal a fresh blow to British carmaking following similar closures by Vauxhall owner Stellantis, Ford and Honda in recent years.
The threat has echoes of the attempt by China-based Jingye Group to close the blast furnaces at British Steel's plant in Scunthorpe earlier this year, a move that prompted the Government to swoop in and take control of the business.
On Friday evening, a spokesman for Lotus declined to comment on 'rumours and speculation'.
The company is understood not to have made a final decision.
However, the closure plans are under active discussion and production could end permanently as soon as next year, according to the Financial Times, which first reported the story.
Production at Hethel has already been on hold since mid-May following Donald Trump's decision to impose tariffs on foreign cars shipped to the US.
Lotus said the decision had been taken to manage inventory and supply chain issues caused by the 27.5pc tariffs on British vehicles.
A spokesman insisted this was temporary, adding: 'Production will restart in the next four weeks.'
However, it is understood that the longer-term future of the plant remains uncertain.
That is despite Geely having previously pumped £500m into a modern revamp of Hethel's production lines, aimed at boosting their capacity from 1,500 cars a year to more than 5,000.
Other carmakers including Jaguar Land Rover and Aston Martin also paused shipments to the US temporarily amid fears that buyers, particularly those interested in luxury vehicles, would hold off from making purchases until the trade dispute was resolved.
Most will have resumed from next week when a new UK-US trade deal comes into force, reducing tariffs on British cars to 10pc.
Since its takeover by Geely, Lotus has pivoted towards making luxury 'lifestyle' cars including its Eletre electric SUV and the Emeya, an electric grand tourer. Both of these cars are made by Geely in Wuhan, China.
At Hethel, the company makes the Emira sports car – the last traditional petrol vehicle the company will ever make – and small numbers of the Evija electric hypercar.
More recently bosses have talked about launching a new plug-in hybrid model towards the end of this year after sales of its EVs did not 'tally with expectation'.
The company has been based at Hethel for 59 years, in converted hangars that previously housed US air force bomber squadrons during the Second World War.
Mike Johnstone, the former chief commercial officer who left in April last year after 18 months in the job, previously told The Telegraph that the company's ' heart and soul is in the UK '.
However, Lotus listed on the New York stock market last year and Feng Qingfeng, the current chief executive, this week raised the prospect of opening up a factory in America to avoid Trump's tariffs.
Speaking to analysts and investors on a call, Mr Qingfeng said: 'In the future, we are trying to leverage our US strategy to catch up the losses due to the tariff hike.
'At this moment, we are discussing with our strategic partners in the US on localisation plans in order to avoid the influence of the US tariff.
'We believe that localisation is a feasible plan. We will continue to explore the US market with our [plug-in] and also [electric] products.'
Revelations about the Hethel factory's potential closure emerged on Friday as figures separately showed that British car manufacturing had fallen to its lowest level since 1949.
New car and van production dropped by 33pc in May to 49,810 vehicles, the Society of Motor Manufacturers and Traders said, as Trump's tariffs blitz prompted brands to freeze their lines and pause shipments.
Excluding the coronavirus pandemic in 2020, when factories were forced to close entirely, this was the lowest level of output in 76 years.
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