Jonathan Reynolds intervenes to halt closure of Lotus car factory
The Chinese owners of Lotus have slammed the breaks on plans to close its British factory following an intervention by the government.
Jonathan Reynolds will hold emergency talks on Sunday with owner Geely to stave off the shutting Lotus's works in Hethel, Norfolk, according to sources familiar with the situation.
Department officials are understood to have contacted bosses at Lotus after it emerged on Friday that the British sports car maker was preparing to close its factory.
But Whitehall sources stressed that the future of the factory was a commercial decision for the company.
Lotus initially declined to comment on reports of the prospective closure, before insisting on Saturday morning that it had 'no plans to close the factory'.
'We are actively exploring strategic options to enhance efficiency and ensure global competitiveness in the evolving market,' a spokesman said.
'The UK is the heart of the Lotus brand — home to our sports car manufacturing, global design centre, motorsport operations, and Lotus Engineering. It is also our largest commercial market in Europe.
'We have invested significantly in R&D and operations in the UK, over the past six years. Lotus remains committed to the UK, and its customers, employees, dealers, suppliers, as well as its proud British heritage.'
The comments will provide at least temporary relief for the 1,300 people that work for Lotus in Norfolk.
Late on Friday it appeared that Lotus was set to fall victim to Donald Trump's trade tariffs with plans to end British production and move it to the US.
Reports suggested that production at Hethel as early as next year.
Executives said that Trump's import taxes have 'led us not to be able to export many vehicles to the US market'.
Sources cautioned that no final decision had been taken about the Hethel works, which employs 1,300 people.
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The closure would have marked a major blow to the UK's carmaking sector, which the government has made a priority during trade negotiations with the White House. The US-UK trade deal announced on May 8 reduced import tariffs from 27.5 per cent to 10 per cent.
Qingfeng Feng, Lotus's chief executive, told investors on Wednesday: '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 localisation plans with our strategic partners in the US in order to avoid the influence of US tariffs.
'With our strategic partners, we had an in-depth discussion around the US landscape, and we believe that localisation is a feasible plan.'
Lotus was founded in 1948 and began production at Hethel in 1966. Founded by engineer Colin Chapman, it has had a number of owners over the years as it battled against financial instability. It was first bought by America's General Motors in 1986, then sold to the Malaysian car manufacturer Proton in 1996, before Geely acquired a majority stake in 2017.
Geely invested £3 billion in the Hethel factory and technology, but switched much of its focus towards a new plant in Wuhan.
Lotus was listed in the US last year as Geely's billionaire founder, Li Shufu, sought to offload assets. Geely also owns Volvo and Polestar, the Swedish producer of electric vehicles.
The US float has been difficult, however, with Lotus shares shedding more than 80 per cent of their value.
The carmaker announced 270 job cuts in the UK in April, and on Wednesday, it revealed that sales volumes in the first three months of 2025 had fallen 42 per cent to 1,274. The company racked up a net loss of $183 million (£134 million) between January and March.
Qingfeng insisted that Lotus had made a 'steady recovery in our margin profile', adding: 'We remain closely attuned to evolving dynamics in key markets such as the US, and are actively evaluating strategic pathways.'
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