Dialogue with Lotus’s Feng Qingfeng: Luxury pure EV cools down, Lotus bets profit key on hybrids

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Author | Zhou Zhiyu

Lotus is betting the key to global growth and profitability on hybrids.

In 2018, Lotus defined the Emira as the last fuel car. Eight years later, it no longer treats pure electric as the only solution for global markets. In the Focus 2030 strategy released in May 2026, Lotus set its future product structure as about 60% hybrid, 40% pure electric.

This round of adjustment already has freshly released industry reference. Just over two weeks ago, Porsche clarified in its "2035 strategy" that fuel, hybrid, and pure electric will still coexist, hybrids are not transitional technology, and the 911 will not launch a pure electric version. Ultra-luxury brands no longer treat pure electric as the "only answer".

For Lotus, the hybrid takes on two tasks: to re-include users outside China into product coverage, and to ensure that new sales are enough to support the investment in the next generation of products. The operating target given by Lotus CEO Feng Qingfeng is to reach annual sales of 30,000 units and achieve profitability around 2030.

Feng told Wallstreet.cn on July 8 that China's energy replenishment conditions cannot decide for the global market. In Europe, the Middle East, Southeast Asia, and the US, intercity travel, continuous runs on tracks, and uneven charging infrastructure still bring energy replenishment, vehicle weight, and sustained performance into purchase decisions. Lotus's model planning for the second half of the year is all aimed at filling this gap in the market.

What Focus 2030 really wants to answer is whether Lotus can turn the product strength already proven in China into global sales with hybrids, and balance the books at the 30,000-unit scale.

Reasons for Buying Have Changed

The luxury car market is rewriting its transaction logic.

In the past, high-end users buying a traditional luxury car were largely buying into a brand consensus already formed: brand history, residual value expectations, channel density, and social recognition, all worked to persuade users before they even entered the shop. Now, brand trust is still useful, but it can no longer automatically cover new purchase differences. For cars above 500,000 yuan, users compare powertrain route, intelligence, replenishment convenience, driving involvement, uniqueness, and residual value together.

Porsche, in its "2035 strategy", no longer puts maximizing sales upfront, but stresses value, desirability, and profit, continuing to invest in fuel, hybrid, and pure electric power. This shows high-end markets have not stopped paying for performance and uniqueness, but the default answers are decreasing.

Feng, answering Wallstreet.cn's question about luxury car market changes, said that the auto market above 500,000 yuan has recently declined about 20%, and traditional luxury brands rarely have a single product selling over 10,000 units per month anymore.

The issue is not just weakening demand, but that reasons for purchase in this price band have become more fragmented: some users want traditional brand stability, some want intelligence and replenishment efficiency, others want driving experience and self-expression. Whoever can articulate their segmented value clearly has the chance to get new orders.

For Me, since its launch in March 2026 up to the end of June, has collected over 2,200 large orders. It has raised Lotus's share of the SUV market above 500,000 yuan from 0.7% to 2%, with sales and registrations in Guangdong exceeding Porsche Cayenne.

This number indicates that as traditional luxury brands' default persuasion declines, high-end markets leave room for differentiated products. Lotus isn't targeting the mainstream luxury market, but a group dissatisfied with common brand labels yet willing to pay for driving experience and uniqueness.

But this path is not easy. In China, a purchase decision above 500,000 yuan is not only about comparing performance parameters; users must first trust the brand's long-term existence before paying a premium for a new car.

The nearly 10% test drive to order conversion rate for For Me shows test drives aren't the end of the sales process, but the core of transactions. Lotus's driving control strength can't be priced in before entering the shop like traditional luxury badges—it must be constantly proven through extended test drives. This is both a signal that product strength is turning into premium and a cost constraint for expansion: once stores and experiential capability lag, insufficient brand awareness quickly slows conversions.

Lotus has already built price power among a group of core customers. For Me's old-owner repurchase rate is 20%, high-spec selection exceeds 70%; among new users, corporate executives and financial professionals have obviously increased, with about 30% of small-order users being executives from the financial industry.

The next challenge is not proving someone likes Lotus, but whether this high-premium transaction can be replicated in more cities, and not just made into a regular luxury car business through discounts.

The Greater Bay Area running this path first is unsurprising. Local modification, racing, and car culture is more mature; users have lower costs in understanding chassis, handling, and performance. For Me's performance in places like Changzhou also exceeds Cayenne, indicating such demand isn't limited to tier-one cities, but needs strong car culture, experience channels, and word of mouth to be activated.

This also partly explains why Lotus hasn't exchanged scale through drastic price cuts, but is trying to stabilize prices and add high-spec and limited versions. The competition focus in the high-end market is shifting toward "who can provide experiences harder to be replaced". Price still matters, but if a car only persuades through price, its brand premium hardly translates into profit.

Pure Electric is Not the "Only Solution"

When Lotus announced full electrification in 2018, its judgment on the pure electric route was resolute. Emira was positioned as the last fuel car, the brand then rolled out Eletre, Emeya, and Evija, attempting to quickly transition from a traditional sports car brand to a high-performance EV brand.

This route is easiest to establish in China. The mature charging network and rapidly iterating battery and EV supply chain let high-performance EVs satisfy daily commuting and create new performance labels with instant power. China provides an extremely friendly sample market for luxury EVs: short replenishment radius, dense infrastructure, high acceptance for intelligence and EV performance.

The problem is China's market conditions cannot be directly copied globally. Feng mentioned that charging facilities are still uneven in the Middle East, Southeast Asia, parts of Italy and the US; for intercity travel and circuit use, users still care about replenishment speed, vehicle weight, and whether peak performance can be repeated under high loads.

Luxury brands reintroducing hybrids is not because electrification goals disappear, but that product planning shifts from one route to a combination of powertrains. Porsche retains fuel, hybrid, and pure electric in its "2035 strategy", clarifying hybrids are not temporary transitional technology; Ferrari’s latest plan adjusts its 2030 product mix to 40% fuel, 40% hybrid, 20% pure electric. For global luxury brands, powertrain structure must first obey user scenarios, not simply a technical route’s timeline.

This is where luxury and mainstream markets diverge. Mainstream powertrain choices balance cost, fuel consumption, and policy; luxury market choices decide whether a car can sustain its price justification. Pure electric offers faster acceleration and quieter experience, but in sports and ultra-luxury markets, sound, weight, repeated lap times, mechanical feedback, and scarcity are also priced by users. The more advanced the technology, it doesn't automatically mean a more stable premium.

Sports cars make this contradiction more pronounced. Pure electric can push 0-100 acceleration very high, but the top sports car's value also includes whole-car weight, cornering dynamics, repeated lap times, power feedback, and mechanical engagement. The bigger the battery, the easier to solve range and instant power, but harder to balance weight and sustained track performance.

The two hybrid product types in Lotus's plan address different issues. The Eletre X, with the Luyao super hybrid architecture, will sell in Europe; it’s named For Me in China. The 900V architecture and long range mainly solve the problem of high-performance SUVs on long trips, letting users avoid choosing between power and cross-region travel. What it needs to verify is, whether high-end EV products proven in China can expand applicability in Europe and elsewhere via hybridisation.

Type 135 concerns Lotus's core sports car identity. Originally developed as a pure electric next-gen sports car, it has now switched to super hybrid, planned for launch in 2028, with V6 and V8 options. Lotus aims for under two seconds acceleration and an ultimate version with weight around 1.5 tons and power near 1,000 hp. Feng expects the US may contribute 40%-60% of Type 135's global sales. If insisting on pure electric, the car would face local replenishment conditions, user preference for big-displacement sports cars, and battery weight limiting track performance all at once.

Type 135 packs British sports car tradition, Chinese EV supply chain, and US high-end demand into one car. Battery, EV drive, and power systems can be developed in China; design and chassis are still led by the UK team; V6 and V8 are co-developed with Horse—the powertrain company jointly owned by Geely, Renault, and Saudi Aramco. For a car to go global, there must be a cross-regional R&D and sales system behind it.

This example’s industry significance: China’s EV ability is entering the global luxury car system, but it can’t be exported unchanged. Only through hybrids, lightweighting, chassis tuning, and reassessment of local user preferences can it become a premium product for European/American users. For Lotus, hybrids are not a return to the fuel era but a translation of China’s EV, battery, and architecture strengths into globally intelligible sports car language.

Multiple powertrain routes bring new risks. Running pure electric, hybrid, and fuel simultaneously hikes platform, certification, supply chain, and aftersales complexity. The smaller the scale, the harder it is to spread fixed costs with each extra solution. Lotus’s shift from pure electric to mixed power enlarged its potential market, but also brings profit challenges upfront during product planning.

“Luxury EV cooling down” doesn’t mean electrification investment is cooling, but that expectations for pure electric covering all regions, price bands, and performance scenarios are cooling.

The Hard Account of 30,000 Units

30,000 units is Lotus's minimum for balancing the books.

Feng says the company’s biggest pressure is “not profitable yet and must keep investing in new products, branding, and technology”. Achieving annual sales of 30,000 units and profitability by 2030 is Focus 2030’s toughest operating goal.

The real difficulty is the profit model. In the past, luxury brands had two main paths: like Porsche, expanding the sports car halo to SUVs and sedans, using bigger scale to spread R&D and channel costs; or like Ferrari, maintaining ultrahigh profit margin with scarcity, personalization, and product mix.

Electrification and intelligence have made both paths more expensive. Platform, electronic/electrical architecture, software, replenishment experience, and global certification all need continuous investment. If a small-scale brand only guards scarcity, balancing the books is hard; blindly chasing scale quickly dilutes the brand.

Lotus Tech’s 2025 financial report shows full-year deliveries of 6,520 units, revenue of $519 million. With cost cuts and product mix adjustment, gross margin rose from 3% to 9%.

30,000 units is roughly 4.6 times 2025’s deliveries, but even at this scale, profitability depends on three conditions: unit revenue must not be eroded by price wars, high-spec and personalized revenue must keep increasing, and new model R&D costs need to be effectively spread by group capability.

On the revenue end, price must be guarded. For Me’s high-spec selection rate exceeds 70%, old-owner repurchase rate hits 20%, and the Black Gold limited quickly sold out, indicating Lotus can extract config and personalization premium from its core users. For a brand planning only for 30,000 units a year, option rate and unit revenue are more critical than chasing order volume.

China also provides another warning. It sells millions of cars a year, but industry profits are dragged down by constant price war. Feng notes that disorderly competition ultimately hurts everyone. For brands like Lotus, the destruction of price war is not just earning less per car—it also damages residual value, dealer profits, and user expectations for brand uniqueness. Once orders are taken by price cuts, even if 30,000 units are hit, it may not be a profitable scale but a bigger cost burden.

On the channel side: avoid premium leaking in the sales system. Lotus plans to increase China’s stores from about 50 in 2025 to 80, while insisting over 70% of dealers must be profitable, and sticking to “one city, one dealer” to cut inter-store price competition. Home service and mobile service vehicles also aim to lower user maintenance costs when stores aren’t dense yet. Store count expansion is just widening coverage; sustainable dealer profits and terminal price stability determine whether channels can bear long-term brand services.

Cost is harder. Feng estimates a new generation of electronic/electrical architecture may require tens or even hundreds of billions in investment; it's commercially infeasible to spread this solely over Lotus sales. Lotus needs to share Geely’s battery, EV drive, E/E architecture, smart cockpit, AI, and global supply chain, putting base technical fixed costs into group scale; its own R&D focuses on aerodynamics, lightweighting, chassis tuning, and sports car performance for premium value creation.

Type 135’s powertrain partnership is the same logic. V6 and V8 are co-developed by Horse, avoiding Lotus building a full powertrain for just 30,000 units on its own.

What Lotus truly needs to master independently are the technologies that define whether a car is still a Lotus. Share too little, costs don't work; share too much, brand distinction can be diluted. This boundary decides if Geely’s synergy is a profit lever or a source of brand dilution.

This is the paradox all small luxury brands encounter. In the EV era, base technology is increasingly like group capability, and individual brands find it ever harder to sustain a full platform alone; yet luxury brand pricing power precisely comes from the non-fully shared part. Lotus must prove not just "lower costs thanks to Geely", but that it can put group general capabilities where users don't directly perceive them, and leave visible, tangible, payable differences in the product experience.

Multiple powertrain routes make solving this even harder. It broadens coverage in Europe, the Middle East, and the US, but also raises complexity in certification, parts, and aftersales systems. Lotus’s response is to control model count, concentrating global resources in a few products that represent the brand and have high unit profit. Feng says it’s better to focus on making a global high-quality product than scatter resources across dozens.

For Me and Type 135 serve two roles in the profit model. The former needs to expand cash revenue and channel scale, proving high-performance SUVs can keep delivering high-spec and repurchases; the latter needs to raise the brand ceiling, letting Lotus's core sports car value regain global pricing power.

By 2030, the market first looks for profit. Scale from For Me and other models, premium from Type 135, and Geely’s cost-sharing must all be established together on the same profit statement.

After luxury EV cooling, the industry isn’t simply returning to the fuel era, but is searching for a model that explains technology, brand, and profit simultaneously. Lotus’s hybrid bet looks like a powertrain adjustment; in reality, it answers the new question for small luxury brands: not chasing mass-market scale, nor only guarding niche sentiment, how to turn scarcity into a profitable business.

Risk Disclosure and DisclaimerThe market involves risk, investment requires caution. This article does not constitute personal investment advice, nor does it consider individual users’ specific investment goals, financial situation, or needs. Users should consider whether any opinions, viewpoints, or conclusions in this article are suitable for their particular circumstances. Any investment based on this is at your own risk. ```