Lotus has reassured the UK business secretary at an urgent meeting on Sunday that it has no intention of shutting its Norfolk factory, as the British sports car maker prepares to resume production as US tariffs are reduced.
Jonathan Reynolds contacted Lotus bosses after it emerged that the carmaker was considering ending production of its sports cars in the UK and moving it to the US – a move that would jeopardise 1,300 jobs. Lotus’s Chinese owner, Geely, was thought to be looking at options including manufacturing its Emira sports car in the US, and permanently stopping production at its factory in Hethel, Norfolk.
A Department for Business and Trade spokesperson said Reynolds met with Lotus and Geely on Sunday to clarify the company’s situation, and “was reassured by management that they are committed to their UK operations and have no plans to close their Hethel plant”.
The spokesperson added: “He also set out government’s commitment to working with Lotus and the wider car sector to improve competitiveness and drive growth, including by slashing manufacturers’ energy costs and providing £2.5bn capital and research & development funding, announced in the UK’s modern industrial strategy.”
A decision to relocate manufacturing abroad by a prestige brand like Lotus would be embarrassing for the UK government. Labour’s industrial strategy, published last week, singled out automotive production as among the strategic sectors it wants to support.
Lotus paused production at the Hethel factory in mid-May to manage inventories and supply chain issues caused by the US’s extra 25% tariffs on car imports.
Other UK carmakers such as Jaguar Land Rover (JLR) and Bentley halted exports to the US but JLR has since resumed them, while waiting for a UK-US trade deal reached on 8 May to be implemented. On Monday, US tariffs are due to be reduced to 10%.
In a statement on Saturday, Lotus insisted “the UK is the heart of the Lotus brand”, and its largest commercial market in Europe.
It said: “Lotus Cars is continuing normal operations, and there are no plans to close the factory. We are actively exploring strategic options to enhance efficiency and ensure global competitiveness in the evolving market.”
Lotus has the capacity to manufacture up to 5,000 Emira sports cars a year, which have a starting price of £75,000, at the Norfolk factory, its only site in the UK. About 60% of them are shipped to the US. It also makes an electric hypercar at the site in smaller numbers, which is priced at £2.3m plus. Lotus has a factory in China that manufactures electric vehicles.
Ben Goldsborough, the Labour MP for south Norfolk, said on Facebook he was “deeply concerned” by the rumours surrounding a potential closure of Lotus’s Hethel facility.
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He said he had held telephone conversations with the management team and government ministers to “emphasise just how vital this site is – not only to the heritage of British automotive engineering, but to the local economy and skilled workforce that call Hethel home”. “These early-stage conversations have confirmed the seriousness of the situation,” he said, vowing to champion every feasible avenue including financial support, incentives and strategic partnerships.
Qingfeng Feng, the chief executive of Lotus Technology, told investors this week that the company was looking at shifting production to the US.
“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,” he said, according to a transcript of the call hosted by the data company Alphasense. “With our strategic partners, we had an in-depth discussion around our US landscape and we believe localisation is a feasible plan.”