Lotus Technology Inc.

as well as non-audited, non-GAAP financial measures. You can find the reconciliation of these figures in the press release available on our investor relations website at ir.groups.com. With that, I'd like to turn the call over to our CFO, Dr. Wang. Dr. Wang, please.

Good evening. Distinguished shareholders, analysts, and members of the press, Thank you very much for joining our Q1 2025 earnings release. This is Daxi Wang, the Chief Financial Officer of the Lotus. I'm honored to take this opportunity to brief you on the company's unaudited financial results. In Q1, the company delivered nearly 1,300 vehicles to the distributors, down 42% year-on-year, and user vehicle deliveries exceeded 2,000 units, up by more than 10% year-on-year. These numbers reflect the scheduled transition period before our gradient model started delivering Q2, in addition to the effect of the priority stalking activities in the Q4 last year. As you may know, we started revamping our Electro-Hyper-ICV and the EMEA Hyper-GT line map with upgraded configurations They kicked off customer delivery on these upgraded models in China during the second quarter and expect to begin deliveries in Europe in the upcoming third quarter. Although quarterly revenues narrowed to $93 million in the first quarter, the company achieved a notable gross margin recovery, improving from the negative Q4 last year to the current 12%, placing us firmly in positive territory as the impact from priority stocking affects the East. Now, I'll break down our sales by category and by regions. By category, lifestyle vehicles accounted for 56% of the total Q1 deliveries, consistent with the full year 2024 figures. By region, Europe, China, and North America each contributed approximately one-third of the company's total deliveries, while the rest of the world region accounted for the remaining 4%. Regarding our sales channels, the total number and composition of the sales stores by region remained stable during the first quarter. For the key financial indicators, deliveries, revenue, and gross margin, profit margin have just been reported. Cost of revenue decreased by 43% year-on-year to 82 million US dollars. Consequently, gross profit was 11 million US dollars. We reported an operating loss of $103 million for quarter one, a 56-year-on-year decrease. The net loss of the quarter was $183 million, representing a 29% reduction. For your information, the adjusted net loss under the non-GADS measures for the quarter was unchanged. And behind these financial numbers, we want to highlight our achievement of reducing operating expenses for six consecutive quarters, driven by continuous, rigorous implementation of efficient enhancement plans. And now I will stop here and hand over to Mr. Feng.

Thank you.

Hello, my name is Fengqing Feng, CEO of Lotus. Allow me to share with you the most recent business progress and the strategies of Lotus.

As a high-end brand, we are still focusing on the construction of this brand. So this year, especially for Lotus, which is focused on the sports series, we need to create the brand of the track.

As a premium brand, we highlight the importance of brand establishment, particularly on sports car, and this is something that we have been doing this year on racing track.

On May 30 this year, we officially launched a national-level GT single brand race, Lotus Car. This series of races will cover five divisions in China and Malaysia. Our first division was held in Chengdu. On May 30th, we launched a national level GT one make racing series Lotus Cup.

It features five rounds spanning China and Malaysia. We successfully completed the first race in the city of Chengdu. The racing series stands as China's premier FIA-recognized GT series, eligible for international sea license upgrade.

Among the users of Lotus, there are two most powerful labels. First, this car is very beautiful. Second, this car has very good performance.

Among our customer group of loaders, they may highlight to the vehicles aesthetic styling and the performance of the vehicle. And this is why that this year we've been spending most of our efforts on the performance side.

This is where we are different from others. This is where we are focused on. This is where we are focused on. This is where we are focused on. This is where we are focused on.

As a ultimate handling and writing iconic features of Lotus, we've been trying to stand out among other premium brands. And this is also one of the reasons that this year we are trying to leverage a race series to improve our brand awareness.

On May 26, we released a report on ESG in 2024. The focus was on the progress of the three core areas. Participation in global sustainable development,

And on May 26th, we have also released our 2024 years to report, highlighting our progress in advancing sustainable practices, developing innovative green products, and demonstrating global leadership in clean mobility.

Over the past 24 years, we have launched the 900-hp super-multi-electric road-hailing technology. We have received a lot of attention and attention. The technology has progressed very smoothly. It has started to be used on vehicles. Later, I will briefly introduce the development of this vehicle.

Back in 2024, we have launched a new technology called hyper-hybrid EV technology. This has gained a lot of interest. And what I can show you is that the progress of this technology is very good. And later, I will elaborate more on the details.

In terms of product planning, there hasn't been much change. The EMERA Model year 2.6 As for our product pipeline and the product planning, our EMERA model year 26 has already started its delivery. In August, the vehicle will commence its delivery in the US. In April, we've also started to deliver our Elettra and EMEA model year 26.

It has started in China market first, and then we are going to commence the delivery in the EU.

. . . . . . . .

In recent years, premium brands' BEVs penetration does not tally our expectation. However, the interest on PHEV is gaining its momentum. We believe that such a technology of the hybrid can supplement the disadvantages of BEV. For customers who like ICE, they can still enjoy the drivetrain. For customers who may be fond of BEV, they can feel free to worry about the range.

We will launch this vehicle at the end of this year. We will start delivering it in the first quarter of next year. I would like to talk about the core features of this vehicle.

Our new model is expected to step you at the end of this year, and the delivery of this vehicle is expected to happen in quarter one next year.

And allow me to share with you some of the highlights of this particular model.

performance will still remain our iconic feature for this model and this vehicle is going to be the world's first mass produced PHEV that is performance oriented

Particularly in the market with a low penetration rate of a BEV such as APAC and Middle East, we believe that such a hybrid technology could be widely accepted in those markets. . . . . . . . .

And this hyper-highway technology features a 300 kilometers of range when it is driven by the Peoria battery. And in high speed, for example, the combined driving range can reach over 1,000 kilometers.

Then we also promote this super fast charge. We call it double flash charging technology. Even when charging, it is very fast. When in action,

In addition to that, it also features a dual hypercharging technology, ultra-fast parking charging and ultra-fast on-the-drive charging.

On-the-drive charging rate is five times the power consumption of the typical driving scenarios. It can deliver a battery charge from 10% to 80% within 12 minutes, pretty much on par with a battery swap speed. We also need to ensure that when the power is lower than 5%, we still need to ensure the performance of the vehicle, rather than being in a shape. Therefore, the charging rate in the form is up to 5 times, and the power is 5 times the charging rate.

As we are very highlighted on the performance side of this vehicle, it can deliver the ultimate performance under any circumstances. Even though the battery may seem to be lower than 5%, the performance can still be secured. And this is why that I previously highlighted the features that on the drive charging rate is five times the power consumption of a typical driving scenario. Again, this world's first performance-oriented hyper SUV is going to debut at the end of this year, and the delivery will start next quarter one.

. . . . . . . . . Our initial target is to deliver a balanced delivery distribution across our markets.

30% in the U.S., 30% in the EU, 30% in China, 1% in the rest of the world. Between 2023 and 2025, the main challenges around the U.S. tariff hike which led us not to be able to export many vehicles to the U.S. market. Given that, the current regional share of deliveries since 2024 are as follows, 22% in North America, 38% in Europe, 14% for the rest of the world, and 26% for China. And this year we are expecting that China's contribution is going to be a bit higher compared with the previous year.

Of course, in the future, we will use the US strategy to make up for the loss caused by tariffs in the US. We are discussing localization in the US with our strategic partners. Through localization in the US, we can avoid the trade barriers of tariffs, and thus improve the US ratio.

In the future, we are trying to leverage our U.S. strategy to catch up the losses due to the tariff hike. At this moment, we are discussing with our strategic partners in the U.S. on localization plans in order to avoid the influence of the U.S.

tariff. With our strategic partners we had an in-depth discussion around U.S.

landscape and we believe a localization is a feasible plan. We will continue to explore U.S. markets with our PHEV and also BEV products.

Okay, thank you.

Thank you very much, Mr. Feng and Dr. Wang. Well, due to the time constraints, we will not be holding a Q&A session today. However, we have received a number of questions regarding the progress of our hyper-hybrid initiatives and our global market strategies. So to address these key topics, I'd like to invite Mr. Feng to share more of his insights.

Mr. Feng, please. PHEV, I want to talk about the market. The market for PHEV is growing rapidly. In fact, whether it's China or the United States, these two markets are growing very fast. In fact, the PHEV we make is different from the traditional PHEV. The traditional PHEV is based on generators. We are a PHEV that uses both oil and electricity. When we need performance, the engine can also be involved in driving. When we need energy saving, for example, at high speeds, we only use the engine to drive, not the electricity. We all know that at high speeds, the power consumption of electricity is huge. Using the engine to drive is the best way to save energy. So we are able to maintain our performance, and we are able to maintain our energy. So this will be able to meet the performance, meet the need to play, and meet the needs of daily life. This is our core starting point.

For our PHEV products, I'd like to start with our observation regarding the PHEV market. It is actually growing very fast in both China and the US. And for Lotus PHEV, it is actually quite different from the traditional PHEV structure, which is engine driven. We combined the advantages of ICE engine and also electric motor. It can deliver ultimate performance when it is needed for our customers. For example, on high-speed driving, if it is driven by the motor, it may not be that energy-saving. And for our technology, when you drive on the high speed, this vehicle can be driven by engine. And in total, the technology can deliver both performance and energy-saving features, and it can satisfy the scenarios of a lifestyle as well as a racetrack.

The product of PHEV, the product of super mixed electricity, has been very well verified in China. Everyone can accept it very well. At the same time, we have also done a thorough survey of Europe and the United States. For the American market and the European market, there is no such product at the moment. But if we take this product to the consumer The consumer is still very, very interested in products like this. People think that this is a product that can really satisfy performance and satisfy the daily needs of the household.

For the hyper-hybrid technology at this moment, it has been widely proven and accepted in China markets. And we have also done a thorough study for the US and the EU markets. At this moment, there hasn't been such a product existing in those markets. But if our customers are well aware of this product, we believe that they will be interested in this particular model because it can satisfy both the demands from performance vehicle as well as lifestyle vehicle.

In the future, our product technology will be more focused on the development of this PHEV, the supercharged PHEV. We are also studying whether such a product will be suitable for a sports car.

In the future, our technology is going to be pivoted around this hyper-hybrid technology. And at this moment, we are also investigating the feasibility of the sports car hyper-hybrid solution.

We believe that in the future, there will be a very wide market for pure engines. A very good market. Because in the field of sports cars, there are always to fans who are passionate about cars. We still use cars to satisfy them. We are also exploring. We think that a pure electric car is hard to win over consumers' admiration. But if we use this super-movement to make a car, it may win over consumers' admiration. We are also doing research on this. In other words, in the future,

For our sports car, we understand that there's a wide market for the ICE sports car, and we will definitely satisfy those needs. We are trying to investigate the visibility of a hyper-hybrid sports car to see if it is going to work. In the future, we will prioritize the hyper-hybrid technology for both lifestyle vehicles and the sports car.

Actually, everyone knows that in the sports car era, . . . . .

Back here, if you look at the history of Lotus, I think many of you may be aware that Lotus have been relying on external parties or suppliers on its engines, such as Toyota and AMG. However, when it comes to PHEV, when Lotus possesses such a technology, we believe we can supplement to the drawback of the lack of ICE engine.

Thank you.

Thank you very much, Mr. Sun, for your sharing of the insights. And again, thank you all for joining us today. We'll conclude the call soon. If you have any questions, please feel free to contact our IR team. This concludes the call. Have a good day, everybody. Thank you.