The challenging road ahead for Lotus

A Lotus Evija - Jorge Ferrari 

A Lotus Evija – Jorge Ferrari

As the world’s richest man and one of the most famous people on the planet, Elon Musk can draw a crowd just by walking down the street.

But back in the mid-Noughties, the tycoon and his team from Tesla raised fewer eyebrows during visits to the headquarters of Norfolk-based sports car company Lotus in rural Hethel.

Tesla had recognised that Lotus produced the best-handling sports car on the road, according to the electric car company’s co-founder Martin Eberhard. It wanted to tap that expertise.

When Tesla unveiled its first car in 2006, the Roadster, it had an obvious similarity to the Lotus Elise – hardly surprising given the basic Roadsters were built at Lotus’s Potash Lane factory, before being shipped off so Tesla could install an electric drivetrain.

The link between Tesla – now the world’s most valuable car company, worth $800bn (£580bn) – and perennially loss-making Lotus may have been a key factor in the appointment of Matt Windle to the top job at Norfolk business last month.

Back when Tesla was learning about automotive design from Lotus, Windle was one of the team offering up more than 50 years of Lotus expertise.

A Lotus Elise

A Lotus Elise

Windle was poached by Tesla in 2005 as principal engineer and stayed for seven years before moving on to Volvo, Zenos, Caterham and Daewoo. He then returned to Lotus in 2017.

Having just taken the top job from ex-Jaguar Land Rover executive Phil Popham, the former engineering director’s challenge is to sprinkle Lotus with some of Tesla’s star quality.

Like all car companies, perhaps the biggest issue is electrification. Lotus is famed for the superb handling of its cars, partly down to an ethos summed up by founder Colin Chapman as “simplify, then add lightness”.

“Adding power makes you faster on the straights, subtracting weight makes you faster everywhere,” Chapman once said.

The heavy batteries needed by electric cars might seem to go against everything Chapman stood for, but Autocar editor Steve Cropley says that in fact they are part of the same tradition.

“Lotus is at an absolute advantage,” says Cropley, a keen supporter of the brand who has owned nine of its models. “The less weight in a car the power train has to propel, the better off you are. That means you need fewer batteries, smaller motors, smaller brakes.”

Electrification means every car company is being forced to rethink what they do, no matter how big or small – and in Lotus’s case, that’s pretty small. The firm sold just 1,519 cars in the year covered by its latest accounts, running up a £14m loss on revenues of £96m. It is a minnow compared to the likes of Toyota and Volkswagen group, which each sell 10m vehicles a year and generate revenues in the hundreds of billions.

However, Lotus does now have some heavyweight backing. Three years ago, Chinese industrial conglomerate Geely took a majority stake. Owner of marques including Volvo, black-cab maker LEVC and Link & Co, and with a 10pc holding in Daimler, Geely has promised more than £1bn of investment.

Popham previously described how Lotus can now tap 20,000 engineers at Geely’s technical centre. Drawing on this vast parts bin means it doesn’t have to re-invent the wheel, freeing engineers up to concentrate on the characteristics for which the company is famed.

Phil Popham and Matt Windle

Phil Popham and Matt Windle

“Lotus has always had a history of utilising other’s parts, bring the best ingredients together and making them better,” says a source, pointing to the company’s use of Toyota engines as one example.

“Geely’s backing opens doors. In the past, suppliers might have looked at Lotus’s track record of paying and been less than keen to do business.”

Lotus’s relatively low volumes and history of teetering on the edge of bankruptcy until Geely’s arrival meant such cherry-picking wasn’t always possible.

The Chinese backer can also help with the eye-watering costs of developing electric power trains. Geely’s marques already have a series of these systems and the supply chains to feed them.

Geely’s backing has already allowed Lotus to embrace a greener future. Two years ago it unveiled its all-electric Evija supercar, a £2m-a-pop statement with more than 2,000 horsepower capable of 200mph. Lotus has also teamed up with Renault’s Alpine performance arm to jointly develop an electric platform they can both use for future models.

Matt Windle

Matt Windle

Windle’s job now is ensure the company’s electric dreams become a reality. All current cars will cease production under its Vision80 plan, with the Elise, Exige and Evora to be replaced by new models. The first, codenamed Type 131, arrives in 2022 and is likely to be the firm’s last vehicle with a combustion engine.

Type 131 needs to be a success. Automotive pundits think it could be priced at about £85,000, almost double the Elise, which could put off buyers who look to the marque for high-end performance at a far lower price than rivals.

The changes concern Colin Smith, chairman of the Lotus Drivers Club.

“Most of the current Lotus models are beyond the pocket of sports car enthusiasts, especially the younger ones,” he says, warning anything but a base model enters the price range of much better-specced Porsches and Alpines.

Playing in the expensive, high-quality end of the market could alienate hardcore performance fans too, who are willing to put up with a lack of creature comforts for blistering speed and handling.

Windle is likely to shrug off those concerns and focus on increasing output. In a move that would surely have raised the blood pressure of founder Chapman, the company is developing a SUV as it seeks to join the fastest growing part of the automotive market.

Lotus clearly has high hopes of delivering the volumes needed to return to profit, and is staffing up ready for it. It is taking on a further 250 workers on in addition to 1,500 already employed, and manufacturing facilities are being expanded too.

Hethel has a theoretical capacity of almost 10,000 cars a year and has been close to that number before, when it was contract manufacturing Vauxhall’s VX220 sports car in the early Noughties.

Whether the SUV is built at Hethel or even Geely’s volumes plants in Asia remains to be seen.

Volume could also mean sorting out quality – a Lotus weakness.

Ultimately, Smith says he and other owners will put up with a lot for a car that has the raw driving heft of a pure-breed Lotus. But if they are being asked to pay more, many will expect quality to improve in return.

He hopes that Lotus will target both ends of the market, with an “entry-level super-lightweight car”, as well as more expensive options.

Cropley just hopes the company keeps going. “Popham arrived with Lotus as a brand and left it as a business,” he says. “Windle’s now got that almost limitless Geely dosh to turn it into something better.”

Perhaps Musk’s transformation of Tesla will offer a useful blueprint.

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