How Lotus Tech plans to stand out in the EV space

Luxury EV maker Lotus Technology (LOT) is making its debut on the Nasdaq via a SPAC. Lotus Technology CFO Alexious Lee tells Yahoo Finance the move will help the company execute it's strategy and help it grow.

Lee explains that the company currently has four models available in Asia: two sports cars, a sedan, and an SUV. The Lotus Eletre SUV, he says, will begin to be delivered in the US in the third quarter of 2024. Lee says that "different markets have different strategies and different product offerings" and that the company plans to expand to even more markets.

Watch the video above to hear what Lee has to say about the SPAC and its efforts to reach the luxury consumer.

For more expert insight and the latest market action, click here to watch this full episode of Yahoo Finance Live.

Editor's note: This article was written by Stephanie Mikulich.

Video transcript

BRAD SMITH: Luxury-EV maker Lotus Technology is debuting on the Nasdaq via a SPAC merger this morning. Amid dampening EV sales growth, Lotus Technology is gearing up to compete against US-based companies like Tesla, General Motors, and Ford.

Let's bring in Alexious Lee, who is the Lotus Tech CFO, as well as our very own Pras Subramanian to discuss more. Alex, great to have you here with us today. So, first and foremost, why this timing, and what do you hope to achieve through this de-SPAC?

ALEXIOUS LEE: Thanks for having me today. I think today is a great day for us at Lotus. We want to use this opportunity to give special thanks to our shareholders, partners, and our own employees, and also our customers.

Now, today is a great day for us as it marked a milestone. We are here in the market right now. We have been here, 80-years-old brand with a global footprint. And right now, four models are offering in the market. We are an early mover. And right now, being listed in Nasdaq through this transaction allows us to-- what do you call it-- execute our strategy, develop our growth potential, and deliver our commitment to the market.

PRAS SUBRAMANIAN: Hey, Alexious, this is Pras here. So you mentioned that global footprint. Is that something that's going to help Lotus Technology because of the fact that, in the US, there's some dwindling EV demand here, but in places like China and Europe, it might be better?

ALEXIOUS LEE: Well, right now, we have four models, two sports-car models, one SUV, and one sedan. So having that product portfolio matters a lot. These four models are currently available in Asia-Pacific, and part of it is also available in UK and EU.

We are offering-- we are having the new SUV model coming into the US the third quarter of this year. So different markets have different strategy and different product offerings and different conditions. But what is most important here is that we are definitely going to more markets at the same time through more models and through more stores.

PRAS SUBRAMANIAN: So Alexious, the Eletre EV, the SUV that you mentioned, I believe just started sales in the US here. How are things going? Are you able to share any numbers on how those sales are?

ALEXIOUS LEE: Oh, we began taking reservation orders. We will begin delivering into the market third quarter this year. We are-- this is an exciting product. We think that this is a product that will go through 50 distribution networks. Right now, I don't have the numbers to show offhand, but we think that this is going to be a key maker given that we are in a segment of $80,000 to $150,000 US price unit, and in this segment, we don't have a real competition in terms of performance cars at the same time with electrification options.

SEANA SMITH: So talk to us a little bit more about in terms of this SPAC. Obviously it's going to help with capital. How is that going to eventually-- I guess your plans to deploy capital in terms of production and really execute on your strategy and your vision in terms of competing with the market, especially given the fact that there is strong demand playing out in China?

ALEXIOUS LEE: Well, we have raised $880 million US from this transaction. So this is a very good foundation that we have. This is a new chapter for Lotus.

What is important here is that we have L Catterton as a great partner, and they have great resources in both consumer insights and, at the same time, LVMH. This is a huge opportunity for us to develop a potential partnership in terms of cobranding, comarketing, and others in a way to help Lotus execute a strategy and to develop our full potential in the fast-growing, underserved luxury segment market. Now, what is more important here is Anish Melwani, who is the CEO for LVMH North America, will be on the board of Lotus Tech.

PRAS SUBRAMANIAN: Interesting names there in the luxury space, LVMH and those executives. But also Geely is a Lotus owner. Do you anticipate leaning on them for technology in the future, potentially, for maybe the introduction of hybrids in the US that are so popular now?

ALEXIOUS LEE: Well, Geely has been a shareholder and, at the same time, an enabler that is empowering us in a way of manufacturing, R&D, and supply chain. We have worked very closely on many of these industrial footprints, and definitely our strategy from when we have decided-- our strategy has always been on electrification and going through with six models in the next-- in 10 years into the whole worldwide market. So we will be sticking to our electrification strategy and definitely having Geely as one of the enablers to help us with achieving our targets.

BRAD SMITH: It seems like there's been a massive price war that's ensued. You were at the luxury end of this EV market. Have you had to adjust, even though you're going after a buyer that perhaps isn't as concerned about paying up-- you know, up to $100,000 plus for one of the, I might add, very nice-looking electric vehicles that you produce? Have you had to moderate that at all, and how does that impact some of the margins that you're tracking?

ALEXIOUS LEE: Well, you made a very good point. We are actually in the luxury segment. We are-- our price positioning is $80,000 to 150,000 US. Now in this particular segment, customers are not as price sensitive. And if I look at Oliver Wyman's research, you will see that in this particular segment is the biggest volume contributor in the whole luxury space. At the same time, it's very underserved, and we are the early mover as Lotus has made that full commitment to full electrification since 2018. Now, that puts us ahead in terms of peers, and we definitely is likely to outperform the broader market.

Now based on this market research, this particular segment is going to grow about 35% CAGR for the next 10 years. So we think that we are in a great position. And given that we are listed in Nasdaq today, this is a new chapter for Lotus, for us to be able to execute our strategy.

SEANA SMITH: Alex, I'm curious just real quick before we let you go. Just how do you think about pricing right now? If you were to need to lower prices in order to make your cars a bit more appealing to consumers, is that something that you would, though, potentially consider, given the environment?

ALEXIOUS LEE: We haven't seen a real pressure in terms of competition in this luxury EV space. We think right now we are in a space where we are still in a process of opening up more new markets, going with new models, and at the same time, opening up more stores so that we are able to deliver what we call a good customer experience to potential car buyers. So we are still at the ramp-up stage.

SEANA SMITH: Alexious Lee, congratulations on the SPAC today, on the debut. We appreciate you taking the time, CFO of Lotus Tech. And, of course, our thanks to Pras Subramanian as well.