Lotus Considers Shifting UK Production to the US Amid Tariff Challenges
Published 27 June 2025
Highlights
- Lotus is considering relocating its sportscar production from the UK to the US, potentially affecting 1,300 jobs at its Hethel, Norfolk plant.
- The move is driven by US tariffs on car imports, which have significantly impacted Lotus's export business.
- Geely, Lotus's Chinese parent company, is exploring options to manufacture the Emira sportscar in the US, though no final decision has been made.
- The UK and US have agreed to reduce tariffs on UK-made cars to 10%, effective at the end of June, but current tariffs remain a challenge.
- Lotus's production in Norfolk has been paused since mid-May due to inventory and supply chain issues exacerbated by the tariffs.
-
Rewritten Article
Lotus Considers Shifting UK Production to the US Amid Tariff Challenges
Lotus, the iconic British sportscar manufacturer, is contemplating a significant shift in its production strategy by moving its operations from the UK to the United States. This potential relocation could jeopardize 1,300 jobs at its Hethel, Norfolk facility, a move that underscores the challenges posed by US tariffs on car imports.
Impact of US Tariffs on Lotus
The decision to consider relocating production comes in response to the US imposing a 25% tariff on imported cars and car parts, a measure that has halved UK car exports to the US. Although a new trade agreement between the UK and US will reduce these tariffs to 10% by the end of June, the current rates have already caused significant disruption. Lotus, owned by the Chinese automotive giant Geely, has paused production in Norfolk since mid-May to manage inventory and supply chain issues.
Geely's Strategic Considerations
Geely, which acquired a majority stake in Lotus in 2017, is evaluating the possibility of manufacturing the Emira sportscar in the US. This move aligns with Geely's broader strategy to optimize its global operations, which include brands like Volvo and Lynk & Co. While no final decision has been made, the potential shift is part of Geely's efforts to navigate the evolving automotive landscape and mitigate the impact of tariffs.
Historical and Economic Context
Lotus, founded in 1948 by Colin Chapman, has been synonymous with British sportscar engineering. The Hethel plant, located in a former World War II bomber facility, has been a cornerstone of the UK car industry. However, the recent economic pressures have forced the company to reassess its operations. Geely's focus on expanding its production capabilities in China, particularly with the electric SUV Eletre, further complicates the future of Lotus's UK operations.
-
Scenario Analysis
If Lotus proceeds with relocating its production to the US, it could mark a significant shift in the British automotive landscape, potentially leading to criticism from UK stakeholders. The move may also influence other manufacturers facing similar tariff challenges. Conversely, should the tariff reduction prove beneficial, Lotus might reconsider its position, maintaining its historical ties to the UK. Experts suggest that Geely's decision will likely hinge on balancing cost efficiencies with brand heritage, as well as the evolving trade relations between the UK and US.
Lotus, the iconic British sportscar manufacturer, is contemplating a significant shift in its production strategy by moving its operations from the UK to the United States. This potential relocation could jeopardize 1,300 jobs at its Hethel, Norfolk facility, a move that underscores the challenges posed by US tariffs on car imports.
Impact of US Tariffs on Lotus
The decision to consider relocating production comes in response to the US imposing a 25% tariff on imported cars and car parts, a measure that has halved UK car exports to the US. Although a new trade agreement between the UK and US will reduce these tariffs to 10% by the end of June, the current rates have already caused significant disruption. Lotus, owned by the Chinese automotive giant Geely, has paused production in Norfolk since mid-May to manage inventory and supply chain issues.
Geely's Strategic Considerations
Geely, which acquired a majority stake in Lotus in 2017, is evaluating the possibility of manufacturing the Emira sportscar in the US. This move aligns with Geely's broader strategy to optimize its global operations, which include brands like Volvo and Lynk & Co. While no final decision has been made, the potential shift is part of Geely's efforts to navigate the evolving automotive landscape and mitigate the impact of tariffs.
Historical and Economic Context
Lotus, founded in 1948 by Colin Chapman, has been synonymous with British sportscar engineering. The Hethel plant, located in a former World War II bomber facility, has been a cornerstone of the UK car industry. However, the recent economic pressures have forced the company to reassess its operations. Geely's focus on expanding its production capabilities in China, particularly with the electric SUV Eletre, further complicates the future of Lotus's UK operations.
What this might mean
If Lotus proceeds with relocating its production to the US, it could mark a significant shift in the British automotive landscape, potentially leading to criticism from UK stakeholders. The move may also influence other manufacturers facing similar tariff challenges. Conversely, should the tariff reduction prove beneficial, Lotus might reconsider its position, maintaining its historical ties to the UK. Experts suggest that Geely's decision will likely hinge on balancing cost efficiencies with brand heritage, as well as the evolving trade relations between the UK and US.
