10q10k10q10k.net

What changed in Lotus Technology Inc.'s 20-F — 2023 vs 2024

vs

Paragraph-level year-over-year comparison of Lotus Technology Inc.'s 2023 and 2024 20-F annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2024 report.

+616 added−552 removedSource: 20-F (2025-04-30) vs 20-F (2023-12-31)

Top changes in Lotus Technology Inc.'s 2024 20-F

616 paragraphs added · 552 removed · 436 edited across 5 sections

Item 3. Legal Proceedings

Legal Proceedings — active lawsuits and investigations

173 edited+59 added−43 removed718 unchanged
Biggest change(2) Represents the elimination of investments among the Lotus Technology Inc., the WFOE, the former VIE and its subsidiaries and other subsidiaries. 15 Table of Contents Selected Consolidated and Combined Cash Flows Information The following tables present our condensed consolidating schedule depicting the consolidated and combined cash flows for the fiscal years ended December 31, 2023, 2022, and 2021 of Lotus Technology Inc., the WFOE, the VIEs, other subsidiaries, and corresponding eliminating adjustments separately. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year Ended December 31, 2023 ​ ​ (in thousands) ​ ​ ​ ​ ​ ​ The former ​ ​ ​ ​ ​ ​ ​ ​ Lotus ​ ​ ​ VIE ​ ​ ​ ​ ​ ​ ​ ​ Technology ​ ​ ​ and its ​ Other ​ Elimination ​ ​ ​ ​ Inc. ​ WFOE ​ subsidiaries ​ Subsidiaries ​ adjustments ​ Consolidated Operating activities: Net cash generated from (used in) operating activities 3,127 (49,744) (8,281) (332,034) — (386,932) Investing activities: Payments for purchases of property, equipment and software and intangible assets — (51,656) — (162,058) — (213,714) Proceeds from disposal of property, equipment and software — 4,184 — 933 — 5,117 Payments for purchases of short-term investments — — (38,254) — — (38,254) Proceeds from sales of short-term investments — — — 37,428 — 37,428 Receipt of government grant related to assets — 16,345 — — — 16,345 Payments for investments in equity investees — (2) (146) (4,911) — (5,059) Proceeds from disposal of a subsidiary, net of cash disposed — — — 1,379 — 1,379 Loans to related parties — — — (1,227) — (1,227) Loans to intercompanies (231,578) (316,713) — (180,466) 728,757 (1) ​ — Proceeds from collection of loans from intercompanies 186,148 150,870 — 71,849 (408,867) (4) ​ — Cash contribution to consolidated entities (302,267) (22,347) — (89,408) 414,022 (3) ​ — Net cash used in investing activities (347,697) (219,319) (38,400) (326,481) 733,912 (197,985) Financing activities: Proceeds from settlement of receivable from shareholders 7,514 — 18,625 — — 26,139 Proceeds from issuance of convertible notes 25,297 — — — — 25,297 Proceeds from issuance of exchangeable notes — 27,883 — — — 27,883 Repayment of mandatorily redeemable noncontrolling interest — — — (11,554) — (11,554) Payment for redemption of convertible notes (5,648) — — — — (5,648) Receipts of refundable deposits in connection with the Private Investment in Public Equity (“PIPE”) investments — 10,000 — — — 10,000 Capital contributions by noncontrolling interests — — — 4,460 — 4,460 Proceeds from bank loans — 182,497 — 298,679 — 481,176 Repayments for bank loans — (102,736) — (170,161) — (272,897) Payments to a noncontrolling interest in the liquidation of a subsidiary — — (148) — — (148) Proceeds from loans borrowed from intercompanies — 180,466 — 548,291 (728,757) (1) ​ — Repayments for loans borrowed from intercompanies — (71,849) — (337,018) 408,867 (4) ​ — Cash contributed by the respective parent companies — 89,408 — 324,614 (414,022) (3) ​ — Cash transfer due to the Restructuring — (32,715) (125,794) 158,509 — (5) ​ — Net cash provided by (used in) financing activities 27,163 282,954 (107,317) 815,820 (733,912) 284,708 Effect of exchange rate changes on cash and restricted cash (1,812) (6,610) (2,573) (1,194) — (12,189) Net (decrease) increase in cash and restricted cash (319,219) 7,281 (156,571) 156,111 — (312,398) Cash and restricted cash at the beginning of the year 353,107 150,904 156,571 78,951 — 739,533 Cash and restricted cash at the end of the year 33,888 158,185 — 235,062 — 427,135 ​ ​ 16 Table of Contents ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year Ended December 31, 2022 ​ ​ (in thousands) ​ ​ ​ ​ ​ ​ The former ​ ​ ​ ​ ​ ​ ​ ​ Lotus ​ ​ ​ VIE ​ ​ ​ ​ ​ ​ ​ ​ Technology ​ ​ ​ and its ​ Other ​ Elimination ​ ​ ​ ​ Inc. ​ WFOE ​ subsidiaries ​ Subsidiaries ​ adjustments ​ Consolidated Operating activities: Net cash generated from (used in) operating activities 2,682 (144,423) (8,869) (200,809) — (351,419) Investing activities: Payments for purchases of property, equipment and software and intangible assets — (71,839) (2,635) (58,871) — (133,345) Proceeds from disposal of property, equipment and software — 33 — 1,038 — 1,071 Payments for purchases of short-term investments (10,000) — (290,662) — — (300,662) Proceeds from sales of short-term investments — — 289,587 — — 289,587 Payment upon settlement of derivative instruments (2,652) 2,011 — — — (641) Payments for investments in equity investees — — (1,920) (1,194) — (3,114) Loans to related parties — — — (2,310) — (2,310) Loans to intercompanies (5,876) (49,602) — — 55,478 (1) ​ — Proceeds from collection of advances from an intercompany — 10,611 — — (10,611) (2) ​ — Cash contribution to consolidated entities (94,688) (137,200) — — 231,888 (3) ​ — Net cash used in investing activities (113,216) (245,986) (5,630) (61,337) 276,755 (149,414) Financing activities: Proceeds from settlement of receivable from shareholders 74,638 — 1,509 — — 76,147 Proceeds from issuance of Series Pre-A Preferred Shares 129,681 — — — — 129,681 Proceeds from issuance of Series A Preferred Shares 187,734 — — — — 187,734 Repayment of exchangeable notes for issuance of Series A Preferred Shares — (57,430) — — — (57,430) Proceeds from issuance of convertible notes — — 75,037 — — 75,037 Proceeds from issuance of exchangeable notes — 307,172 71,792 — — 378,964 Receipt of refundable deposits in connection with the issuance of Series A Preferred Shares — 28,945 — — — 28,945 Repayment of refundable deposits in connection with the issuance of Series A Preferred Shares — (28,628) — — — (28,628) Consideration payment in connection with reorganization — — — (50,794) — (50,794) Capital contribution by noncontrolling interests — — 149 — — 149 Repayment of loans from a related party — — — (9,844) — (9,844) Proceeds from bank loans — — — 28,170 — 28,170 Proceeds from loans borrowed from intercompanies — — — 55,478 (55,478) (1) ​ — Repayment of advances from an intercompany — — (10,611) — 10,611 (2) ​ — Cash contributed by the respective parent companies — — — 231,888 (231,888) (3) ​ — Net cash provided by financing activities 392,053 250,059 137,876 254,898 (276,755) 758,131 Effect of exchange rate changes on cash and restricted cash (10,161) (17,008) (15,900) (6,148) — (49,217) Net increase (decrease) in cash and restricted cash 271,358 (157,358) 107,477 (13,396) — 208,081 Cash and restricted cash at the beginning of the year 81,749 308,350 49,094 92,259 — 531,452 Cash and restricted cash at the end of the year 353,107 150,992 156,571 78,863 — 739,533 ​ ​ 17 Table of Contents ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year Ended December 31, 2021 ​ ​ (in thousands) ​ ​ ​ ​ ​ ​ The former ​ ​ ​ ​ ​ ​ ​ ​ Lotus ​ ​ ​ VIE ​ ​ ​ ​ ​ ​ ​ ​ Technology ​ ​ ​ and its ​ Other ​ Elimination ​ ​ ​ ​ Inc. ​ WFOE ​ subsidiaries ​ Subsidiaries ​ adjustments ​ Consolidated Operating activities: Net cash used in operating activities (997) (77,377) (7,993) (40,138) — (126,505) Investing activities: Payments for purchases of property, equipment and software and intangible assets — (13,845) — (20,745) — (34,590) Proceeds from disposal of property, equipment and software — 14 — — — 14 Receipt of government grant related to assets — 279,052 — — — 279,052 Advances to an intercompany — (11,055) — — 11,055 (2) ​ — Cash contribution to consolidated entities — (108,898) — — 108,898 (3) ​ — Net cash provided by (used in) investing activities — 145,268 — (20,745) 119,953 244,476 Financing activities: Proceeds from issuance of ordinary shares 58,631 100,690 38,597 — — 197,918 Proceeds from issuance of convertible notes 23,445 — — — — 23,445 Proceeds from issuance of exchangeable notes — 125,039 — — — 125,039 Proceeds from issuance of mandatorily redeemable noncontrolling interest — — 6,299 — — 6,299 Capital contribution from shareholders — 15,695 — — — 15,695 Dividends paid to a shareholder — — — (1,880) — (1,880) Consideration payment in connection with reorganization — (1,663) — — — (1,663) Proceeds from advances from an intercompany — — 11,055 — (11,055) (2) ​ — Cash contributed by the respective parent company — — — 108,898 (108,898) (3) ​ — Net cash provided by financing activities 82,076 239,761 55,951 107,018 (119,953) 364,853 Effect of exchange rate changes on cash 670 698 1,136 439 — 2,943 Net increase in cash and restricted cash 81,749 308,350 49,094 46,574 — 485,767 Cash and restricted cash at the beginning of the year — — — 45,685 — 45,685 Cash and restricted cash at the end of the year 81,749 308,350 49,094 92,259 — 531,452 Notes: (1) For the year ended December 31, 2022, Lotus Technology Inc. provided loans in the amount of US$5.9 million to its subsidiary, Lotus Tech UK, and the WFOE provided loans in the amount of US$49.6 million to its subsidiary, Wuhan Lotus Cars.
Biggest changeSelected Consolidated and Combined Statements of Comprehensive Loss Information The following tables present our condensed consolidating schedule depicting the consolidated and combined statements of comprehensive loss for the fiscal years ended December 31, 2023 and 2022 of Lotus Technology Inc., the WFOE, the former VIE, other subsidiaries, and corresponding eliminating adjustments separately. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year Ended December 31, 2023 ​ ​ US$ ​ ​ (in thousands) ​ ​ ​ ​ ​ ​ The former ​ ​ ​ ​ ​ ​ ​ ​ Lotus ​ ​ ​ VIE ​ ​ ​ ​ ​ ​ ​ ​ Technology ​ ​ ​ and its ​ Other ​ Elimination ​ ​ ​ ​ Inc. ​ WFOE ​ subsidiaries ​ Subsidiaries ​ adjustments ​ Consolidated Revenues — 174,789 — 679,342 (175,123) (1) ​ 679,008 Cost of revenues — (24,667) — (577,215) 25,055 (1) ​ (576,827) Gross profit — 150,122 — 102,127 (150,068) 102,181 Total operating expenses (2,983) (84,055) (15,396) (885,754) 150,068 (1) ​ (838,120) Operating loss (2,983) 66,067 (15,396) (783,627) — (735,939) Interest expenses — (4,908) (30) (16,516) 11,254 (2) ​ (10,200) Interest income 6,979 8,108 551 4,820 (11,254) (2) ​ 9,204 Investment income (loss), net (5,084) — (1,010) 4,932 — (1,162) Share of results of equity method investments — (1) — (1,047) — (1,048) Foreign currency exchange gains (losses), net (171) (240) 1 452 — 42 Changes in fair values of mandatorily redeemable noncontrolling interest, exchangeable notes and convertible notes, excluding impact of instrument-specific credit risk (616) (738) (1,497) (4,680) — (7,531) Changes in fair values of put options liabilities (2,508) — — — — (2,508) (Gain)/loss on the Restructuring — — (56,752) 56,752 — — Share of losses from consolidated entities (737,618) — — — 737,618 (3) ​ — Profit (loss) before income taxes (742,001) 68,288 (74,133) (738,914) 737,618 (749,142) Income tax expense — — (4) (1,109) — (1,113) Net profit (loss) (742,001) 68,288 (74,137) (740,023) 737,618 (750,255) Less: Net loss attributable to noncontrolling interests — — (2,401) (5,853) — (8,254) Net profit (loss) attributable to ordinary shareholders (742,001) 68,288 (71,736) (734,170) 737,618 (742,001) Net profit (loss) (742,001) 68,288 (74,137) (740,023) 737,618 (750,255) Fair value changes of mandatorily redeemable noncontrolling interest, exchangeable notes and convertible notes due to instrument-specific credit risk, net of nil income taxes (8,650) (272) — (8,378) 8,650 (3) ​ (8,650) Foreign currency translation adjustment, net of nil income taxes 16,210 1,556 1,173 7,475 (10,204) (3) ​ 16,210 Total other comprehensive income (loss) 7,560 1,284 1,173 (903) (1,554) 7,560 Less: Total comprehensive loss attributable to noncontrolling interests — — (2,297) (5,957) — (8,254) Total comprehensive income (loss) attributable to ordinary shareholders (734,441) 69,572 (70,667) (734,969) 736,064 (734,441) ​ 11 Table of Contents ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year Ended December 31, 2022 ​ ​ US$ ​ ​ (in thousands) ​ ​ ​ ​ ​ ​ The former ​ ​ ​ ​ ​ ​ ​ ​ Lotus ​ ​ ​ VIE ​ ​ ​ ​ ​ ​ ​ ​ Technology ​ ​ ​ and its ​ Other ​ Elimination ​ ​ ​ ​ Inc. ​ WFOE ​ subsidiaries ​ Subsidiaries ​ adjustments ​ Consolidated Revenues — 44,517 — 13,876 (48,836) (1) ​ 9,557 Cost of revenues — (24,645) — (11,010) 28,405 (1) ​ (7,250) Gross profit — 19,872 — 2,866 (20,431) 2,307 Total operating expenses (11,127) (131,238) (42,609) (525,177) 20,431 (1) ​ (689,720) Operating loss (11,127) (111,366) (42,609) (522,311) — (687,413) Interest expenses — (8,135) — (730) 323 (2) ​ (8,542) Interest income 2,839 6,977 1,006 1,689 (323) (2) ​ 12,188 Investment income (loss), net (4,242) — 996 — — (3,246) Share of results of equity method investments — — (1,821) (941) — (2,762) Foreign currency exchange gains (losses), net (13,068) (511) (101) 2,175 — (11,505) Changes in fair values of mandatorily redeemable noncontrolling interest, exchangeable notes and convertible notes, excluding impact of instrument-specific credit risk — (13,162) (9,829) — — (22,991) Share of losses from consolidated entities (698,323) — — — 698,323 (3) ​ — Loss before income taxes (723,921) (126,197) (52,358) (520,118) 698,323 (724,271) Income tax expense — — (73) (219) — (292) Net loss (723,921) (126,197) (52,431) (520,337) 698,323 (724,563) Less: Net loss attributable to noncontrolling interests — — (642) — — (642) Net loss attributable to ordinary shareholders (723,921) (126,197) (51,789) (520,337) 698,323 (723,921) Net loss (723,921) (126,197) (52,431) (520,337) 698,323 (724,563) Fair value changes of mandatorily redeemable noncontrolling interest, exchangeable notes and convertible notes due to instrument-specific credit risk, net of nil income taxes (893) (33) (860) — 893 (3) ​ (893) Foreign currency translation adjustment, net of nil income taxes 18,669 (1,668) (943) 2,221 390 (3) ​ 18,669 Total other comprehensive income (loss) 17,776 (1,701) (1,803) 2,221 1,283 17,776 Less: Total comprehensive loss attributable to noncontrolling interests — — (642) — — (642) Total comprehensive loss attributable to ordinary shareholders (706,145) (127,898) (53,592) (518,116) 699,606 (706,145) ​ 12 Table of Contents Selected Consolidated Balance Sheets Information The following table presents our condensed consolidating schedule depicting the consolidated balance sheets as of December 31, 2023 of Lotus Technology Inc., the WFOE, the former VIE, other subsidiaries, and corresponding eliminating adjustments separately. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ As of December 31, 2023 ​ ​ US$ ​ ​ (in thousands) ​ ​ ​ ​ ​ ​ The former ​ ​ ​ ​ ​ ​ ​ ​ Lotus ​ ​ ​ VIE ​ ​ ​ ​ ​ ​ ​ ​ Technology ​ ​ ​ and its ​ Other ​ Elimination ​ ​ ​ ​ Inc. ​ WFOE ​ subsidiaries ​ Subsidiaries ​ adjustments ​ Consolidated ASSETS ​ ​ Current assets ​ ​ Cash 33,888 151,125 — 233,928 — 418,941 Restricted cash — 7,061 — 812 — 7,873 Accounts receivable – third parties, net — — — 76,664 — 76,664 Accounts receivable – related parties, net — 775 — 21,655 — 22,430 Inventories — — — 265,190 — 265,190 Prepayments and other current assets – third parties, net 1,687 925 — 61,258 — 63,870 Prepayments and other current assets – related parties, net — 3 — 28,741 — 28,744 Amounts due from inter-companies 46,087 469,019 — 211,807 (726,913) (1) ​ — Total current assets 81,662 628,908 — 900,055 (726,913) 883,712 Non-current assets ​ ​ Restricted cash — — — 321 — 321 Investment securities – related parties 3,326 — — — — 3,326 Property, equipment and software, net — 105,851 — 248,766 — 354,617 Intangible assets — 41 — 116,319 — 116,360 Operating lease right-of-use assets — 75,758 — 97,345 — 173,103 Other non-current assets – third parties — 1,100 — 49,433 — 50,533 Other non-current assets – related parties — — — 2,706 — 2,706 Investments in consolidated entities — 278,648 — 205,957 (484,605) (2) ​ — Total non-current assets 3,326 461,398 — 720,847 (484,605) 700,966 Total assets 84,988 1,090,306 — 1,620,902 (1,211,518) 1,584,678 LIABILITIES, MEZZANINE EQUITY AND SHAREHOLDERS’ EQUITY ​ ​ Current Liabilities ​ ​ Short-term borrowings – third parties — 75,624 — 151,148 — 226,772 Accounts payable – third parties — 18 — 20,105 — 20,123 Accounts payable – related parties — — — 340,419 — 340,419 Contract liabilities – third parties — — — 44,184 — 44,184 Operating lease liabilities – third parties — 4,454 — 12,306 — 16,760 Accrued expenses and other current liabilities – third parties 714 99,466 — 319,242 — 419,422 Accrued expenses and other current liabilities – related parties — 4,504 — 286,182 — 290,686 Exchangeable notes — 378,638 — — — 378,638 Convertible notes 20,277 — — — — 20,277 Amounts due to inter-companies — 115,079 — 611,834 (726,913) (1) ​ — Total current liabilities 20,991 677,783 — 1,785,420 (726,913) 1,757,281 Non-current liabilities ​ ​ Contract liabilities – third parties — — — 6,245 — 6,245 Operating lease liabilities – third parties — 39,815 — 52,114 — 91,929 Operating lease liabilities – related parties — — — 12,064 — 12,064 Put option liabilities 11,884 — — — — 11,884 Exchangeable notes — — — 75,678 — 75,678 Convertible notes — — — 81,635 — 81,635 Deferred tax liabilities — — — — — — Deferred income — 268,259 — 1,838 — 270,097 Other non-current liabilities – third parties — — — 103,403 — 103,403 Other non-current liabilities – related parties — — — 1,634 — 1,634 Share of losses in excess of investments in consolidated entities 873,881 — — — (873,881) (2) ​ — Total non-current liabilities 885,765 308,074 — 334,611 (873,881) 654,569 Total liabilities 906,756 985,857 — 2,120,031 (1,600,794) 2,411,850 Total mezzanine equity 383,530 — — — — 383,530 SHAREHOLDERS’ EQUITY (DEFICIT) ​ ​ Ordinary shares 21 160,651 — 251,376 (412,027) (2) ​ 21 Additional paid-in capital 358,187 56,776 — 700,734 (757,510) (2) ​ 358,187 Accumulated other comprehensive income 25,267 793 — 1,027 (1,820) (2) ​ 25,267 Accumulated deficit (1,588,773) (113,771) — (1,446,862) 1,560,633 (2) ​ (1,588,773) Total shareholders’ equity (deficit) attributable to ordinary shareholders (1,205,298) 104,449 — (493,725) 389,276 (1,205,298) Noncontrolling interests — — — (5,404) — (5,404) Total shareholders’ equity (deficit) (1,205,298) 104,449 — (499,129) 389,276 (1,210,702) Total liabilities, mezzanine equity and shareholders’ deficit 84,988 1,090,306 — 1,620,902 (1,211,518) 1,584,678 ​ 13 Table of Contents Selected Consolidated and Combined Cash Flows Information The following tables present our condensed consolidating schedule depicting the consolidated and combined cash flows for the fiscal years ended December 31, 2023 and 2022 of Lotus Technology Inc., the WFOE, the VIEs, other subsidiaries, and corresponding eliminating adjustments separately. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year Ended December 31, 2023 ​ ​ (in thousands) ​ ​ ​ ​ ​ ​ The former ​ ​ ​ ​ ​ ​ ​ ​ Lotus ​ ​ ​ VIE ​ ​ ​ ​ ​ ​ ​ ​ Technology ​ ​ ​ and its ​ Other ​ Elimination ​ ​ ​ ​ Inc. ​ WFOE ​ subsidiaries ​ Subsidiaries ​ adjustments ​ Consolidated Operating activities: Net cash generated from (used in) operating activities 3,127 (49,744) (8,281) (332,034) — (386,932) Investing activities: Payments for purchases of property, equipment and software and intangible assets — (51,656) — (162,058) — (213,714) Proceeds from disposal of property, equipment and software — 4,184 — 933 — 5,117 Payments for purchases of short-term investments — — (38,254) — — (38,254) Proceeds from sales of short-term investments — — — 37,428 — 37,428 Receipt of government grant related to assets — 16,345 — — — 16,345 Payments for investments in equity investees — (2) (146) (4,911) — (5,059) Proceeds from disposal of a subsidiary, net of cash disposed — — — 1,379 — 1,379 Loans to related parties — — — (1,227) — (1,227) Loans to intercompanies (231,578) (316,713) — (180,466) 728,757 (1) ​ — Proceeds from collection of loans from intercompanies 186,148 150,870 — 71,849 (408,867) (4) ​ — Cash contribution to consolidated entities (302,267) (22,347) — (89,408) 414,022 (3) ​ — Net cash used in investing activities (347,697) (219,319) (38,400) (326,481) 733,912 (197,985) Financing activities: Proceeds from settlement of receivable from shareholders 7,514 — 18,625 — — 26,139 Proceeds from issuance of convertible notes 25,297 — — — — 25,297 Proceeds from issuance of exchangeable notes — 27,883 — — — 27,883 Repayment of mandatorily redeemable noncontrolling interest — — — (11,554) — (11,554) Payment for redemption of convertible notes (5,648) — — — — (5,648) Receipts of refundable deposits in connection with the Private Investment in Public Equity (“PIPE”) investments — 10,000 — — — 10,000 Capital contributions by noncontrolling interests — — — 4,460 — 4,460 Proceeds from bank loans — 182,497 — 298,679 — 481,176 Repayments for bank loans — (102,736) — (170,161) — (272,897) Payments to a noncontrolling interest in the liquidation of a subsidiary — — (148) — — (148) Proceeds from loans borrowed from intercompanies — 180,466 — 548,291 (728,757) (1) ​ — Repayments for loans borrowed from intercompanies — (71,849) — (337,018) 408,867 (4) ​ — Cash contributed by the respective parent companies — 89,408 — 324,614 (414,022) (3) ​ — Cash transfer due to the Restructuring — (32,715) (125,794) 158,509 — (5) ​ — Net cash provided by (used in) financing activities 27,163 282,954 (107,317) 815,820 (733,912) 284,708 Effect of exchange rate changes on cash and restricted cash (1,812) (6,610) (2,573) (1,194) — (12,189) Net (decrease) increase in cash and restricted cash (319,219) 7,281 (156,571) 156,111 — (312,398) Cash and restricted cash at the beginning of the year 353,107 150,904 156,571 78,951 — 739,533 Cash and restricted cash at the end of the year 33,888 158,185 — 235,062 — 427,135 ​ ​ 14 Table of Contents ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year Ended December 31, 2022 ​ ​ (in thousands) ​ ​ ​ ​ ​ ​ The former ​ ​ ​ ​ ​ ​ ​ ​ Lotus ​ ​ ​ VIE ​ ​ ​ ​ ​ ​ ​ ​ Technology ​ ​ ​ and its ​ Other ​ Elimination ​ ​ ​ ​ Inc. ​ WFOE ​ subsidiaries ​ Subsidiaries ​ adjustments ​ Consolidated Operating activities: Net cash generated from (used in) operating activities 2,682 (144,423) (8,869) (200,809) — (351,419) Investing activities: Payments for purchases of property, equipment and software and intangible assets — (71,839) (2,635) (58,871) — (133,345) Proceeds from disposal of property, equipment and software — 33 — 1,038 — 1,071 Payments for purchases of short-term investments (10,000) — (290,662) — — (300,662) Proceeds from sales of short-term investments — — 289,587 — — 289,587 Payment upon settlement of derivative instruments (2,652) 2,011 — — — (641) Payments for investments in equity investees — — (1,920) (1,194) — (3,114) Loans to related parties — — — (2,310) — (2,310) Loans to intercompanies (5,876) (49,602) — — 55,478 (1) ​ — Proceeds from collection of advances from an intercompany — 10,611 — — (10,611) (2) ​ — Cash contribution to consolidated entities (94,688) (137,200) — — 231,888 (3) ​ — Net cash used in investing activities (113,216) (245,986) (5,630) (61,337) 276,755 (149,414) Financing activities: Proceeds from settlement of receivable from shareholders 74,638 — 1,509 — — 76,147 Proceeds from issuance of Series Pre-A Preferred Shares 129,681 — — — — 129,681 Proceeds from issuance of Series A Preferred Shares 187,734 — — — — 187,734 Repayment of exchangeable notes for issuance of Series A Preferred Shares — (57,430) — — — (57,430) Proceeds from issuance of convertible notes — — 75,037 — — 75,037 Proceeds from issuance of exchangeable notes — 307,172 71,792 — — 378,964 Receipt of refundable deposits in connection with the issuance of Series A Preferred Shares — 28,945 — — — 28,945 Repayment of refundable deposits in connection with the issuance of Series A Preferred Shares — (28,628) — — — (28,628) Consideration payment in connection with reorganization — — — (50,794) — (50,794) Capital contribution by noncontrolling interests — — 149 — — 149 Repayment of loans from a related party — — — (9,844) — (9,844) Proceeds from bank loans — — — 28,170 — 28,170 Proceeds from loans borrowed from intercompanies — — — 55,478 (55,478) (1) ​ — Repayment of advances from an intercompany — — (10,611) — 10,611 (2) ​ — Cash contributed by the respective parent companies — — — 231,888 (231,888) (3) ​ — Net cash provided by financing activities 392,053 250,059 137,876 254,898 (276,755) 758,131 Effect of exchange rate changes on cash and restricted cash (10,161) (17,008) (15,900) (6,148) — (49,217) Net increase (decrease) in cash and restricted cash 271,358 (157,358) 107,477 (13,396) — 208,081 Cash and restricted cash at the beginning of the year 81,749 308,350 49,094 92,259 — 531,452 Cash and restricted cash at the end of the year 353,107 150,992 156,571 78,863 — 739,533 ​ Notes: (1) For the year ended December 31, 2022, Lotus Technology Inc. provided loans in the amount of US$5.9 million to its subsidiary, Lotus Tech UK, and the WFOE provided loans in the amount of US$49.6 million to its subsidiary, Wuhan Lotus Cars.
In connection with the Restructuring, the WFOE, the former VIE, and nominee shareholders of the former VIE entered into VIE Restructuring Agreements in early 2023, pursuant to which, (i) WFOE acquired 100% equity interest in Sanya Lotus Venture Capital Co., Ltd. and Hangzhou Lotus Technology Service Co., Ltd., subsidiaries of the former VIE; (ii) except for the ICP license, all of the former VIE’s assets and liabilities, including its business contracts, intellectual properties and employees, were transferred to the WFOE or subsidiaries of the WFOE at nil consideration; and (iii) the VIE Agreements were terminated.
In connection with the Restructuring, the WFOE, the former VIE, and nominee shareholders of the former VIE entered into the VIE Restructuring Agreements in early 2023, pursuant to which, (i) WFOE acquired 100% equity interest in Sanya Lotus Venture Capital Co., Ltd. and Hangzhou Lotus Technology Service Co., Ltd., subsidiaries of the former VIE; (ii) except for the ICP license, all of the former VIE’s assets and liabilities, including its business contracts, intellectual properties and employees, were transferred to the WFOE or subsidiaries of the WFOE at nil consideration; and (iii) the VIE Agreements were terminated.
Risks Relating to Our Securities ● If securities or industry analysts do not publish research, publish inaccurate or unfavorable research or cease publishing research about us, the price for our ADSs and the trading volume could decline significantly. ● Resales of our securities by our securityholders may cause the market price of the our securities to drop significantly, even if our business is doing well. ● The trading prices of our ADSs and Warrants may be volatile and a market for our ADSs may not develop, which would adversely affect the liquidity and price of our ADSs .
Risks Relating to Our Securities ● If securities or industry analysts do not publish research, publish inaccurate or unfavorable research or cease publishing research about us, the price for our ADSs and the trading volume could decline significantly. ● Resales of our securities by our securityholders may cause the market price of our securities to drop significantly, even if our business is doing well. ● The trading prices of our ADSs and Warrants may be volatile and a market for our ADSs may not develop, which would adversely affect the liquidity and price of our ADSs .
In addition, the completion of any overseas follow-on offerings by an issuer in the same overseas market where it has completed its public offering and listing would necessitate a filing with CSRC within three business days thereafter.
In addition, the completion of any overseas follow-on offerings by an issuer in the same overseas market where it has completed its public offering and listing would necessitate a filing with CSRC within three business days thereafter.
On December 15, 2022, the PCAOB issued a report that vacated its December 16, 2021 determination and removed mainland China and Hong Kong from the list of jurisdictions where it is unable to inspect or investigate completely registered public accounting firms.
On December 15, 2022, the PCAOB issued a report that vacated its December 16, 2021 determination and removed mainland China and Hong Kong from the list of jurisdictions where it is unable to inspect or investigate completely registered public accounting firms.
Resales of our securities by our securityholders may cause the market price of the our securities to drop significantly, even if our business is doing well.
Resales of our securities by our securityholders may cause the market price of our securities to drop significantly, even if our business is doing well.
Except as described in this annual report and in the deposit agreement, holders of the our ADSs will not be able to exercise voting rights attaching to the underlying Ordinary Shares evidenced by the ADSs on an individual basis.
Except as described in this annual report and in the deposit agreement, holders of our ADSs will not be able to exercise voting rights attaching to the underlying Ordinary Shares evidenced by the ADSs on an individual basis.
A holder of the our ADSs may only exercise the voting rights with respect to the underlying Ordinary Shares in accordance with the provisions of the deposit agreement.
A holder of our ADSs may only exercise the voting rights with respect to the underlying Ordinary Shares in accordance with the provisions of the deposit agreement.
When a general meeting is convened, holders of our ADSs may not receive sufficient notice of a shareholders’ meeting to permit them to withdraw the Ordinary Shares underlying the our ADSs to allow them to cast their votes with respect to any specific matter.
When a general meeting is convened, holders of our ADSs may not receive sufficient notice of a shareholders’ meeting to permit them to withdraw the Ordinary Shares underlying our ADSs to allow them to cast their votes with respect to any specific matter.
The depositary of the our ADSs has agreed to pay holders of our ADSs the cash dividends or other distributions it or the custodian for the our ADSs receives on Ordinary Shares or other deposited securities after deducting its fees and expenses in accordance with the deposit agreement.
The depositary of our ADSs has agreed to pay holders of our ADSs the cash dividends or other distributions it or the custodian for our ADSs receives on Ordinary Shares or other deposited securities after deducting its fees and expenses in accordance with the deposit agreement.
The depositary is not responsible for making a distribution available to any holders of our ADSs if any government approval or registration is required for such distribution. We have no obligation to take any other action to permit the distribution of the our ADSs, equity shares, rights or anything else to holders of the our ADSs.
The depositary is not responsible for making a distribution available to any holders of our ADSs if any government approval or registration is required for such distribution. We have no obligation to take any other action to permit the distribution of our ADSs, equity shares, rights or anything else to holders of our ADSs.
For more details of the Opinions and the Overseas Listing Filing Rules, see “Information about Lotus Tech—PRC Government Regulations—Regulations on Mergers and Acquisitions and Overseas Listing.” Based on the Notice on Administration for the Filing of Overseas Offering and Listing by Domestic Companies published by CSRC on February 17, 2023, or the Notice on the Overseas Listing Filing, and the set of Q&A which are in connection with the release of the Overseas Listing Filing Rules, CSRC clarifies that (i) on or prior to the effective date of the Overseas Listing Filing Rules, domestic companies that have already submitted valid applications for overseas offering and listing but have not obtained approval from overseas regulatory authorities or stock exchanges may reasonably arrange the timing for submitting their filing applications with CSRC, and must complete the filing before the completion of their overseas offering and listing; (ii) a transition period until September 30, 2023 will be granted to domestic companies which have already obtained the approval from overseas regulatory authorities or stock exchanges but have not completed the indirect overseas listing prior to the effective date of the Overseas Listing Filing Rules; if domestic companies fail to complete the overseas listing prior to September 30, 2023, they shall file with CSRC according to the requirements. 51 Table of Contents Further, according to the Overseas Listing Filing Rules, for an issuer which is already listed, it should make filing in accordance with the Overseas Listing Filing Rules if: (i) it issues additional convertible bonds, exchangeable bonds or preferred shares, (ii) it issues additional securities in the same overseas market, excluding securities issued for the purpose of implementing equity incentive, distribution of stock dividends, share split, etc., (iii) it issues additional securities in several offerings within its authorized scope; or (iv) it conducts a secondary listing or primary listing in any other overseas market.
For more details of the Opinions and the Overseas Listing Filing Rules, see “Information about Lotus Tech—PRC Government Regulations—Regulations on Mergers and Acquisitions and Overseas Listing.” Based on the Notice on Administration for the Filing of Overseas Offering and Listing by Domestic Companies published by CSRC on February 17, 2023, or the Notice on the Overseas Listing Filing, and the set of Q&A which are in connection with the release of the Overseas Listing Filing Rules, CSRC clarifies that (i) on or prior to the effective date of the Overseas Listing Filing Rules, domestic companies that have already submitted valid applications for overseas offering and listing but have not obtained approval from overseas regulatory authorities or stock exchanges may reasonably arrange the timing for submitting their filing applications with CSRC, and must complete the filing before the completion of their overseas offering and listing; (ii) a transition period until September 30, 2023 will be granted to domestic companies which have already obtained the approval from overseas regulatory authorities or stock exchanges but have not completed the indirect overseas listing prior to the effective date of the Overseas Listing Filing Rules; if domestic companies fail to complete the overseas listing prior to September 30, 2023, they shall file with CSRC according to the requirements. 48 Table of Contents Further, according to the Overseas Listing Filing Rules, for an issuer which is already listed, it should make filing in accordance with the Overseas Listing Filing Rules if: (i) it issues additional convertible bonds, exchangeable bonds or preferred shares, (ii) it issues additional securities in the same overseas market, excluding securities issued for the purpose of implementing equity incentive, distribution of stock dividends, share split, etc., (iii) it issues additional securities in several offerings within its authorized scope; or (iv) it conducts a secondary listing or primary listing in any other overseas market.
Business Overview—Regulations—Global Government Regulations;” ● complexities and difficulties in obtaining intellectual property protection and reduced protection for intellectual property rights in some countries; ● difficulties in staffing and managing global operations and the increased travel, infrastructure and le-gal compliance costs associated with multiple international locations and subsidiaries; ● conforming to foreign labor laws, regulations and restrictions; ● local business and cultural factors that differ from our normal standards and practices, including business practices that we are prohibited from engaging in by the Foreign Corrupt Practices Act and other anticorruption laws and regulations; ● establishing localized supply chains and managing international supply chain and logistics costs; ● establishing sufficient charging points for our customers in those jurisdictions, via partnerships or, if necessary, via development of our own charging networks; ● difficulties attracting customers in new jurisdictions; ● higher levels of credit risk and payment fraud; ● changes in diplomatic and trade relationships, including political risk and customer perceptions based on such changes and risks; ● disruptions of capital and trading markets and currency fluctuations; ● management of tax consequences and compliance; 31 Table of Contents ● increased costs due to imposition of climate change regulations, such as carbon taxes, fuel or energy taxes, and pollution limits; and ● other challenges caused by distance, language, and cultural differences, making it harder to do business in certain international jurisdictions.
Business Overview—Regulations—Global Government Regulations;” ● complexities and difficulties in obtaining intellectual property protection and reduced protection for intellectual property rights in some countries; ● difficulties in staffing and managing global operations and the increased travel, infrastructure and le-gal compliance costs associated with multiple international locations and subsidiaries; ● conforming to foreign labor laws, regulations and restrictions; ● local business and cultural factors that differ from our normal standards and practices, including business practices that we are prohibited from engaging in by the Foreign Corrupt Practices Act and other anticorruption laws and regulations; ● establishing localized supply chains and managing international supply chain and logistics costs; ● establishing sufficient charging points for our customers in those jurisdictions, via partnerships or, if necessary, via development of our own charging networks; ● difficulties attracting customers in new jurisdictions; ● higher levels of credit risk and payment fraud; ● changes in diplomatic and trade relationships, including political risk and customer perceptions based on such changes and risks; ● disruptions of capital and trading markets and currency fluctuations; ● management of tax consequences and compliance; ● increased costs due to imposition of climate change regulations, such as carbon taxes, fuel or energy taxes, and pollution limits; and 28 Table of Contents ● other challenges caused by distance, language, and cultural differences, making it harder to do business in certain international jurisdictions.
Moreover, even if our management concludes that our internal control over financial reporting is effective, our independent registered public accounting firm, after conducting its own independent testing, may issue a report that is qualified if it is not satisfied with our internal controls or the level at which our controls are documented, designed, operated or reviewed, or if it interprets the requirements differently from us.
Moreover, even if our management concludes that our internal control over financial reporting is effective, our independent registered public accounting firm, after conducting its own independent testing, may issue a report that is qualified if it is not satisfied with our internal controls or the level at which our controls are documented, designed, operated, or reviewed, or if it interprets the relevant requirements differently from us.
According to Circular 82, an offshore incorporated enterprise controlled by a PRC enterprise or a PRC enterprise group will be regarded as a PRC tax resident by virtue of having its “de facto management body” in China and will be subject to PRC enterprise income tax on its global income only if all of the following conditions are met: (i) the primary location of the day-to-day operational management is in China; (ii) decisions relating to the enterprise’s financial and human resource matters are made or are subject to approval by organizations or personnel in China; (iii) the enterprise’s primary assets, accounting books and records, company seals, and board and shareholder resolutions, are located or maintained in China; and (iv) at least 50% of voting board members or senior executives habitually reside in China. 59 Table of Contents We believe that none of our entities outside of China is a PRC resident enterprise for PRC tax purposes.
According to Circular 82, an offshore incorporated enterprise controlled by a PRC enterprise or a PRC enterprise group will be regarded as a PRC tax resident by virtue of having its “de facto management body” in China and will be subject to PRC enterprise income tax on its global income only if all of the following conditions are met: (i) the primary location of the day-to-day operational management is in China; (ii) decisions relating to the enterprise’s financial and human resource matters are made or are subject to approval by organizations or personnel in China; (iii) the enterprise’s primary assets, accounting books and records, company seals, and board and shareholder resolutions, are located or maintained in China; and (iv) at least 50% of voting board members or senior executives habitually reside in China. 56 Table of Contents We believe that none of our entities outside of China is a PRC resident enterprise for PRC tax purposes.
The deposit agreement governing the ADSs representing our ordinary shares provides that, subject to the depositary’s right to require a claim to be submitted to arbitration, the United States District Court for the Southern District of New York (or, if the United States District Court for the Southern District of New York lacks subject matter jurisdiction over a particular dispute, the state courts in New York County, New York) have exclusive jurisdiction to hear and determine claims arising under the deposit agreement and in that regard, to the fullest extent permitted by law, ADS holders waive the right to a jury trial of any claim they may have against us or the depositary arising out of or relating to our ordinary shares, the ADSs or the deposit agreement, including any claim under the U.S. federal securities laws. 70 Table of Contents If we or the depositary opposed a jury trial demand based on the waiver, the court would determine whether the waiver was enforceable based on the facts and circumstances of that case in accordance with the applicable state and federal law.
The deposit agreement governing the ADSs representing our ordinary shares provides that, subject to the depositary’s right to require a claim to be submitted to arbitration, the United States District Court for the Southern District of New York (or, if the United States District Court for the Southern District of New York lacks subject matter jurisdiction over a particular dispute, the state courts in New York County, New York) have exclusive jurisdiction to hear and determine claims arising under the deposit agreement and in that regard, to the fullest extent permitted by law, ADS holders waive the right to a jury trial of any claim they may have against us or the depositary arising out of or relating to our ordinary shares, the ADSs or the deposit agreement, including any claim under the U.S. federal securities laws. 67 Table of Contents If we or the depositary opposed a jury trial demand based on the waiver, the court would determine whether the waiver was enforceable based on the facts and circumstances of that case in accordance with the applicable state and federal law.
Risks that we face in undertaking this expansion include, among others: ● managing our supply chain to support fast business growth; ● maintaining our partnership with Geely Holding to manufacture our vehicles; ● managing a larger organization with a greater number of employees in different divisions; ● controlling expenses and investments in anticipation of expanded operations; ● establishing or expanding design, sales, and service facilities; ● implementing and enhancing administrative infrastructure, systems, and processes; and ● addressing new markets and potentially unforeseen challenges as they arise. 32 Table of Contents Any failure to manage our growth effectively could materially and adversely affect our business, financial condition, results of operations, and prospects.
Risks that we face in undertaking this expansion include, among others: ● managing our supply chain to support fast business growth; ● maintaining our partnership with Geely Holding to manufacture our vehicles; ● managing a larger organization with a greater number of employees in different divisions; ● controlling expenses and investments in anticipation of expanded operations; ● establishing or expanding design, sales, and service facilities; ● implementing and enhancing administrative infrastructure, systems, and processes; and ● addressing new markets and potentially unforeseen challenges as they arise. 29 Table of Contents Any failure to manage our growth effectively could materially and adversely affect our business, financial condition, results of operations, and prospects.
Unless we are able to pass on these increased labor costs to those who pay for our products and services, our profitability and results of operations may be materially and adversely affected. 56 Table of Contents In addition, we have been subject to stricter regulatory requirements in terms of entering into labor contracts with our employees, limitation with respect to utilization of labor dispatching, applying for foreigner work permits, labor protection and labor condition and paying various statutory employee benefits, including pensions, housing fund, medical insurance, work-related injury insurance, unemployment insurance and maternity insurance to designated government agencies for the benefit of our employees.
Unless we are able to pass on these increased labor costs to those who pay for our products and services, our profitability and results of operations may be materially and adversely affected. 53 Table of Contents In addition, we have been subject to stricter regulatory requirements in terms of entering into labor contracts with our employees, limitation with respect to utilization of labor dispatching, applying for foreigner work permits, labor protection and labor condition and paying various statutory employee benefits, including pensions, housing fund, medical insurance, work-related injury insurance, unemployment insurance and maternity insurance to designated government agencies for the benefit of our employees.
Any failure to obtain or any delay in obtaining CSRC approval for our listing, or a rescission of such approval may subject us to sanctions imposed by CSRC or other PRC regulatory authorities, which could include fines and penalties on our operations in China, restrictions or limitations on our ability to pay dividends outside of China, and other forms of sanctions that may materially and adversely affect our business, financial condition, and results of operations. 50 Table of Contents The PRC government has recently sought to exert more oversight and control over offerings that are conducted overseas or foreign investment in China-based issuers.
Any failure to obtain or any delay in obtaining CSRC approval for our listing, or a rescission of such approval may subject us to sanctions imposed by CSRC or other PRC regulatory authorities, which could include fines and penalties on our operations in China, restrictions or limitations on our ability to pay dividends outside of China, and other forms of sanctions that may materially and adversely affect our business, financial condition, and results of operations. 47 Table of Contents The PRC government has recently sought to exert more oversight and control over offerings that are conducted overseas or foreign investment in China-based issuers.
Failure by such shareholders or beneficial owners to comply with SAFE regulations, or failure by us to amend the foreign exchange registrations of our PRC subsidiaries, could subject us to fines or legal sanctions, restrict our overseas or cross-border investment activities, limit our PRC subsidiaries’ ability to make distributions or pay dividends to us or affect our ownership structure, which could adversely affect our business and prospects. 58 Table of Contents Any failure to comply with regulations of mainland China regarding the registration requirements for employee stock incentive plans may subject the PRC plan participants or us to fines and other legal or administrative sanctions.
Failure by such shareholders or beneficial owners to comply with SAFE regulations, or failure by us to amend the foreign exchange registrations of our PRC subsidiaries, could subject us to fines or legal sanctions, restrict our overseas or cross-border investment activities, limit our PRC subsidiaries’ ability to make distributions or pay dividends to us or affect our ownership structure, which could adversely affect our business and prospects. 55 Table of Contents Any failure to comply with regulations of mainland China regarding the registration requirements for employee stock incentive plans may subject the PRC plan participants or us to fines and other legal or administrative sanctions.
If the PRC authorities determine that we shall make supplemental social insurance and housing provident fund contributions or that we are subject to fines and legal sanctions in relation to our failure to make social insurance and housing provident fund contributions in full for our employees, our business, financial condition and results of operations may be adversely affected. 62 Table of Contents Risks Relating to Intellectual Property and Legal Proceedings We may need to defend ourselves against intellectual property right infringement, misappropriation, or other claims, which may be time-consuming and would cause us to incur substantial costs.
If the PRC authorities determine that we shall make supplemental social insurance and housing provident fund contributions or that we are subject to fines and legal sanctions in relation to our failure to make social insurance and housing provident fund contributions in full for our employees, our business, financial condition and results of operations may be adversely affected. 59 Table of Contents Risks Relating to Intellectual Property and Legal Proceedings We may need to defend ourselves against intellectual property right infringement, misappropriation, or other claims, which may be time-consuming and would cause us to incur substantial costs.
Risks Relating to Doing Business in China ● Failure to meet the PRC government’s complex regulatory requirements on and significant oversight over our business operation could result in a material adverse change in our operations and the value of our securities. ● We may be adversely affected by the complexity, uncertainties and changes in regulations of mainland China on automotive as well as internet-related businesses and companies. ● The approval of and/or filing with CSRC or other PRC government authorities may be required in connection with our offshore offerings under PRC law, and, if required, we cannot predict whether or for how long we will be able to obtain such approval or complete such filing. ● The PCAOB had historically been unable to inspect our auditor in relation to their audit work. ● Our securities may be prohibited from trading in the U.S. under the HFCAA if the PCAOB is unable to inspect or investigate completely auditors located in China.
Risks Relating to Doing Business in China ● Failure to meet the PRC government’s complex regulatory requirements on and significant oversight over our business operation could result in a material adverse change in our operations and the value of our securities. ● We may be adversely affected by the complexity, uncertainties and changes in regulations of mainland China on automotive as well as internet-related businesses and companies. 16 Table of Contents ● The approval of and/or filing with CSRC or other PRC government authorities may be required in connection with our offshore offerings under PRC law, and, if required, we cannot predict whether or for how long we will be able to obtain such approval or complete such filing. ● The PCAOB had historically been unable to inspect our auditor in relation to their audit work. ● Our securities may be prohibited from trading in the U.S. under the HFCAA if the PCAOB is unable to inspect or investigate completely auditors located in China.
Our continued development, manufacturing, and delivery of high quality automobiles to achieve our targeted production volume are and will be subject to risks, including with respect to: ● delays in our EV technology development; ● lack of necessary funding; ● delays or disruptions in our supply chain; ● quality control deficiencies; ● inability to adapt to changing market conditions and manage growth effectively; ● incompliance with environmental, workplace safety, and regulations; and ● cost overruns. 23 Table of Contents Historically, automakers are expected to periodically introduce new and improved models to stay abreast of the market.
Our continued development, manufacturing, and delivery of high quality automobiles to achieve our targeted production volume are and will be subject to risks, including with respect to: ● delays in our EV technology development; ● lack of necessary funding; ● delays or disruptions in our supply chain; ● quality control deficiencies; ● inability to adapt to changing market conditions and manage growth effectively; ● incompliance with environmental, workplace safety, and regulations; and ● cost overruns. 20 Table of Contents Historically, automakers are expected to periodically introduce new and improved models to stay abreast of the market.
Changes in business conditions, pandemics, governmental changes, and other factors beyond our control or that we do not presently anticipate could affect our ability to receive components or technology from our suppliers. 29 Table of Contents Further, we rely on Geely Holding’s bargaining power derived from its volume and reputation in negotiating supply agreements for the production of our vehicles and we may be at a disadvantage due to our limited operating history as a standalone business.
Changes in business conditions, pandemics, governmental changes, and other factors beyond our control or that we do not presently anticipate could affect our ability to receive components or technology from our suppliers. 26 Table of Contents Further, we rely on Geely Holding’s bargaining power derived from its volume and reputation in negotiating supply agreements for the production of our vehicles and we may be at a disadvantage due to our limited operating history as a standalone business.
These laws and regulations of mainland China may significantly limit our ability to use RMB converted from the net proceeds of any financing outside China to fund the establishment of new entities in China by our PRC subsidiaries, to invest in or acquire any other PRC companies through our PRC subsidiaries. 55 Table of Contents We may rely on dividends and other distributions on equity paid by our PRC subsidiaries to fund any cash and financing requirements we may have, and any limitation on the ability of our PRC subsidiaries to make payments to us could have a material and adverse effect on our ability to conduct our business.
These laws and regulations of mainland China may significantly limit our ability to use RMB converted from the net proceeds of any financing outside China to fund the establishment of new entities in China by our PRC subsidiaries, to invest in or acquire any other PRC companies through our PRC subsidiaries. 52 Table of Contents We may rely on dividends and other distributions on equity paid by our PRC subsidiaries to fund any cash and financing requirements we may have, and any limitation on the ability of our PRC subsidiaries to make payments to us could have a material and adverse effect on our ability to conduct our business.
As a result, you may not be provided with the benefits of certain corporate governance requirements of Nasdaq applicable to companies that are subject to these corporate governance requirements. 74 Table of Contents You may face difficulties in protecting your interests, and your ability to protect your rights through U.S. courts may be limited, because we are incorporated under the laws of the Cayman Islands, and we conduct a substantial portion of our operations, and a majority of our directors and executive officers reside, outside of the U.S.
As a result, you may not be provided with the benefits of certain corporate governance requirements of Nasdaq applicable to companies that are subject to these corporate governance requirements. 71 Table of Contents You may face difficulties in protecting your interests, and your ability to protect your rights through U.S. courts may be limited, because we are incorporated under the laws of the Cayman Islands, and we conduct a substantial portion of our operations, and a majority of our directors and executive officers reside, outside of the U.S.
We may not generate sufficient revenues and may incur substantial losses for a number of reasons, including lack of demand for our vehicles, increasing competition, and other risks discussed herein, and we may incur unforeseen expenses, or encounter difficulties, complications, or delays in deriving revenues or achieving profitability. 24 Table of Contents We have received a limited number of orders for our vehicles, some of which may be cancelled by customers despite their deposit payment and online confirmation.
We may not generate sufficient revenues and may incur substantial losses for a number of reasons, including lack of demand for our vehicles, increasing competition, and other risks discussed herein, and we may incur unforeseen expenses, or encounter difficulties, complications, or delays in deriving revenues or achieving profitability. 21 Table of Contents We have received a limited number of orders for our vehicles, some of which may be cancelled by customers despite their deposit payment and online confirmation.
These laws, regulations and standards may be interpreted and applied differently over time and from jurisdiction to jurisdiction, and it is possible that they will be interpreted and applied in ways that may have a material and adverse impact on our business, financial condition and results of operations. 37 Table of Contents The global data protection landscape is rapidly evolving, and implementation standards and enforcement practices are likely to remain uncertain for the foreseeable future.
These laws, regulations and standards may be interpreted and applied differently over time and from jurisdiction to jurisdiction, and it is possible that they will be interpreted and applied in ways that may have a material and adverse impact on our business, financial condition and results of operations. 34 Table of Contents The global data protection landscape is rapidly evolving, and implementation standards and enforcement practices are likely to remain uncertain for the foreseeable future.
We expect these laws and regulations to increase our legal and financial compliance costs and to render some activities more time-consuming and costly, although we are currently unable to estimate these costs with any degree of certainty. 72 Table of Contents Many members of our management team will have limited experience managing a publicly traded company, interacting with public company investors and complying with the increasingly complex laws pertaining to public companies.
We expect these laws and regulations to increase our legal and financial compliance costs and to render some activities more time-consuming and costly, although we are currently unable to estimate these costs with any degree of certainty. 69 Table of Contents Many members of our management team will have limited experience managing a publicly traded company, interacting with public company investors and complying with the increasingly complex laws pertaining to public companies.
A decrease in potential customers’ disposable income or their financial flexibility, an increase in the overall cost of financing or consumer concerns about the social perception of purchasing luxury products will therefore generally have a negative impact on demand for the our vehicles. 26 Table of Contents Demand for our luxury BEVs will also highly depend upon the adoption by consumers of new energy vehicles in general and electric vehicles in particular.
A decrease in potential customers’ disposable income or their financial flexibility, an increase in the overall cost of financing or consumer concerns about the social perception of purchasing luxury products will therefore generally have a negative impact on demand for our vehicles. 23 Table of Contents Demand for our luxury BEVs will also highly depend upon the adoption by consumers of new energy vehicles in general and electric vehicles in particular.
If we fail to find alternative suppliers in time, or at all, our production and deliveries could be materially disrupted, which may materially and adversely affect our business, results of operations, and financial condition. 30 Table of Contents We plan to expand our business and operations internationally to various jurisdictions in which we do not currently operate and where we have limited operating experience, all of which exposes us to business, regulatory, political, operational and financial risk.
If we fail to find alternative suppliers in time, or at all, our production and deliveries could be materially disrupted, which may materially and adversely affect our business, results of operations, and financial condition. 27 Table of Contents We plan to expand our business and operations internationally to various jurisdictions in which we do not currently operate and where we have limited operating experience, all of which exposes us to business, regulatory, political, operational and financial risk.
As a result, fluctuations in exchange rates may have a material adverse effect on your investment. 57 Table of Contents Moreover, certain monetary amounts described in this annual report have been expressed in U.S. dollars for convenience only and, when expressed in U.S. dollars in the future, such amounts may be different from those set forth herein due to intervening exchange rate fluctuations.
As a result, fluctuations in exchange rates may have a material adverse effect on your investment. 54 Table of Contents Moreover, certain monetary amounts described in this annual report have been expressed in U.S. dollars for convenience only and, when expressed in U.S. dollars in the future, such amounts may be different from those set forth herein due to intervening exchange rate fluctuations.
If we inadvertently use these trademarks in China, we might be subject to litigation or claims, which could result in substantial costs, negative publicity, and diversion of resources and management attention. 65 Table of Contents We may not be able to obtain, protect or enforce our rights to these trademarks and trade names, which we need to build name recognition among potential partners or customers in our markets of interest.
If we inadvertently use these trademarks in China, we might be subject to litigation or claims, which could result in substantial costs, negative publicity, and diversion of resources and management attention. 62 Table of Contents We may not be able to obtain, protect or enforce our rights to these trademarks and trade names, which we need to build name recognition among potential partners or customers in our markets of interest.
If some investors find our ADSs less attractive as a result, there may be a less active trading market and price for our ADSs may be more volatile. 73 Table of Contents We qualify as a foreign private issuer within the meaning of the rules under the Exchange Act, and as such we are exempt from certain provisions applicable to U.S. domestic public companies.
If some investors find our ADSs less attractive as a result, there may be a less active trading market and price for our ADSs may be more volatile. 70 Table of Contents We qualify as a foreign private issuer within the meaning of the rules under the Exchange Act, and as such we are exempt from certain provisions applicable to U.S. domestic public companies.
Risk Factors—Risks Relating to Doing Business in China—Regulation of loans to and direct investment in PRC entities by offshore holding companies and governmental control of currency conversion may delay or prevent us from making loans to or make additional capital contributions to our PRC subsidiaries, which could materially and adversely affect our liquidity and our ability to fund and expand our business,” and “Item 3.
Risk Factors—Risks Relating to Doing Business in China—Regulation of loans to and direct investment in PRC entities by offshore holding companies and governmental control of currency conversion may delay or prevent us from making loans to or make additional capital contributions to our PRC subsidiaries, which could materially and adversely affect our liquidity and our ability to fund and expand our business” and “Item 3.
Any of the foregoing could materially and adversely affect our brand image, financial condition, results of operations, and growth prospects. 28 Table of Contents In addition, ADAS technology is subject to considerable international regulatory uncertainty as the laws in different jurisdictions we operate evolve to catch up with the rapidly evolving nature of the technology itself, all of which is beyond our control.
Any of the foregoing could materially and adversely affect our brand image, financial condition, results of operations, and growth prospects. 25 Table of Contents In addition, ADAS technology is subject to considerable international regulatory uncertainty as the laws in different jurisdictions we operate evolve to catch up with the rapidly evolving nature of the technology itself, all of which is beyond our control.
We also expect our period-to-period results of operations to vary based on our operating costs, which we anticipate will increase significantly in future periods as we, among other things, design and develop our BEVs and new models and have them manufactured, build and equip new manufacturing facilities to produce such components, open new retail stores and delivery centers, increase our sales and marketing activities, and increase our general and administrative functions to support our growing operations. 39 Table of Contents As a result of these factors, we believe that period-to-period comparisons of our results of operations are not necessarily meaningful and that these comparisons cannot be relied upon as indicators of future performance.
We also expect our period-to-period results of operations to vary based on our operating costs, which we anticipate will increase significantly in future periods as we, among other things, design and develop new models and have them manufactured, build and equip new manufacturing facilities to produce such components, open new retail stores and delivery centers, increase our sales and marketing activities, and increase our general and administrative functions to support our growing operations. 36 Table of Contents As a result of these factors, we believe that period-to-period comparisons of our results of operations are not necessarily meaningful and that these comparisons cannot be relied upon as indicators of future performance.
If the market for luxury electric vehicles does not develop as we expect or develops more slowly than we expect, our business, prospects, financial condition, and operating results will be affected. 27 Table of Contents Our sales depend in part on our ability to establish and maintain confidence in our business prospects among consumers, analysts and others within our industry.
If the market for luxury electric vehicles does not develop as we expect or develops more slowly than we expect, our business, prospects, financial condition, and operating results will be affected. 24 Table of Contents Our sales depend in part on our ability to establish and maintain confidence in our business prospects among consumers, analysts and others within our industry.
We cannot assure you that suitable alternative locations are readily available on commercially reasonable terms, or at all, and if we are unable to relocate our operations in a timely manner, our operations may be adversely affected. 61 Table of Contents We are subject to regulations of mainland China regarding cybersecurity, privacy, data protection and information security.
We cannot assure you that suitable alternative locations are readily available on commercially reasonable terms, or at all, and if we are unable to relocate our operations in a timely manner, our operations may be adversely affected. 58 Table of Contents We are subject to regulations of mainland China regarding cybersecurity, privacy, data protection and information security.
While we continually seek to expand and improve our information technology systems and maintain adequate disclosure controls and procedures, we cannot assure you that such measures will prevent interruptions or security breaches that could adversely affect our business. 66 Table of Contents We use open source software, which may pose particular risks to our proprietary software and source code.
While we continually seek to expand and improve our information technology systems and maintain adequate disclosure controls and procedures, we cannot assure you that such measures will prevent interruptions or security breaches that could adversely affect our business. 63 Table of Contents We use open source software, which may pose particular risks to our proprietary software and source code.
Under the circumstances that we decide to make an amendment to the deposit agreement that is disadvantageous to ADS holders or terminate the deposit agreement, the ADS holders may choose to sell their ADSs or surrender their ADSs and become direct holders of the underlying Ordinary Shares, but will have no right to any compensation whatsoever. 69 Table of Contents Holders of our ADSs may be subject to limitations on transfer of their ADSs.
Under the circumstances that we decide to make an amendment to the deposit agreement that is disadvantageous to ADS holders or terminate the deposit agreement, the ADS holders may choose to sell their ADSs or surrender their ADSs and become direct holders of the underlying Ordinary Shares, but will have no right to any compensation whatsoever. 66 Table of Contents Holders of our ADSs may be subject to limitations on transfer of their ADSs.
There is no guarantee that the our ADSs will appreciate in value or that the market price of the our ADSs will not decline. 75 Table of Contents There can be no assurance that we will not be treated as a passive foreign investment company, or PFIC, for any taxable year, which could result in adverse U.S. federal income tax consequences to U.S.
There is no guarantee that our ADSs will appreciate in value or that the market price of our ADSs will not decline. 72 Table of Contents There can be no assurance that we will not be treated as a passive foreign investment company, or PFIC, for any taxable year, which could result in adverse U.S. federal income tax consequences to U.S.
For this reason, we do not expect to be so identified after we file this annual report on Form 20-F for the fiscal year ended December 31, 2023. Each year, the PCAOB will determine whether it can inspect and investigate completely audit firms in mainland China and Hong Kong, among other jurisdictions.
For this reason, we do not expect to be so identified after we file this annual report on Form 20-F for the fiscal year ended December 31, 2024. Each year, the PCAOB will determine whether it can inspect and investigate completely audit firms in mainland China and Hong Kong, among other jurisdictions.
The number of Warrants outstanding is equal to approximately 2.2% of our currently outstanding Ordinary Shares. The exercise price of the Warrants is US$11.50 per share, subject to adjustment.
The number of Warrants outstanding is equal to approximately 2.1% of our currently outstanding Ordinary Shares. The exercise price of the Warrants is US$11.50 per share, subject to adjustment.
Circular 37 further clarifies the practice and procedure of the withholding of nonresident enterprise income tax. 60 Table of Contents We face uncertainties on the reporting and consequences of future private equity financing transactions, share exchanges or other transactions involving the transfer of shares in our company by investors that are non-PRC resident enterprises.
Circular 37 further clarifies the practice and procedure of the withholding of nonresident enterprise income tax. 57 Table of Contents We face uncertainties on the reporting and consequences of future private equity financing transactions, share exchanges or other transactions involving the transfer of shares in our company by investors that are non-PRC resident enterprises.
Risk Factors—Risks Relating to Doing Business in China—We may rely on dividends and other distributions on equity paid by our PRC subsidiaries to fund any cash and financing requirements we may have, and any limitation on the ability of our PRC subsidiaries to make payments to us could have a material and adverse effect on our ability to conduct our business” and “Item 3.
Risk Factors—Risks Relating to Doing Business in China—We may rely on dividends and other distributions on equity paid by our PRC subsidiaries to fund any cash and financing requirements we may have, and any limitation on the ability of our PRC subsidiaries to make payments to us could have a material and adverse effect on our ability to conduct our business,” “Item 3.
The sustainability of our business depends, in large part, on our ability to timely execute our plan to develop, manufacture, and deliver on a large scale automobiles of high quality and appeal to customers. We have entered into an agreement with Geely Holding to manufacture our new BEV lifestyle models for the global market using the Wuhan manufacturing facility.
The sustainability of our business depends, in large part, on our ability to timely execute our plan to develop, manufacture, and deliver on a large scale automobiles of high quality and appeal to customers. We have entered into an agreement with Geely Holding to manufacture our new models for the global market using the Wuhan manufacturing facility.
Such actions could also expose us to negative publicity and to substantial monetary damages and legal defense costs, injunctive relief, and criminal, civil, and administrative fines and penalties. 43 Table of Contents Our revenues and financial results may be adversely affected by economic slowdown globally and in any jurisdictions we operate.
Such actions could also expose us to negative publicity and to substantial monetary damages and legal defense costs, injunctive relief, and criminal, civil, and administrative fines and penalties. 40 Table of Contents Our revenues and financial results may be adversely affected by economic slowdown globally and in any jurisdictions we operate.
However, since the 2019 PRC Foreign Investment Law and its Implementation Rules are relatively new, substantial uncertainties exist with respect to their interpretations and implementations. 54 Table of Contents The 2019 PRC Foreign Investment Law specifies that foreign investments shall be conducted in line with the “negative list” to be issued by or approved to be issued by the State Council.
However, since the 2019 PRC Foreign Investment Law and its Implementation Rules are relatively new, substantial uncertainties exist with respect to their interpretations and implementations. 51 Table of Contents The 2019 PRC Foreign Investment Law specifies that foreign investments shall be conducted in line with the “negative list” to be issued by or approved to be issued by the State Council.
In addition, our products and services are highly technical and complex and may contain errors or vulnerabilities, which could result in interruptions in our services or the failure of our systems. 42 Table of Contents The construction and operation of our headquarters in Wuhan is subject to regulatory approvals and may be subject to delays, cost overruns or may not produce expected benefits.
In addition, our products and services are highly technical and complex and may contain errors or vulnerabilities, which could result in interruptions in our services or the failure of our systems. 39 Table of Contents The construction and operation of our headquarters in Wuhan is subject to regulatory approvals and may be subject to delays, cost overruns or may not produce expected benefits.
For more details, see “—Risks Relating to Our Business and Industry—We are dependent on our suppliers, many of whom are our single source suppliers for the components they supply” and “—Risks Relating to Our Business and Industry—We could experience cost increases or disruptions in supply of raw materials or other components used in our vehicles.” 21 Table of Contents We may not succeed in continuing to maintain and strengthen our brand, and our brand and reputation could be harmed by negative publicity with respect to us, our directors, officers, employees, shareholders, peers, business partners, or our industry in general.
For more details, see “—Risks Relating to Our Business and Industry—We are dependent on our suppliers, many of whom are our single source suppliers for the components they supply” and “—Risks Relating to Our Business and Industry—We could experience cost increases or disruptions in supply of raw materials or other components used in our vehicles.” We may not succeed in continuing to maintain and strengthen our brand, and our brand and reputation could be harmed by negative publicity with respect to us, our directors, officers, employees, shareholders, peers, business partners, or our industry in general.
However, we cannot guarantee that our vehicles will achieve its targeted assisted or intelligent driving functionality within its projected timeframe, or ever. In addition, intelligent driving as an evolving and complex technology is subject to risks, and from time to time there have been accidents associated with such technology.
However, we cannot guarantee that our vehicles will achieve its targeted assisted or intelligent driving functionality within the projected timeframe, if ever. In addition, intelligent driving as an evolving and complex technology is subject to risks, and from time to time there have been accidents associated with such technology.
Risks Relating to Intellectual Property and Legal Proceedings ● We may need to defend ourselves against intellectual property right infringement, misappropriation, or other claims, which may be time-consuming and would cause us to incur substantial costs. 19 Table of Contents ● We may not be able to prevent others from unauthorized use of our intellectual property, which could harm our business and competitive position. ● As our patents may expire and may not be extended, our patent applications may not be granted, and our patent rights may be contested, circumvented, invalidated, or limited in scope, our patent rights may not protect us effectively.
Risks Relating to Intellectual Property and Legal Proceedings ● We may need to defend ourselves against intellectual property right infringement, misappropriation, or other claims, which may be time-consuming and would cause us to incur substantial costs. ● We may not be able to prevent others from unauthorized use of our intellectual property, which could harm our business and competitive position. ● As our patents may expire and may not be extended, our patent applications may not be granted, and our patent rights may be contested, circumvented, invalidated, or limited in scope, our patent rights may not protect us effectively.
Furthermore, qualifying alternate suppliers or developing our own replacements for certain highly customized components of our existing and future vehicles may be time consuming and costly. A recent supply chain disruption related to certain EV components could expose us to delayed deliveries and component shortages in 2024.
Furthermore, qualifying alternate suppliers or developing our own replacements for certain highly customized components of our existing and future vehicles may be time consuming and costly. A recent supply chain disruption related to certain EV components could expose us to delayed deliveries and component shortages in 2025.
Any failure to obtain or maintain patent and other intellectual property protection with respect to our products could harm our business, financial condition, and results of operations. 64 Table of Contents In addition to patented technologies, we rely on our unpatented proprietary technologies, trade secrets, processes, and know-how.
Any failure to obtain or maintain patent and other intellectual property protection with respect to our products could harm our business, financial condition, and results of operations. 61 Table of Contents In addition to patented technologies, we rely on our unpatented proprietary technologies, trade secrets, processes, and know-how.
If we or any of our current or future licensors fail to adequately protect these trademarks, our ability to commercialize our products could suffer. 22 Table of Contents Our reputation and brand are vulnerable to many threats that can be difficult or impossible to predict, control, and costly or impossible to remediate.
If we or any of our current or future licensors fail to adequately protect these trademarks, our ability to commercialize our products could suffer. 19 Table of Contents Our reputation and brand are vulnerable to many threats that can be difficult or impossible to predict, control, and costly or impossible to remediate.
We have incurred, and expect to continue to incur, significant costs in complying with these regulations. 25 Table of Contents In the EU, vehicles must be type-approved under EU Regulation 2018/858, or the Whole Vehicle Type Approval, and must comply with vehicles safety standard under EU Regulation 2019/2144.
We have incurred, and expect to continue to incur, significant costs in complying with these regulations. 22 Table of Contents In the EU, vehicles must be type-approved under EU Regulation 2018/858, or the Whole Vehicle Type Approval, and must comply with vehicles safety standard under EU Regulation 2019/2144.
As a result, our expenses associated with share-based compensation may increase, which may have an adverse effect on our results of operations. Furthermore, perspective candidates and existing employees often consider the value of the equity awards they receive in connection with their employment.
As a result, our expenses associated with share-based compensation may increase, which may have an adverse effect on our results of operations. Furthermore, prospective candidates and existing employees often consider the value of the equity awards they receive in connection with their employment.
Our growth depends significantly on the availability and extent of government subsidies, economic incentives, and government policies that support the growth of new energy vehicles. 38 Table of Contents Our vehicles benefit from government incentives for electric vehicles in the EU, the U.K., and the U.S., see “Item 4. Information on the Company—B.
Our growth depends significantly on the availability and extent of government subsidies, economic incentives, and government policies that support the growth of new energy vehicles. 35 Table of Contents Our vehicles benefit from government incentives for electric vehicles in the EU, the U.K., and the U.S., see “Item 4. Information on the Company—B.
For the years ended December 31, 2023, 2022 and 2021, the WFOE collected advances of nil, US$10.6 million and nil from the former VIE. For the years ended December 31, 2023, 2022 and 2021, US$1.7 million, US$3.3 million and nil of service fees were paid by the former VIE and its subsidiaries to the subsidiaries of Lotus Technology Inc.
For the years ended December 31, 2024, 2023 and 2022, the WFOE collected advances of nil, nil and US$10.6 million from the former VIE. For the years ended December 31, 2024, 2023 and 2022, nil, US$1.7 million and US$3.3 million of service fees were paid by the former VIE and its subsidiaries to the subsidiaries of Lotus Technology Inc.
From time to time, we may have to resort to litigation to enforce our intellectual property rights, which could result in substantial costs and diversion of our resources. 63 Table of Contents We may not be able to adequately obtain or maintain our proprietary and intellectual property rights in our data or technology.
From time to time, we may have to resort to litigation to enforce our intellectual property rights, which could result in substantial costs and diversion of our resources. 60 Table of Contents We may not be able to adequately obtain or maintain our proprietary and intellectual property rights in our data or technology.
The put options are exercisable during the period from April 1, 2025 to June 30, 2025 upon satisfaction of the condition that the total number of vehicles sold by Lotus Advance Technologies Sdn Bhd and its subsidiaries exceeds 5,000 in 2024 (with the exercise of such options by Geely HK and Etika not cross-conditioned on one another).
The put options are exercisable during the period from April 1, 2025 to June 30, 2025 upon satisfaction of the condition, or the LAT Put Option Exercise Condition, that the total number of vehicles sold by Lotus Advance Technologies Sdn Bhd and its subsidiaries exceeds 5,000 in 2024 (with the exercise of such options by Geely HK and Etika not cross-conditioned on one another).
If we fail to achieve and maintain an effective internal control environment, we could suffer material misstatements in our financial statements and fail to meet our reporting obligations, which would likely cause investors to lose confidence in our reported financial information.
Generally speaking, if we fail to achieve and maintain an effective internal control environment, we could suffer material misstatements in our financial statements and fail to meet our reporting obligations, which would likely cause investors to lose confidence in our reported financial information.
Accordingly, our business, prospects, financial condition, and results of operations may be influenced to a significant degree by political, economic, and social conditions in China generally. 48 Table of Contents The Chinese economy differs from the economies of most developed countries in many respects, including the degree of government involvement, level of development, growth rate, control of foreign exchange and allocation of resources.
Accordingly, our business, prospects, financial condition, and results of operations may be influenced to a significant degree by political, economic, and social conditions in China generally. The Chinese economy differs from the economies of most developed countries in many respects, including the degree of government involvement, level of development, growth rate, control of foreign exchange and allocation of resources.
Any business disruption event could result in substantial cost to us and diversion of our resources. 40 Table of Contents We are or may be subject to risks associated with strategic alliances or acquisitions.
Any business disruption event could result in substantial cost to us and diversion of our resources. 37 Table of Contents We are or may be subject to risks associated with strategic alliances or acquisitions.
Any such failure would further reduce the funds available to us, which could adversely affect our ability to continue operations. Risks Relating to Doing Business in China Failure to meet the PRC government’s complex regulatory requirements on and significant oversight over our business operation could result in a material adverse change in our operations and the value of our securities.
Any such failure would further reduce the funds available to us, which could adversely affect our ability to continue operations. 45 Table of Contents Risks Relating to Doing Business in China Failure to meet the PRC government’s complex regulatory requirements on and significant oversight over our business operation could result in a material adverse change in our operations and the value of our securities.
None of our PRC subsidiaries or affiliates are currently subject to foreign investment restrictions as set forth in the presently effective Special Administrative Measures for Entry of Foreign Investment (Negative List) (2021 Version), or the 2021 Negative List.
None of our PRC subsidiaries or affiliates are currently subject to foreign investment restrictions as set forth in the presently effective Special Administrative Measures for Entry of Foreign Investment (Negative List) (2024 Version), or the 2024 Negative List.
Based on our assets and income, we do not believe that we were a PFIC for our taxable year ended December 31, 2023 and do not expect to be a PFIC for the current taxable year or foreseeable future taxable years.
Based on our assets and income, we do not believe that we were a PFIC for our taxable year ended December 31, 2024 and do not expect to be a PFIC for the current taxable year or foreseeable future taxable years.
Any such issuances of additional share capital may cause shareholders to experience significant dilution of their ownership interests and the per ADS value of our ADSs to decline. 68 Table of Contents Holders of our ADSs may not have the same voting rights as our registered shareholders and might not receive voting materials in time to be able to exercise their right to vote.
Any such issuances of additional share capital may cause shareholders to experience significant dilution of their ownership interests and the per ADS value of our ADSs to decline. Holders of our ADSs may not have the same voting rights as our registered shareholders and might not receive voting materials in time to be able to exercise their right to vote.
Business Overview—Regulations—PRC Government Regulations—Regulations on Intelligent Connected Vehicles and Autonomous Driving.” Intelligent driving laws and regulations are expected to continue to evolve in numerous jurisdictions globally, which increases the likelihood of a patchwork of complex or conflicting regulations that may delay products or restrict intelligent driving features and availability, which could adversely affect our business.
Business Overview—Regulations—PRC Government Regulations—Regulations on Intelligent Connected Vehicles and Autonomous Driving.” Intelligent driving laws and regulations are expected to continue to evolve globally, which increases the likelihood of a patchwork of complex or conflicting regulations that may delay products or restrict intelligent driving features and availability, which could adversely affect our business.
For this reason, we do not expect to be so identified after we file this annual report on Form 20-F for the fiscal year ended December 31, 2023. 53 Table of Contents Each year, the PCAOB will determine whether it can inspect and investigate completely audit firms in mainland China and Hong Kong, among other jurisdictions.
For this reason, we do not expect to be so identified after we file this annual report on Form 20-F for the fiscal year ended December 31, 2024. 50 Table of Contents Each year, the PCAOB will determine whether it can inspect and investigate completely audit firms in mainland China and Hong Kong, among other jurisdictions.
We are unable to predict the effect that such sales may have on the prevailing market price of our securities. The trading prices of our ADSs and Warrants may be volatile and a market for our ADSs may not develop, which would adversely affect the liquidity and price of our ADSs .
We are unable to predict the effect that such sales may have on the prevailing market price of our securities. 64 Table of Contents The trading prices of our ADSs and Warrants may be volatile and a market for our ADSs may not develop, which would adversely affect the liquidity and price of our ADSs .
One of our key business strategies is to pursue international expansion of our business operations and market our products in multiple jurisdictions, and the global nature of our business could have a material adverse effect on our business, financial condition, and results of operations.
We conduct our business worldwide. One of our key business strategies is to pursue international expansion of our business operations and market our products in multiple jurisdictions, and the global nature of our business could have a material adverse effect on our business, financial condition, and results of operations.
You may be unable to sell your ADSs unless a market can be established and sustained. 67 Table of Contents The trading prices of our ADSs and Warrants may be volatile and may fluctuate due to a variety of factors, some of which are beyond our control, including, but not limited to: ● actual or anticipated fluctuations in our financial condition or results of operations; ● variance in our financial performance from expectations of securities analysts; ● changes in our projected operating and financial results; ● changes in laws and regulations affecting our business, our customers, suppliers, or our industry; ● announcements of new services and expansions by us or our competitors; ● our ability to continue to innovate and bring products to market in a timely manner; ● our involvement in actual or potential litigation or regulatory investigations; ● negative publicity about us, our products or our industry; ● changes in our senior management or key personnel; ● announcements of new investments, acquisitions, strategic partnerships, or joint ventures by us or our competitors; ● sales of our securities by us, our shareholders or our warrant holders, as well as the anticipation of lockup releases; ● general economic, political, regulatory, industry, and market conditions; ● natural disasters or major catastrophic events; and ● other events or factors, including those resulting from war, incidents of terrorism, natural disasters, pandemics or responses to these events.
The trading prices of our ADSs and Warrants may be volatile and may fluctuate due to a variety of factors, some of which are beyond our control, including, but not limited to: ● actual or anticipated fluctuations in our financial condition or results of operations; ● variance in our financial performance from expectations of securities analysts; ● changes in our projected operating and financial results; ● changes in laws and regulations affecting our business, our customers, suppliers, or our industry; ● announcements of new services and expansions by us or our competitors; ● our ability to continue to innovate and bring products to market in a timely manner; ● our involvement in actual or potential litigation or regulatory investigations; ● negative publicity about us, our products or our industry; ● changes in our senior management or key personnel; ● announcements of new investments, acquisitions, strategic partnerships, or joint ventures by us or our competitors; ● sales of our securities by us, our shareholders or our warrant holders, as well as the anticipation of lockup releases; ● general economic, political, regulatory, industry, and market conditions; ● natural disasters or major catastrophic events; and ● other events or factors, including those resulting from war, incidents of terrorism, natural disasters, pandemics or responses to these events.
During the course of documenting and testing our internal control procedures, in order to satisfy the requirements of Section 404, we may identify other weaknesses and deficiencies in our internal control over financial reporting.
During the course of documenting and testing our internal control procedures, in order to satisfy the requirements of Section 404, we may identify other or more material weaknesses or deficiencies in our internal control over financial reporting.
Pursuant to the Circular on the Reforming of the Management Method of the Settlement of Foreign Currency Capital of Foreign-Invested Enterprises, or SAFE Circular 19, which became effective on June 1, 2015 and was last amended on December 30, 2019, and the Circular of the State Administration of Foreign Exchange on Reforming and Regulating Policies on the Control over Foreign Exchange Settlement of Capital Accounts, or SAFE Circular 16, which was promulgated in June 2016, foreign-invested enterprises may either continue to follow the current payment-based foreign currency settlement system or choose to follow the “conversion-at-will” system for foreign currency settlement.
Pursuant to the Circular on the Reforming of the Management Method of the Settlement of Foreign Currency Capital of Foreign-Invested Enterprises, or SAFE Circular 19, which became effective on June 1, 2015 and was last amended on March 23, 2023, and the Circular of the State Administration of Foreign Exchange on Reforming and Regulating Policies on the Control over Foreign Exchange Settlement of Capital Accounts, or SAFE Circular 16, which was promulgated in June 2016 and was last amended on December 4, 2023, foreign-invested enterprises may either continue to follow the current payment-based foreign currency settlement system or choose to follow the “conversion-at-will” system for foreign currency settlement.
Discontinuation of any of the preferential tax treatments and government subsidies or imposition of any additional taxes and surcharges could adversely affect our financial condition and results of operations. Our PRC subsidiaries have received various financial subsidies from PRC local government authorities. In 2023, 2022 and 2021, we recorded government grants of US$4.1 million, US$55.8 million and US$490.7 million, respectively.
Discontinuation of any of the preferential tax treatments and government subsidies or imposition of any additional taxes and surcharges could adversely affect our financial condition and results of operations. Our PRC subsidiaries have received various financial subsidies from PRC local government authorities. In 2024, 2023 and 2022, we recorded government grants of US$8.6 million, US$4.1 million and US$55.8 million, respectively.
We cannot assure you that we will be able to detect and fix any defects in the vehicles we design and produce on a timely basis, or at all. In addition, we have limited operating history in testing, delivering, and servicing our vehicles.
We cannot assure you that we will be able to detect and fix any defects in the vehicles we design and produce on a timely basis, or at all. 31 Table of Contents In addition, we have limited operating history in testing, delivering, and servicing our vehicles.
In each case, we may only call the Warrants for redemption upon a minimum of 30 days’ prior notice of redemption. 71 Table of Contents Redemption of the outstanding Warrants could force you (i) to exercise your Warrants and pay the exercise price therefor at a time when it may be disadvantageous for you to do so, (ii) to sell your Warrants at the then-current market price when you might otherwise wish to hold your Warrants, or (iii) to accept the nominal redemption price, which, at the time the outstanding Warrants are called for redemption, is likely to be substantially less than the market value of your Warrants.
In each case, we may only call the Warrants for redemption upon a minimum of 30 days’ prior notice of redemption. 68 Table of Contents Redemption of the outstanding Warrants could force the warrantholders (i) to exercise their Warrants and pay the exercise price therefor at a time when it may be disadvantageous for such warrantholders to do so, (ii) to sell the Warrants at the then-current market price when the warrantholders might otherwise wish to hold their Warrants, or (iii) to accept the nominal redemption price, which, at the time the outstanding Warrants are called for redemption, is likely to be substantially less than the market value of the Warrants.
For the years ended December 31, 2023, 2022 and 2021, Lotus Technology Inc. provided loans with principal amount of US$231.6 million, US$5.9 million and nil to its subsidiaries, and made capital contribution of US$302.3 million, US$94.7 million and nil to its subsidiaries.
For the years ended December 31, 2024, 2023 and 2022, Lotus Technology Inc. provided loans with principal amount of US$94.6 million, US$231.6 million and US$5.9 million to its subsidiaries, and made capital contribution of US$915.6 million, US$302.3 million and US$94.7 million to its subsidiaries.

… 195 more changes not shown on this page.

Item 4. Mine Safety Disclosures

Mine Safety Disclosures — required of mining issuers

119 edited+45 added−38 removed442 unchanged
Biggest changeUnder the Administrative Regulations on Compulsory Product Certification, which took effect on November 1, 2022, the List of the First Batch of Products Subject to Compulsory Product Certification, which took effect on December 3, 2001, and the Compulsory Product Certification Catalogue Description and Definition Form, which was last amended on August 10, 2023, the State Administration for Market Regulation is responsible for the regulation and quality certification, and vehicle wireless terminal and vehicle wireless module cannot be delivered, sold, imported, or used in operating activities until certified by designated PRC certification authorities as qualified products and granted certification marks, otherwise the violator shall be ordered to make correction and be imposed with a fine ranging from RMB50,000 to RMB200,000 and the illegal income shall be confiscated.
Biggest changeUnder the Administrative Regulations on Compulsory Product Certification, which took effect on November 1, 2022, the List of the First Batch of Products Subject to Compulsory Product Certification, which took effect on December 3, 2001, and the Compulsory Product Certification Catalogue Description and Definition Form, which was last amended on August 10, 2023, the State Administration for Market Regulation is responsible for the regulation and quality certification, and vehicle wireless terminal and vehicle wireless module cannot be delivered, sold, imported, or used in operating activities until certified by designated PRC certification authorities as qualified products and granted certification marks, otherwise the violator shall be ordered to make correction and be imposed with a fine ranging from RMB50,000 to RMB200,000 and the illegal income shall be confiscated. 88 Table of Contents Regulations on Intelligent Connected Vehicles and Autonomous Driving On July 27, 2021, the Ministry of Industry and Information Technology, the Ministry of Public Security and the Ministry of Transport, jointly issued the Good Practices for the Administration of Road Test and Demonstration Application of Intelligent Connected Vehicles (for Trial Implementation), or Circular 97, which became effective on September 1, 2021, and is the primary regulation governing road tests and demonstrations of intelligent connected vehicles in China.
Through a series of steps, including transferring the assets and employees in the Lotus BEV business unit of Ningbo Geely R&D into Wuhan Lotus Cars and transferring the equity of Wuhan Lotus Cars to the WFOE, the Company gained control over WFOE through Lotus HK on December 15, 2021.
Through a series of steps, including transferring the assets and employees in the Lotus BEV business unit of Ningbo Geely R&D into Wuhan Lotus Cars and transferring the equity of Wuhan Lotus Cars to the WFOE, the Company gained control over the WFOE through Lotus HK on December 15, 2021.
If a violation is critically serious, causing material adverse impact and severe consequences, the anti-monopoly law enforcement agency of the State Council may determine the specific amount of penalty not less than two times but not more than five times the amount of the aforementioned fine.
If a violation is critically serious, causing material adverse impact and severe consequences, the anti-monopoly law enforcement agency of the State Council may determine the specific amount of penalty not less than two times but not more than five times the amount of the aforementioned fine.
For example, pursuant to the Implementation Measures on Encouraging Purchase and Use of New Energy Vehicles in Shanghai, effective from March 1, 2021, from the date of implementation to December 31, 2023, the special plate quota will be issued for free to qualified consumers who purchase new energy vehicles, while from January 1, 2023, the special license plate quota will no longer issued to consumers who purchase plug-in hybrid (including extended-range) vehicles.
For example, pursuant to the Implementation Measures on Encouraging Purchase and Use of New Energy Vehicles in Shanghai, effective from March 1, 2021, from the date of implementation to December 31, 2024, the special plate quota will be issued for free to qualified consumers who purchase new energy vehicles, while from January 1, 2023, the special license plate quota will no longer issued to consumers who purchase plug-in hybrid (including extended-range) vehicles.
The abovementioned four departments further jointly promulgated the Notice of Improving the Policies on Government Subsidies for Promotion and Application of New Energy Vehicles in 2022, or the 2022 Supplementary Notice of the Policies on Government Subsidies for Vehicles, on December 31, 2021, which specifies that the subsidy standard for new energy vehicles in 2022 shall be reduced by 30% as compared to that of 2021 and it also specifies that the 2022 policies on government subsidies for new energy vehicles shall end on December 31, 2022. 96 Table of Contents Exemption of Vehicle Purchase Tax On June 19, 2023, the Ministry of Finance, the State Administration of Taxation and the Ministry of Industry and Information Technology promogulated the Announcement on the Continuation and Optimization of Vehicle Purchase Tax Relief Policies for New Energy Vehicles, which stipulates that for purchases of qualified new energy vehicles listed in the Catalog of New Energy Vehicle Models Exempted from Vehicle Purchase Tax jointly issued by the Ministry of Industry and Information Technology and the State Administration of Taxation, the policy on vehicle purchase tax exemption was extended until December 31, 2025, provided that the exemption amount for each new energy passenger vehicle shall not exceed RMB30,000.
The abovementioned four departments further jointly promulgated the Notice of Improving the Policies on Government Subsidies for Promotion and Application of New Energy Vehicles in 2022, or the 2022 Supplementary Notice of the Policies on Government Subsidies for Vehicles, on December 31, 2021, which specifies that the subsidy standard for new energy vehicles in 2022 shall be reduced by 30% as compared to that of 2021 and it also specifies that the 2022 policies on government subsidies for new energy vehicles shall end on December 31, 2022. 93 Table of Contents Exemption of Vehicle Purchase Tax On June 19, 2023, the Ministry of Finance, the State Administration of Taxation and the Ministry of Industry and Information Technology promogulated the Announcement on the Continuation and Optimization of Vehicle Purchase Tax Relief Policies for New Energy Vehicles, which stipulates that for purchases of qualified new energy vehicles listed in the Catalog of New Energy Vehicle Models Exempted from Vehicle Purchase Tax jointly issued by the Ministry of Industry and Information Technology and the State Administration of Taxation, the policy on vehicle purchase tax exemption was extended until December 31, 2025, provided that the exemption amount for each new energy passenger vehicle shall not exceed RMB30,000.
Pursuant to the Notice of the Ministry of Industry and Information Technology on Strengthening Network Safety and Data Safety Work of Vehicle Connectivity issued by the Ministry of Industry and Information Technology and implemented on September 15, 2021, enterprises engaged in vehicle connectivity shall strengthen the prevention and protection of intelligent connected vehicles safety, vehicle connectivity’s network safety, vehicle connectivity’s service platform safety and data safety, and improve the safety standard system, for network safety and data safety. 92 Table of Contents According to the Notice on Promoting the Development of Intelligent Connected Vehicles and Maintaining the Security of Surveying and Mapping Geographic Information issued by the Ministry of Natural Resources on August 25, 2022, if an intelligent connected vehicle is equipped with or integrated with certain sensors, the collection, storage, transmission and processing of surveying and mapping geographic information and data, including spatial coordinates, images, point clouds and their attribute information, of vehicles and surrounding road facilities in the process of road test, will be considered surveying and mapping activities.
Pursuant to the Notice of the Ministry of Industry and Information Technology on Strengthening Network Safety and Data Safety Work of Vehicle Connectivity issued by the Ministry of Industry and Information Technology and implemented on September 15, 2021, enterprises engaged in vehicle connectivity shall strengthen the prevention and protection of intelligent connected vehicles safety, vehicle connectivity’s network safety, vehicle connectivity’s service platform safety and data safety, and improve the safety standard system, for network safety and data safety. 89 Table of Contents According to the Notice on Promoting the Development of Intelligent Connected Vehicles and Maintaining the Security of Surveying and Mapping Geographic Information issued by the Ministry of Natural Resources on August 25, 2022, if an intelligent connected vehicle is equipped with or integrated with certain sensors, the collection, storage, transmission and processing of surveying and mapping geographic information and data, including spatial coordinates, images, point clouds and their attribute information, of vehicles and surrounding road facilities in the process of road test, will be considered surveying and mapping activities.
If a passenger vehicle enterprise fails to offset its negative credits, its new products, if the fuel consumption of which does not reach the target fuel consumption value for a certain vehicle models as specified in the Evaluation Methods and Indicators for the Fuel Consumption of Passenger Vehicles, will not be listed in the Announcement of the Vehicle Manufacturers and Products issued by the Ministry of Industry and Information Technology, or will not be granted the compulsory product certification, and the vehicle enterprises may be subject to penalties according to the rules and regulations. 98 Table of Contents Policies to Promote New Energy Vehicle Consumption Pursuant to the Guiding Opinions on Further Promoting Electric Energy as Replacement jointly issued by ten ministries and commissions including NDRC and the Ministry of Industry and Information Technology on March 4, 2022, it proposes to further promote the electrification of the transportation sector.
If a passenger vehicle enterprise fails to offset its negative credits, its new products, if the fuel consumption of which does not reach the target fuel consumption value for a certain vehicle models as specified in the Evaluation Methods and Indicators for the Fuel Consumption of Passenger Vehicles, will not be listed in the Announcement of the Vehicle Manufacturers and Products issued by the Ministry of Industry and Information Technology, or will not be granted the compulsory product certification, and the vehicle enterprises may be subject to penalties according to the rules and regulations. 95 Table of Contents Policies to Promote New Energy Vehicle Consumption Pursuant to the Guiding Opinions on Further Promoting Electric Energy as Replacement jointly issued by ten ministries and commissions including NDRC and the Ministry of Industry and Information Technology on March 4, 2022, it proposes to further promote the electrification of the transportation sector.
Dividend Withholding Tax The PRC Enterprise Income Tax Law stipulates that an income tax rate of 10% applies to dividends declared to non-PRC resident investors that do not have an establishment or place of business in China, or that have such establishment or place of business but where the income is not effectively connected with the establishment or place of business, to the extent that such dividends are derived from sources within China. 111 Table of Contents Pursuant to the Arrangement between Mainland China and the Hong Kong Special Administrative Region for the Avoidance of Double Taxation and Tax Evasion on Income and other applicable laws of mainland China, if a Hong Kong resident enterprise is determined by the competent tax authority to have satisfied the conditions and requirements, the 10% withholding tax rate on the dividends received by the Hong Kong resident enterprise from a PRC resident enterprise may be reduced to 5%.
Dividend Withholding Tax The PRC Enterprise Income Tax Law stipulates that an income tax rate of 10% applies to dividends declared to non-PRC resident investors that do not have an establishment or place of business in China, or that have such establishment or place of business but where the income is not effectively connected with the establishment or place of business, to the extent that such dividends are derived from sources within China. 108 Table of Contents Pursuant to the Arrangement between Mainland China and the Hong Kong Special Administrative Region for the Avoidance of Double Taxation and Tax Evasion on Income and other applicable laws of mainland China, if a Hong Kong resident enterprise is determined by the competent tax authority to have satisfied the conditions and requirements, the 10% withholding tax rate on the dividends received by the Hong Kong resident enterprise from a PRC resident enterprise may be reduced to 5%.
Regulations on Environmental Protection and Work Safety Regulations on Environmental Protection Pursuant to the PRC Environmental Protection Law promulgated by the Standing Committee of the National People’s Congress on December 26, 1989, last amended on April 24, 2014 and effective on January 1, 2015, any entity which discharges or will discharge pollutants during the course of operations or other activities must implement effective environmental protection safeguards and procedures to control and properly treat waste gas, waste water, waste residue, dust, malodorous gases, radioactive substances, noise, vibrations, electromagnetic radiation and other hazards produced during such activities. 105 Table of Contents Regulations on Work Safety Vehicle and component manufacturers shall comply with regulations related to environmental protection and work safety.
Regulations on Environmental Protection and Work Safety Regulations on Environmental Protection Pursuant to the PRC Environmental Protection Law promulgated by the Standing Committee of the National People’s Congress on December 26, 1989, last amended on April 24, 2014 and effective on January 1, 2015, any entity which discharges or will discharge pollutants during the course of operations or other activities must implement effective environmental protection safeguards and procedures to control and properly treat waste gas, waste water, waste residue, dust, malodorous gases, radioactive substances, noise, vibrations, electromagnetic radiation and other hazards produced during such activities. 102 Table of Contents Regulations on Work Safety Vehicle and component manufacturers shall comply with regulations related to environmental protection and work safety.
This interpretation applies to all contractual disputes arising from the acquisition of the rights and interests by a foreign investor by way of gift, division of property, merger of enterprises, or division of enterprises. 90 Table of Contents Regulations Relating to Manufacturing Passenger Vehicles Pursuant to the Provisions on Administration of Investment in Automotive Industry, which was promulgated by NDRC and effective on January 10, 2019, enterprises are encouraged to, through equity investment and production capacity cooperation, facilitate mergers and restructuring, enter into strategic alliances, carry out joint research and development of products, organize joint manufacturing, and increase industrial integration.
This interpretation applies to all contractual disputes arising from the acquisition of the rights and interests by a foreign investor by way of gift, division of property, merger of enterprises, or division of enterprises. 87 Table of Contents Regulations Relating to Manufacturing Passenger Vehicles Pursuant to the Provisions on Administration of Investment in Automotive Industry, which was promulgated by NDRC and effective on January 10, 2019, enterprises are encouraged to, through equity investment and production capacity cooperation, facilitate mergers and restructuring, enter into strategic alliances, carry out joint research and development of products, organize joint manufacturing, and increase industrial integration.
The Regulations emphasize that no individual or organization may engage in any activity of illegally hacking into, interfering with, or damaging any critical information infrastructure or endanger the critical information infrastructure security. 102 Table of Contents On April 13, 2020, the Measures for Cybersecurity Review was jointly promulgated by CAC, NDRC, the Ministry of Industry and Information Technology, the Ministry of Public Security, the Ministry of State Security, the Ministry of Finance, the Ministry of Commerce, the People’s Bank of China, the State Administration for Market Regulation, the National Radio and Television Administration, the National Administration of State Secrets Protection and the State Cryptography Administration, revised on December 28, 2021 by the aforementioned departments and CSRC, and the Revised Measures for Cybersecurity Review was formally implemented on February 15, 2022.
The Regulations emphasize that no individual or organization may engage in any activity of illegally hacking into, interfering with, or damaging any critical information infrastructure or endanger the critical information infrastructure security. 99 Table of Contents On April 13, 2020, the Measures for Cybersecurity Review was jointly promulgated by CAC, NDRC, the Ministry of Industry and Information Technology, the Ministry of Public Security, the Ministry of State Security, the Ministry of Finance, the Ministry of Commerce, the People’s Bank of China, the State Administration for Market Regulation, the National Radio and Television Administration, the National Administration of State Secrets Protection and the State Cryptography Administration, revised on December 28, 2021 by the aforementioned departments and CSRC, and the Revised Measures for Cybersecurity Review was formally implemented on February 15, 2022.
Employers are allowed to use dispatched workers for temporary, auxiliary or substitutive positions, and the number of dispatched workers may not exceed 10% of the total number of employees. 112 Table of Contents Social Insurance and Housing Fund According to the PRC Social Insurance Law promulgated by the Standing Committee of the National People’s Congress on October 28, 2010 and amended on December 29, 2018 and the Regulations on the Administration of Housing Funds promulgated by the State Council on April 3, 1999 and last amended on March 24, 2019, employers are required to contribute to a number of social security funds, including funds for basic pension insurance, unemployment insurance, basic medical insurance, occupational injury insurance, and maternity insurance, and also to housing funds.
Employers are allowed to use dispatched workers for temporary, auxiliary or substitutive positions, and the number of dispatched workers may not exceed 10% of the total number of employees. 109 Table of Contents Social Insurance and Housing Fund According to the PRC Social Insurance Law promulgated by the Standing Committee of the National People’s Congress on October 28, 2010 and amended on December 29, 2018 and the Regulations on the Administration of Housing Funds promulgated by the State Council on April 3, 1999 and last amended on March 24, 2019, employers are required to contribute to a number of social security funds, including funds for basic pension insurance, unemployment insurance, basic medical insurance, occupational injury insurance, and maternity insurance, and also to housing funds.
Pursuant to the Notice on the Issuance of Financial Support to Facilitate Efforts in Reaching Peak Carbon Dioxide Emissions and Carbon Neutralization issued by the Ministry of Finance on May 25, 2022, it proposes to vigorously support the development of new energy vehicles and improve the supporting policies for charging and replacement infrastructure. 97 Table of Contents Pursuant to the Opinions on Promoting Urbanization Construction with County Towns as an Important Carrier issued and implemented by the General Office of the CPC Central Committee and the General Office of the State Council on May 6, 2022, it emphasizes to improve municipal transportation facilities.
Pursuant to the Notice on the Issuance of Financial Support to Facilitate Efforts in Reaching Peak Carbon Dioxide Emissions and Carbon Neutralization issued by the Ministry of Finance on May 25, 2022, it proposes to vigorously support the development of new energy vehicles and improve the supporting policies for charging and replacement infrastructure. 94 Table of Contents Pursuant to the Opinions on Promoting Urbanization Construction with County Towns as an Important Carrier issued and implemented by the General Office of the CPC Central Committee and the General Office of the State Council on May 6, 2022, it emphasizes to improve municipal transportation facilities.
If a violation is critically serious, causing material adverse impact and severe consequences, the anti-monopoly law enforcement agency of the State Council may determine the specific amount of penalty not less than two times but not more than five times the amount of the aforementioned fine. 113 Table of Contents The Interim Provisions on Prohibition of Abuse of Dominant Market Position promulgated by the State Administration for Market Regulation and last amended on March 10, 2023 and effective on April 15, 2023, further prevented and curbed abuse of market dominance.
If a violation is critically serious, causing material adverse impact and severe consequences, the anti-monopoly law enforcement agency of the State Council may determine the specific amount of penalty not less than two times but not more than five times the amount of the aforementioned fine. 110 Table of Contents The Interim Provisions on Prohibition of Abuse of Dominant Market Position promulgated by the State Administration for Market Regulation and last amended on March 10, 2023 and effective on April 15, 2023, further prevented and curbed abuse of market dominance.
In addition to Eletre, Emeya and future BEV models, major vehicle models under the Distribution Agreement include Evija (BEV sports car) and Emira (ICE sports car), both developed and manufactured by Lotus UK, and another BEV sports car to be launched by Lotus UK in the near future.
In addition to Eletre, Emeya and future lifestyle models, major vehicle models under the Distribution Agreement include Evija (BEV sports car) and Emira (ICE sports car), both developed and manufactured by Lotus UK, and another BEV sports car to be launched by Lotus UK in the near future.
The Data Security Measures in the IT Field also impose certain obligations on industrial and telecommunication data handlers in relation to, among others, implementation of data security work system, administration of key management, data collection, data storage, data usage, data transmission, provision of data, publicity of data, data destruction, safety audit and emergency plans, etc. 101 Table of Contents The Administrative Provisions on Security Vulnerability of Network Products was jointly promulgated by the Ministry of Industry and Information Technology, CAC and the Ministry of Public Security on July 12, 2021 and effective on September 1, 2021.
The Data Security Measures in the IT Field also impose certain obligations on industrial and telecommunication data handlers in relation to, among others, implementation of data security work system, administration of key management, data collection, data storage, data usage, data transmission, provision of data, publicity of data, data destruction, safety audit and emergency plans, etc. 98 Table of Contents The Administrative Provisions on Security Vulnerability of Network Products was jointly promulgated by the Ministry of Industry and Information Technology, CAC and the Ministry of Public Security on July 12, 2021 and effective on September 1, 2021.
Pursuant to SAFE Circular 13, investors must register with banks for direct domestic investment and direct overseas investment. 108 Table of Contents Pursuant to SAFE Circular 19 which became effective on June 1, 2015 and was last amended on December 30, 2019, a foreign-invested enterprise may, according to its actual business needs, settle with a bank the portion of the foreign exchange capital in its capital account for which the foreign exchange administration has confirmed monetary capital contribution rights and interests (or for which the bank has registered the injection of the monetary capital contribution into the account).
Pursuant to SAFE Circular 13, investors must register with banks for direct domestic investment and direct overseas investment. 105 Table of Contents Pursuant to SAFE Circular 19 which became effective on June 1, 2015 and was last amended on December 30, 2019, a foreign-invested enterprise may, according to its actual business needs, settle with a bank the portion of the foreign exchange capital in its capital account for which the foreign exchange administration has confirmed monetary capital contribution rights and interests (or for which the bank has registered the injection of the monetary capital contribution into the account).
Compliance with such laws and regulations at an international, regional, national, state, provincial and local level is and will be an important aspect of our ability to continue operations. 118 Table of Contents Many countries have announced a requirement for the sale of zero-emission vehicles only within proscribed timeframes, some as early as 2035, and we as an electric vehicle developer aim to comply with these requirements across our entire coming product portfolio as we expand.
Compliance with such laws and regulations at an international, regional, national, state, provincial and local level is and will be an important aspect of our ability to continue operations. 115 Table of Contents Many countries have announced a requirement for the sale of zero-emission vehicles only within proscribed timeframes, some as early as 2035, and we as an electric vehicle developer aim to comply with these requirements across our entire coming product portfolio as we expand.
Policies Relating to Incentives for Electric Vehicle Charging Infrastructure According to the Guiding Opinions of the General Office of the State Council on Accelerating the Promotion and Application of New Energy Vehicles effective on July 14, 2014, the Guiding Opinions of the General Office of the State Council on Accelerating the Construction of Electric Vehicle Charging Infrastructure effective on September 29, 2015 and the Guidance on the Development of Electric Vehicle Charging Infrastructure (2015 – 2020) effective on October 9, 2015, the PRC government has actively promoted the construction of charging infrastructure and requires local governments to actively build urban public charging facilities and appropriately simplify planning and construction approval, improve the policies on fiscal prices and gradually standardize the charging services pricing mechanism.
Policies Relating to Incentives for Electric Vehicle Charging Infrastructure According to the Guiding Opinions of the General Office of the State Council on Accelerating the Promotion and Application of New Energy Vehicles effective on July 14, 2014, and the Guidance on the Development of Electric Vehicle Charging Infrastructure (2015 – 2020) effective on October 9, 2015, the PRC government has actively promoted the construction of charging infrastructure and requires local governments to actively build urban public charging facilities and appropriately simplify planning and construction approval, improve the policies on fiscal prices and gradually standardize the charging services pricing mechanism.
If a third party knows or should have known the above-mentioned illegal conduct but nevertheless obtains, uses, or discloses trade secrets of others, the third party may be deemed to have misappropriated the others’ trade secrets. 107 Table of Contents Business operators who violate the provisions of the Anti-Unfair Competition Law and cause others to suffer damages shall bear civil liability, and where the legitimate rights and interests of a business operator are harmed by unfair competition, the business operator may file a lawsuit with a People’s Court.
If a third party knows or should have known the above-mentioned illegal conduct but nevertheless obtains, uses, or discloses trade secrets of others, the third party may be deemed to have misappropriated the others’ trade secrets. 104 Table of Contents Business operators who violate the provisions of the Anti-Unfair Competition Law and cause others to suffer damages shall bear civil liability, and where the legitimate rights and interests of a business operator are harmed by unfair competition, the business operator may file a lawsuit with a People’s Court.
If they fail to complete the filings or registrations required by overseas direct investment regulations, the authority may order them to suspend or cease the implementation of such investment and make corrections within a specified time. 110 Table of Contents Regulations on Dividend Distribution The principal laws and regulations regulating the distribution of dividends by foreign-invested enterprises in mainland China include the PRC Company Law, as amended in 2004, 2005, 2013, 2018 and 2023, and the 2019 PRC Foreign Investment Law and its Implementation Regulations.
If they fail to complete the filings or registrations required by overseas direct investment regulations, the authority may order them to suspend or cease the implementation of such investment and make corrections within a specified time. 107 Table of Contents Regulations on Dividend Distribution The principal laws and regulations regulating the distribution of dividends by foreign-invested enterprises in mainland China include the PRC Company Law, as amended in 2004, 2005, 2013, 2018 and 2023, and the 2019 PRC Foreign Investment Law and its Implementation Regulations.
Such personal data controller is required to collect information in accordance with applicable laws, and prior to collecting such data, the information provider’s consent is required. 104 Table of Contents Regulations on Land and the Development of Construction Projects Under the Interim Regulations on Assignment and Transfer of the Rights to the Use of the State-Owned Urban Land promulgated by the State Council on May 19, 1990, last amended on November 29, 2020 and effective on the same date, China adopts a system of assignment and transfer of the right to use state-owned land.
Such personal data controller is required to collect information in accordance with applicable laws, and prior to collecting such data, the information provider’s consent is required. 101 Table of Contents Regulations on Land and the Development of Construction Projects Under the Interim Regulations on Assignment and Transfer of the Rights to the Use of the State-Owned Urban Land promulgated by the State Council on May 19, 1990, last amended on November 29, 2020 and effective on the same date, China adopts a system of assignment and transfer of the right to use state-owned land.
We and our dealers must obtain and comply with the terms and conditions of government permits, certificates, licenses, authorizations, approvals and satisfy other requirements under U.S. laws, as well as state and local government laws. 119 Table of Contents Manufacturers of vehicles sold in the U.S. are obligated to meet all applicable regulatory requirements in every U.S. jurisdiction in which it operates, distributes, or sells its products.
We and our dealers must obtain and comply with the terms and conditions of government permits, certificates, licenses, authorizations, approvals and satisfy other requirements under U.S. laws, as well as state and local government laws. 116 Table of Contents Manufacturers of vehicles sold in the U.S. are obligated to meet all applicable regulatory requirements in every U.S. jurisdiction in which it operates, distributes, or sells its products.
Eletre will also debut a next-generation digital head unit, which is expected to provide fully customizable displays, hosted on an advanced driver information module. 78 Table of Contents Eletre is equipped with the latest connectivity technology, including 5G compatibility, which enables the performance and features of the vehicle to be continually updated and enhanced via over-the-air (OTA) updates.
Eletre will also debut a next-generation digital head unit, which is expected to provide fully customizable displays, hosted on an advanced driver information module. 76 Table of Contents Eletre is equipped with the latest connectivity technology, including 5G compatibility, which enables the performance and features of the vehicle to be continually updated and enhanced via over-the-air (OTA) updates.
The primary recall obligations are to provide notice to owners of all affected vehicles, and to offer a remedy, free of charge, to all affected vehicle owners. 120 Table of Contents Regulations on Distribution EU The legal rules governing commercial agency relationships (agents who promote sales in the name of and on behalf of the principal) are to some extent harmonized under the European Commercial Agency Directive (86/653/EEC).
The primary recall obligations are to provide notice to owners of all affected vehicles, and to offer a remedy, free of charge, to all affected vehicle owners. 117 Table of Contents Regulations on Distribution EU The legal rules governing commercial agency relationships (agents who promote sales in the name of and on behalf of the principal) are to some extent harmonized under the European Commercial Agency Directive (86/653/EEC).
Copyright infringers may also be subject to fines and administrative or criminal liabilities in severe situations. 106 Table of Contents Pursuant to the Computer Software Protection Regulations promulgated by the State Council on December 20, 2001 and last amended on January 30, 2013, a software copyright owner may go through the registration procedures with a software registration authority recognized by the State Council’s copyright administrative authority.
Copyright infringers may also be subject to fines and administrative or criminal liabilities in severe situations. 103 Table of Contents Pursuant to the Computer Software Protection Regulations promulgated by the State Council on December 20, 2001 and last amended on January 30, 2013, a software copyright owner may go through the registration procedures with a software registration authority recognized by the State Council’s copyright administrative authority.
Pursuant to these rules and regulations, the balance of the foreign debts of an foreign-invested enterprise cannot exceed the difference between the total investment and the registered capital of the foreign-invested enterprise. 109 Table of Contents On January 12, 2017, the People’s Bank of China promulgated the Notice of the People’s Bank of China on Matters concerning the Macro-Prudential Management of Full-Covered Cross-Border Financing, or PBOC Notice No. 9.
Pursuant to these rules and regulations, the balance of the foreign debts of an foreign-invested enterprise cannot exceed the difference between the total investment and the registered capital of the foreign-invested enterprise. 106 Table of Contents On January 12, 2017, the People’s Bank of China promulgated the Notice of the People’s Bank of China on Matters concerning the Macro-Prudential Management of Full-Covered Cross-Border Financing, or PBOC Notice No. 9.
New duties that our entities may be required to adhere to include: Supply Chain Due Diligence, Durability/Right-to-Repair/Battery Conformity (there are proposed minimum values for electrochemical performance and durability of rechargeable industrial batteries), Labelling and Information Disclosure and Enhanced Producer Responsibility For End-of-Life Batteries. 122 Table of Contents U.K.
New duties that our entities may be required to adhere to include: Supply Chain Due Diligence, Durability/Right-to-Repair/Battery Conformity (there are proposed minimum values for electrochemical performance and durability of rechargeable industrial batteries), Labelling and Information Disclosure and Enhanced Producer Responsibility For End-of-Life Batteries. 119 Table of Contents U.K.
Through the plant automated system, the manufacturing process parameters and parts information are monitored for process control and traceability. 86 Table of Contents Our Environmental, Social and Governance Charter Guided by the same principle of the Lotus brand and in collaboration with Lotus UK, our new Environmental, Social and Governance (ESG) Charter formalizes the activities that we have been carrying out.
Through the plant automated system, the manufacturing process parameters and parts information are monitored for process control and traceability. 83 Table of Contents Our Environmental, Social and Governance Charter Guided by the same principle of the Lotus brand and in collaboration with Lotus UK, our new Environmental, Social and Governance (ESG) Charter formalizes the activities that we have been carrying out.
Additionally, we utilize pre-condition checks, sequence and dependency execution, failure detection, and rollback and recovery when performing updates during the OTA process. 88 Table of Contents Competition We face competition from both traditional luxury automotive developers and an increasing number of newer companies focused on electric and other alternative fuel vehicles.
Additionally, we utilize pre-condition checks, sequence and dependency execution, failure detection, and rollback and recovery when performing updates during the OTA process. 85 Table of Contents Competition We face competition from both traditional luxury automotive developers and an increasing number of newer companies focused on electric and other alternative fuel vehicles.
A vehicle that has been type-approved in one EU member state can thereafter be sold and registered in all member states without further tests. As of the date of this annual report, we have acquired EU type approval for Eletre and Emeya in compliance with the Whole Vehicle Type Approval. 115 Table of Contents U.K.
A vehicle that has been type-approved in one EU member state can thereafter be sold and registered in all member states without further tests. As of the date of this annual report, we have acquired EU type approval for Eletre and Emeya in compliance with the Whole Vehicle Type Approval. 112 Table of Contents U.K.
We also have a scalable asset-light business model that we believe generates significant competitive advantages, allowing us to incur less upfront capital expenditure and focus on R&D and technologies. 89 Table of Contents Insurance We maintain various insurance policies to safeguard ourselves against risks and unexpected events.
We also have a scalable asset-light business model that we believe generates significant competitive advantages, allowing us to incur less upfront capital expenditure and focus on R&D and technologies. 86 Table of Contents Insurance We maintain various insurance policies to safeguard ourselves against risks and unexpected events.
As of the date of this annual report, LTC’s operations in mainland China are conducted by its mainland China subsidiaries and LTC does not have any VIE structure. 76 Table of Contents On February 22, 2024, we consummated the Business Combination with LCAA, pursuant to the Merger Agreement.
As of the date of this annual report, LTC’s operations in mainland China are conducted by its mainland China subsidiaries and LTC does not have any VIE structure. 73 Table of Contents On February 22, 2024, we consummated the Business Combination with LCAA, pursuant to the Merger Agreement.
However, the 2021 Negative List provides that foreign investors shall hold no more than 50% of the equity interest in a service provider operating certain value-added telecommunications services (other than for e-commerce, domestic multi-parties communications, storage and forwarding categories, call centers).
However, the 2024 Negative List provides that foreign investors shall hold no more than 50% of the equity interest in a service provider operating certain value-added telecommunications services (other than for e-commerce, domestic multi-parties communications, storage and forwarding categories, call centers).
According to the Provisions on the Administration of Mobile Internet Applications Information Services amended by CAC on June 14, 2022 and effective on August 1, 2022, CAC is in charge of the law enforcement of supervision and administration of the information contents of mobile internet apps nationwide; providers rendering permitted internet information services via mobile internet applications shall also be subject to information security requirements; and mobile internet application providers shall sign a service agreement to clarify the rights and obligations of both parties. 100 Table of Contents Under the 2021 Negative List, the provision of value-added telecommunications services falls into the restricted category (other than for e-commerce, domestic multi-parties communications, storage and forwarding categories, call centers) and the foreign shareholding ratio shall not exceed 50%.
According to the Provisions on the Administration of Mobile Internet Applications Information Services amended by CAC on June 14, 2022 and effective on August 1, 2022, CAC is in charge of the law enforcement of supervision and administration of the information contents of mobile internet apps nationwide; providers rendering permitted internet information services via mobile internet applications shall also be subject to information security requirements; and mobile internet application providers shall sign a service agreement to clarify the rights and obligations of both parties. 97 Table of Contents Under the 2024 Negative List, the provision of value-added telecommunications services falls into the restricted category (other than for e-commerce, domestic multi-parties communications, storage and forwarding categories, call centers) and the foreign shareholding ratio shall not exceed 50%.
Particularly, quality control is carried out in accordance with our quality assurance framework and approved by Geely Holding. In addition, Geely Holding is responsible for obtaining certificates for the manufactured vehicles. 85 Table of Contents Manufacturing Plant We work with a BEV manufacturing facility in Wuhan, China, which is owned and operated by Geely Holding.
Particularly, quality control is carried out in accordance with our quality assurance framework and approved by Geely Holding. In addition, Geely Holding is responsible for obtaining certificates for the manufactured vehicles. 82 Table of Contents Manufacturing Plant We work with a BEV manufacturing facility in Wuhan, China, which is owned and operated by Geely Holding.
GDPR is based on the EU GDPR, subject to minor amendments to make it more suited to its U.K. context. 117 Table of Contents The EU GDPR was originally implemented in the U.K. through the Data Protection Act 2018. This instrument has since been amended to align with the U.K. GDPR.
GDPR is based on the EU GDPR, subject to minor amendments to make it more suited to its U.K. context. 114 Table of Contents The EU GDPR was originally implemented in the U.K. through the Data Protection Act 2018. This instrument has since been amended to align with the U.K. GDPR.
The producer—the manufacturer or importer—placing the vehicle or component on the U.K. market is responsible for compliance. C. Organizational Structure The following diagram illustrates our corporate structure, including our principal and other subsidiaries as of the date of this annual report. 123 Table of Contents D.
The producer—the manufacturer or importer—placing the vehicle or component on the U.K. market is responsible for compliance. C. Organizational Structure The following diagram illustrates our corporate structure, including our principal and other subsidiaries as of the date of this annual report. 120 Table of Contents D.
As we transform rapidly to become a global pioneer of electric performance vehicles, we recognize our responsibility to do so in ways that lead our industry in minimizing its impact on the environment, benefitting society and the planet as a whole. ● All electric .
As we transform rapidly to become a global pioneer of electric performance vehicles, we recognize our responsibility to do so in ways that lead our industry in minimizing its impact on the environment, benefitting society and the planet as a whole. ● Focus on electric vehicles .
These standards include minimum performance requirements for vehicle structure and equipment, as well as other occupant protection requirements such as passenger restraint systems (e.g., airbags, seatbelts), systems, and features to protect vehicle occupants. 116 Table of Contents Electric Vehicle Specific Requirements .
These standards include minimum performance requirements for vehicle structure and equipment, as well as other occupant protection requirements such as passenger restraint systems (e.g., airbags, seatbelts), systems, and features to protect vehicle occupants. 113 Table of Contents Electric Vehicle Specific Requirements .
Many of these programs focus on projects related to electric mobility and autonomous driving. 121 Table of Contents U.K. In the U.K., there are a number of tax benefits currently in place to stimulate demand for BEVs.
Many of these programs focus on projects related to electric mobility and autonomous driving. 118 Table of Contents U.K. In the U.K., there are a number of tax benefits currently in place to stimulate demand for BEVs.
The determination of whether any offering or listing is “indirect” will be made on a “substance over form” basis. Under the Overseas Listing Filing Rules, the reporting entity shall submit filing materials including but not limited to a report to CSRC within three business days after submitting listing applications to an overseas stock market.
The determination of whether any offering or listing is “indirect” will be made on a “substance over form” basis. 111 Table of Contents Under the Overseas Listing Filing Rules, the reporting entity shall submit filing materials including but not limited to a report to CSRC within three business days after submitting listing applications to an overseas stock market.
Property, Plant and Equipment We have established offices in various cities in China and Europe. As of December 31, 2023, we had leased premises as summarized below and under operating lease agreements from independent third parties.
Property, Plant and Equipment We have established offices in various cities in China and Europe. As of December 31, 2024, we had leased premises as summarized below and under operating lease agreements from independent third parties.
Evija is equipped with a 93-kilowatt-hour battery pack, with a fast charging time of around 18 minutes to 100% capacity. We started deliveries of Evija in 2024. Distribution of vehicles and other products We are responsible for establishing and maintaining a distribution network and an aftersales service network either selling directly, through Lotus UK’s subsidiaries, or by appointing sub-distributors.
Evija is equipped with a 93-kilowatt-hour battery pack, with a fast charging time of around 18 minutes to 100% capacity. Distribution of vehicles and other products We are responsible for establishing and maintaining a distribution network and an aftersales service network either selling directly, through Lotus UK’s subsidiaries, or by appointing sub-distributors.
Regulations on Taxation Enterprise Income Tax According to the PRC Enterprise Income Tax Law promulgated by the Standing Committee of the National People’s Congress on March 16, 2007 and last amended on December 29, 2018 and the Implementation Rules of the PRC Enterprise Income Tax Law promulgated by the State Council on December 6, 2007 and amended on April 23, 2019, the income tax rate for both PRC domestic companies and foreign-invested enterprises is 25% unless otherwise provided for specifically.
Regulations on Taxation Enterprise Income Tax According to the PRC Enterprise Income Tax Law promulgated by the Standing Committee of the National People’s Congress on March 16, 2007 and last amended on December 29, 2018 and the Implementation Rules of the PRC Enterprise Income Tax Law promulgated by the State Council on December 6, 2007 and last amended on December 6, 2024, the income tax rate for both PRC domestic companies and foreign-invested enterprises is 25% unless otherwise provided for specifically.
Record-filing of customs declaration entities shall be valid permanently. Regulations on Product Liability and Consumer Protection On May 28, 2020, the National People’s Congress approved the PRC Civil Code, which took effect on January 1, 2021.
Record-filing of customs declaration entities shall be valid permanently. 91 Table of Contents Regulations on Product Liability and Consumer Protection On May 28, 2020, the National People’s Congress approved the PRC Civil Code, which took effect on January 1, 2021.
Patents According to the PRC Patent Law promulgated by the Standing Committee of the National People’s Congress on March 12, 1984 and currently effective from June 1, 2021, and the Implementation Rules of the PRC Patent Law promulgated by the State Council on June 15, 2001 and last amended on January 9, 2010, there are three types of patents in China: invention patents, utility model patents, and design patents.
Patents According to the PRC Patent Law promulgated by the Standing Committee of the National People’s Congress on March 12, 1984 and currently effective from June 1, 2021, and the Implementation Rules of the PRC Patent Law promulgated by the State Council on June 15, 2001 and last amended on January 20, 2024, there are three types of patents in China: invention patents, utility model patents, and design patents.
The 2022 Encouraged Catalog and the 2021 Negative List set out the industries and economic activities in which foreign investment in China is encouraged, restricted, or prohibited.
The 2022 Encouraged Catalog and the 2024 Negative List set out the industries and economic activities in which foreign investment in China is encouraged, restricted, or prohibited.
Regulations on Foreign Investment in China Guidance Catalog of Industries for Foreign Investment Investments in China by foreign investors and foreign-invested enterprises are regulated by (i) the Special Management Measures (Negative List) for the Access of Foreign Investment (2021 Version), or the 2021 Negative List, which was jointly promulgated by the Ministry of Commerce and NDRC on December 27, 2021 and effective on January 1, 2022, and (ii) the Catalog of Industries for Encouraged Foreign Investment (2022 Version), or the 2022 Encouraged Catalog, which was jointly promulgated by the Ministry of Commerce and NDRC on October 26, 2022 and effective on January 1, 2023.
Regulations on Foreign Investment in China Guidance Catalog of Industries for Foreign Investment Investments in China by foreign investors and foreign-invested enterprises are regulated by (i) the Special Management Measures (Negative List) for the Access of Foreign Investment (2024 Version), or the 2024 Negative List, which was jointly promulgated by the Ministry of Commerce and NDRC on September 6 2024 and effective on November 1, 2024, and (ii) the Catalog of Industries for Encouraged Foreign Investment (2022 Version), or the 2022 Encouraged Catalog, which was jointly promulgated by the Ministry of Commerce and NDRC on October 26, 2022 and effective on January 1, 2023.
As of December 31, 2023, we had 330 registered patents and 772 pending patent applications in various jurisdictions such as mainland China, the U.S., Japan, and the U.K., etc., including patents for our vehicle architecture, intelligent cabin, intelligent driving, and fast charging related technologies.
As of December 31, 2024, we had 539 registered patents and 839 pending patent applications in various jurisdictions such as mainland China, the U.S., Japan, and the U.K., etc., including patents for our vehicle architecture, intelligent cabin, intelligent driving, and fast charging related technologies.
As of the date of this annual report, we have acquired U.K. type approval for Eletre and the type approval for Emeya is in process.
As of the date of this annual report, we have acquired U.K. type approval for Eletre and Emeya.
This manufacturing plant is purpose-built for EVs with advanced manufacturing technologies. Covering an area of over one million square meters, the plant has the capacity to produce up to 150,000 vehicles per year. The plant has been constructed to be a brand-new, world-class plant to produce electric vehicles.
This manufacturing plant is purpose-built for EVs with advanced manufacturing technologies, covering an area of over one million square meters. The plant has been constructed to be a brand-new, world-class plant to produce electric vehicles.
Pursuant to the Administrative Measures on Internet Information Services, promulgated by the State Council in September, 2000 and amended in January, 2011, “internet information services” refer to the provision of information through the internet to online users, and are divided into “commercial internet information services” and “non-commercial internet information services”.
Pursuant to the Administrative Measures on Internet Information Services, promulgated by the State Council in September, 2000 and recently amended on December 6, 2024, “internet information services” refer to the provision of information through the internet to online users, and are divided into “commercial internet information services” and “non-commercial internet information services”.
Emira Launched in 2021, Emira is built on a new Lotus sports car architecture. It uses the pioneering Lotus bonded extruded aluminum chassis technology. Emira is 4,412 millimeters long with a 2,575-millimeter wheelbase. It comes with a power output of 298 kilowatts.
Emira Launched in 2021 with average MSRP higher than US$85,000, Emira is built on a new Lotus sports car architecture. It uses the pioneering Lotus bonded extruded aluminum chassis technology. Emira is 4,412 millimeters long with a 2,575-millimeter wheelbase. It comes with a power output of 298 kilowatts.
We also had 304 registered trademarks, including “ELETRE” and “EMEYA,” registered copyrights to 34 software programs developed by us relating to various aspects of our operations, as well as 113 registered domain names as of December 31, 2023.
We also had 439 registered trademarks, including “ELETRE” and “EMEYA,” registered copyrights to 51 software programs developed by us relating to various aspects of our operations, as well as 113 registered domain names as of December 31, 2024.
For example, business operators should guarantee that the products and services they provide satisfy the requirements for personal or property safety, and provide consumers with authentic information about the quality, function, usage, and term of validity of the products or services.
This law imposes stringent requirements and obligations on business operators. For example, business operators should guarantee that the products and services they provide satisfy the requirements for personal or property safety, and provide consumers with authentic information about the quality, function, usage, and term of validity of the products or services.
SAFE Circular 16, promulgated by SAFE and effective on June 9, 2016, stipulates that PRC domestic companies may also convert their foreign debts denominated in foreign currencies into Renminbi on a discretionary basis.
SAFE Circular 16, promulgated by SAFE on June 9, 2016 and lastly amended on December 4, 2023, stipulates that PRC domestic companies may also convert their foreign debts denominated in foreign currencies into Renminbi on a discretionary basis.
The Provisions on the Review of Business Operator Concentration promulgated by the State Administration for Market Regulation on March 10, 2023 and effective on April 15, 2023, further provided for matters such as the declaration and review of the concentration of business operators and the investigation of the illegal implementation of the concentration of business operators.
The Provisions on the Review of Business Operator Concentration promulgated by the State Administration for Market Regulation on March 10, 2023 and effective on April 15, 2023, and the Provisions of the State Council on Thresholds for the Declaration of Concentrations of Undertakings promulgated by the State Council on January 22, 2024, further provided for matters such as the declaration and review of the concentration of business operators and the investigation of the illegal implementation of the concentration of business operators.
Established new energy vehicle manufacturers and energy vehicle batteries manufacturers are encouraged to participate in new comprehensive utilization projects. 95 Table of Contents Favorable Government Policies Relating to New Energy Vehicles in mainland China Government Subsidies for New Energy Vehicle Purchasers According to the Notice by the PRC Ministry of Finance, the Ministry of Science and Technology, the Ministry of Industry and Information Technology and NDRC of the Policies on Government Subsidies for Promotion and Application of New Energy Vehicles in 2016 – 2020 jointly promulgated by the Ministry of Finance, the Ministry of Science and Technology, the Ministry of Industry and Information Technology and NDRC on April 22, 2015 and effective on the same date, those who purchase new energy vehicles included in the Catalog of Recommended New Energy Vehicle Models for Promotion and Application from 2016 to 2020 may obtain subsidies.
Favorable Government Policies Relating to New Energy Vehicles in mainland China Government Subsidies for New Energy Vehicle Purchasers According to the Notice by the PRC Ministry of Finance, the Ministry of Science and Technology, the Ministry of Industry and Information Technology and NDRC of the Policies on Government Subsidies for Promotion and Application of New Energy Vehicles in 2016 – 2020 jointly promulgated by the Ministry of Finance, the Ministry of Science and Technology, the Ministry of Industry and Information Technology and NDRC on April 22, 2015 and effective on the same date, those who purchase new energy vehicles included in the Catalog of Recommended New Energy Vehicle Models for Promotion and Application from 2016 to 2020 may obtain subsidies.
With average MSRP higher than US$100,000, Eletre and Eletre S feature the 450 kilowatts single-speed version, with a maximum miles per full charge according to the Worldwide Harmonized Light Vehicles Test Procedure (WLTP) of 600 kilometers (km).
Eletre and Eletre S feature the 450 kilowatts single-speed version, with a maximum miles per full charge according to the Worldwide Harmonized Light Vehicles Test Procedure (WLTP) of 600 kilometers (km).
Non-Imposition of Vehicle and Vessel Tax According to the Notice of the Policies on Energy-saving and New-energy Vehicles Enjoying Vehicle and Vessel Tax Reduction and Exemption jointly promulgated by the Ministry of Finance, the Ministry of Transport, the State Administration of Taxation, and the Ministry of Industry and Information Technology on July 10, 2018 and effective on the same date, purely electric passenger vehicles are not subject to vehicle and vessel tax.
Non-Imposition of Vehicle and Vessel Tax According to the Notice of the Policies on Energy-saving and New-energy Vehicles Enjoying Vehicle and Vessel Tax Reduction and Exemption jointly promulgated by the Ministry of Finance, the Ministry of Transport, the State Administration of Taxation, and the Ministry of Industry and Information Technology on July 10, 2018, which was amended on May 27, 2024 and became effective on July 1, 2024, purely electric passenger vehicles are not subject to vehicle and vessel tax.
These versions are designed to satisfy the various demands of customers—Eletre R is tailored for customers who seek speed and control while Eletre S provides longer range and more comfort.
Three different versions of Eletre are available, namely, Eletre, Eletre S and Eletre R, with the choice of two powertrains. These versions are designed to satisfy the various demands of customers—Eletre R is tailored for customers who seek speed and control while Eletre S provides longer range and more comfort.
If a producer adopts the OTA method to eliminate defects in automobile products and implements a recall, it shall formulate a recall plan and file it with the State Administration for Market Regulation.
If a producer adopts the OTA method to eliminate defects in automobile products and implements a recall, it shall formulate a recall plan and file it with the State Administration for Market Regulation. If the OTA method fails to effectively eliminate defects or cause new defects, the producer shall take recall measures again.
We believe that our existing facilities are generally adequate to meet our current needs, but we expect to seek additional space as needed to accommodate future growth. ​ ​ ​ ​ ​ ​ ​ ​ Approximate Size ​ ​ ​ ​ (Building) in ​ ​ ​ ​ Location ​ Square Meters ​ Primary Use ​ Lease Term (years) Shanghai, China 26,745 Office, Lotus center, experience store 1 to 10 years Wuhan, China 18,423 Office, Lotus center, experience store 1 to over 10 years Ningbo, China 9,389 Office 5 years Hangzhou, China 8,319 Office, VIP room 1 to 3 years Beijing, China 4,803 Lotus center, experience store 2.5 to 8.5 years London, U.K. 2,197 Office Less than 1 year to 10 years Coventry, U.K. 2,700 Office 5 years Paris, France 2,596 Experience store, Lotus center, office 6 to 10 years Amsterdam, Netherlands 2,795 Office 6.5 to 15 years Houten, Netherlands 802 Lotus center, office 5 to 10 years Oslo, Norway 1,170 Experience store, fulfillment center 2 to 8 years Munich, Germany 475 Office, experience store, fulfillment center Less than 1 year to 2 years Frankfurt, Germany 7,551 Office, workshop 10 to 12 years Gothenburg, Sweden 40 Office Less than 1 year Milan, Italy 40 Office Less than 1 year ​ In October 2023, the WFOE pledged the land use rights, buildings and ancillary facilities on certain pieces of land totaling approximately 84,000 square meters where our global headquarters is located in Wuhan, China to the Jingkai Fund pursuant to an exchangeable note agreement entered into between the WFOE and the Jingkai Fund in September 2021.
We believe that our existing facilities are generally adequate to meet our current needs, but we expect to seek additional space as needed to accommodate future growth. ​ ​ ​ ​ ​ ​ ​ ​ Approximate Size ​ ​ ​ ​ (Building) in ​ ​ ​ ​ Location ​ Square Meters ​ Primary Use ​ Lease Term (years) Shanghai, China 35,751 Office, Lotus center, experience store ​ Less than 10 years Wuhan, China 10,485 Office, Lotus center, experience store ​ 1 to 11 years Ningbo, China 9,389 Office ​ 5 years Hangzhou, China 14,725 Office, VIP room ​ Less than 3 years Beijing, China 4,171 Office, experience store ​ 2.5 to 8.5 years London, U.K. 1,732 Office ​ 10 years Coventry, U.K. 1,000 Office ​ Less than 1 year Paris, France 2,592 Experience store, Lotus center, office ​ 6 to 10 years Amsterdam, Netherlands 2,795 Office ​ 6.5 to 15 years Houten, Netherlands 802 Lotus center, office ​ 5 to 10 years Oslo, Norway 1,170 Experience store, fulfillment center, office ​ 2 to 8 years Munich, Germany 315 Office, experience store ​ Less than 2 years Milan, Italy ​ 40 ​ Office ​ Less than 1 year Singapore, SG ​ 18 ​ Office ​ Less than 1 year Tokyo, Japan ​ 23 ​ Office ​ Less than 1 year Dubai, UAE 300 Office ​ 1 year ​ In October 2023, the WFOE pledged the land use rights, buildings and ancillary facilities on certain pieces of land totaling approximately 84,000 square meters where our global headquarters is located in Wuhan, China to the Jingkai Fund pursuant to an exchangeable note agreement entered into between the WFOE and the Jingkai Fund in September 2021.
If the OTA method fails to effectively eliminate defects or cause new defects, the producer shall take recall measures again. 93 Table of Contents According to the Notice on the Filing of Online Upgrade of Automotive Software promulgated and implemented by the Ministry of Industry and Information Technology Equipment Industry Development Center on April 15, 2022, filing shall be made for a vehicle manufacturer that has obtained the manufacturing permission license for road vehicles, the vehicle products with OTA upgrade function produced by it and the OTA upgrade activities conducted, with tiered filing based on the impact assessment of specific upgrading activities.
According to the Notice on the Filing of Online Upgrade of Automotive Software promulgated and implemented by the Ministry of Industry and Information Technology Equipment Industry Development Center on April 15, 2022, filing shall be made for a vehicle manufacturer that has obtained the manufacturing permission license for road vehicles, the vehicle products with OTA upgrade function produced by it and the OTA upgrade activities conducted, with tiered filing based on the impact assessment of specific upgrading activities.
According to the Notice on the Measures for Invigorating Automobile Circulation and Boosting Automobile Consumption issued by 17 departments including the Ministry of Commerce on July 5, 2022, it provided to (i) support the purchase and use of new energy vehicles; (ii) accelerate the activation of the second-hand cars market; (iii) promote vehicle renewal consumption; (iv) promote the sustainable and healthy development of the parallel import of vehicles; (v) optimize the environment for vehicle use; (vi) enrich vehicle financing services. 99 Table of Contents In addition, various provinces and cities have also actively responded and introduced tailor-made local polices for promoting vehicle consumption.
According to the Notice on the Measures for Invigorating Automobile Circulation and Boosting Automobile Consumption issued by 17 departments including the Ministry of Commerce on July 5, 2022, it provided to (i) support the purchase and use of new energy vehicles; (ii) accelerate the activation of the second-hand cars market; (iii) promote vehicle renewal consumption; (iv) promote the sustainable and healthy development of the parallel import of vehicles; (v) optimize the environment for vehicle use; (vi) enrich vehicle financing services.
In Europe, we are partnering with a leading platform which provides our customers with extensive charger network that covers across Europe. We also offer home charging solutions for owners of our vehicles. In China, we provide home charging solutions and partner with leading suppliers that have charging network across the country.
In Europe, the US and ROW markets, we are partnering with leading platforms that provide our customers with an extensive charger network. We also offer home charging solutions for owners of our vehicles. In China, we provide home charging solutions and partner with leading suppliers that have charging network across the country.
As of the date of this annual report, the Regulations have not been formally adopted. 103 Table of Contents Personal Privacy Protection Under the Several Provisions on Regulating the Market Order of Internet Information Services issued by the Ministry of Industry and Information Technology on December 29, 2011 and effective on March 15, 2012, the Decision on Strengthening the Protection of Online Information issued by the Standing Committee of the National People’s Congress and implemented on December 28, 2012, the Order for the Protection of Telecommunications and Internet User Personal Information issued by the Ministry of Industry and Information Technology and implemented on July 16, 2013, and the PRC Cybersecurity Law issued by the Standing Committee of the National People’s Congress on November 7, 2016 and implemented on June 1, 2017, any collection and use of a user’s personal information must be legal, rational and necessary, and the user should be clearly notified the purposes, methods and scopes of collecting and using information, channels for enquiring and correcting information, and the consequence of refusal to provide information.
“Network data processing activities” refers to the collection, retention, use, processing, transmission, provision, disclosure, deletion, and other activities of network data. 100 Table of Contents Personal Privacy Protection Under the Several Provisions on Regulating the Market Order of Internet Information Services issued by the Ministry of Industry and Information Technology on December 29, 2011 and effective on March 15, 2012, the Decision on Strengthening the Protection of Online Information issued by the Standing Committee of the National People’s Congress and implemented on December 28, 2012, the Order for the Protection of Telecommunications and Internet User Personal Information issued by the Ministry of Industry and Information Technology and implemented on July 16, 2013, and the PRC Cybersecurity Law issued by the Standing Committee of the National People’s Congress on November 7, 2016 and implemented on June 1, 2017, any collection and use of a user’s personal information must be legal, rational and necessary, and the user should be clearly notified the purposes, methods and scopes of collecting and using information, channels for enquiring and correcting information, and the consequence of refusal to provide information.
We are also responsible for providing branding, marketing, and public relations services in relation to Lotus-branded products. 80 Table of Contents Under the Distribution Agreement, we are generally responsible for procuring licenses and permits and fulfilling other procedures and formalities required to import the vehicles, while Lotus UK is responsible for obtaining homologation, also referred to as vehicle approval or type approval, of new sports car vehicle models.
Under the Distribution Agreement, we are generally responsible for procuring licenses and permits and fulfilling other procedures and formalities required to import the vehicles, while Lotus UK is responsible for obtaining homologation, also referred to as vehicle approval or type approval, of new sports car vehicle models.
If any automobile producer conceals a defect, refuses to recall by order or fails to stop producing or selling or importing the defective automobile products, it will be ordered to make a correction and subject to fines. Any illegal income will be confiscated, and in severe cases, the permit will be revoked by the licensing authority.
If any automobile producer conceals a defect, refuses to recall by order or fails to stop producing or selling or importing the defective automobile products, it will be ordered to make a correction and subject to fines.
On October 23, 2019, SAFE issued the Circular on Further Promoting Cross-Border Trade and Investment Facilitation. This circular allows foreign-invested enterprises whose approved business scopes do not contain equity investment to use their capital obtained from foreign exchange settlement to make domestic equity investment as long as the investment is real and complies with the foreign investment-related laws and regulations.
This circular allows foreign-invested enterprises whose approved business scopes do not contain equity investment to use their capital obtained from foreign exchange settlement to make domestic equity investment as long as the investment is real and complies with the foreign investment-related laws and regulations.
Our customers are offered a wide range of options for customization, including exterior, interior, and other functions and features. Our customers can also reserve test-driving sessions and have access to our digital payment system and aftersales services and software updates.
We also create online forums in various geographic markets for customers to engage, search, communicate and interact. Our customers are offered a wide range of options for customization, including exterior, interior, and other functions and features. Our customers can also reserve test-driving sessions and have access to our digital payment system and aftersales services and software updates.
As of December 31, 2023, we had 215 stores in our global distribution network.
As of December 31, 2024, we had over 200 stores in our global distribution network.
By combining our powerful algorithms, HD cameras, radars and high-precision mapping capabilities, our vehicles are able to precisely perceive their surroundings in stereoscopic display. Our vehicles then dynamically react to their perceived surroundings by leveraging our customized planning and control algorithms.
By combining our powerful algorithms, HD cameras, radars and high-precision mapping capabilities, our vehicles are able to precisely perceive their surroundings in stereoscopic display. Our vehicles then dynamically react to their perceived surroundings by leveraging our customized planning and control algorithms. Taken together, our intelligent driving solution offers smooth and intelligent driving experience to drivers, even under extreme road conditions.
In addition, the completion of any overseas follow-on offerings by an issuer in the same overseas market where it has completed its public offering and listing would necessitate a filing with CSRC within three business days thereafter. 114 Table of Contents CSRC also published the Notice on the Overseas Listing Filing and the set of Q&A published on CSRC’s official website, which are in connection with the release of the Overseas Listing Filing Rules.
In addition, the completion of any overseas follow-on offerings by an issuer in the same overseas market where it has completed its public offering and listing would necessitate a filing with CSRC within three business days thereafter.
This architecture uses aluminum and high tensile steel for optimal structural rigidity. The EPA’s battery system enables intelligent heat management operating system for maximum energy conservation. Equipped with all-wheel drive and electric motor, Eletre can deliver a top speed of 265 km per hour with a maximum of 985 Nm of torque and it can reach up to 905 hp.
The EPA’s battery system enables intelligent heat management operating system for maximum energy conservation. Equipped with all-wheel drive and electric motor, Eletre can deliver a top speed of 265 km per hour with a maximum of 985 Nm of torque and it can reach up to 905 hp. The EPA adopts a highly adaptable design and inherits our light-weight philosophy.
According to the Implementation Rules on the Administrative Provisions on Defective Automotive Product Recalls amended on October 23, 2020, the State Administration for Market Regulation is responsible for the supervision and administration of recalls of defective automobile products nationwide.
Any illegal income will be confiscated, and in severe cases, the permit will be revoked by the licensing authority. 90 Table of Contents According to the Implementation Rules on the Administrative Provisions on Defective Automotive Product Recalls amended on October 23, 2020, the State Administration for Market Regulation is responsible for the supervision and administration of recalls of defective automobile products nationwide.
Intelligent Driving Lotus Intelligent Driving research and development commenced as early as 2018. We are committed to building the best platform for advanced intelligent driving technologies and have strong in house research and development capabilities , which includes cognition, decision, planning and control.
We are committed to building the best platform for advanced intelligent driving technologies and have strong in house research and development capabilities, which includes cognition, decision, planning and control. We support end-to-end intelligent driving technologies with expertise in best-in-class hardware, advanced software and algorithms, and powerful cloud solutions.
Our omni-channel sales model is customer-oriented, where our customers can both access our online platform to customize their vehicles, make payments, and order for aftersales services, and come visit us in person, consult our sales team, and reserve for test-driving sessions. 87 Table of Contents Our marketing department is responsible for building our brand and corporate image, promoting products, facilitating best-in-class customer experience, and providing information regarding our products, strategies, and technology through our omni-channel sales model.
Our omni-channel sales model is customer-oriented, where our customers can both access our online platform to customize their vehicles, make payments, and order for aftersales services, and come visit us in person, consult our sales team, and reserve for test-driving sessions.
As of December 31, 2023, our R&D team consisted of 1,802 professionals with extensive knowledge in automotive, engineering, software, AI as well as diversified working experiences from leading vehicle manufacturers globally. Such composition ensures solid technology development capabilities, especially in intelligence and digitalization.
Guided by our R&D leaders, our global research and development team has extensive experience in automotive and technology industries. As of December 31, 2024, our R&D team consisted of 1,030 professionals with extensive knowledge in automotive, engineering, software, AI as well as diversified working experiences from leading vehicle manufacturers globally.

… 122 more changes not shown on this page.

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

74 edited+41 added−23 removed77 unchanged
Biggest changeThe difference between our net cash used in operating activities and our net loss of US$110.5 million for the same year from continuing operations was attributable to certain non-cash items, primarily consisting of amortization of deferred income relating to government grants of US$490.5 million, and certain changes in working capital accounts that increase operating cash flows, primarily consisting of (i) increase in accrued expenses and other current liabilities due to related parties of US$401.3 million primarily attributable to the increase in the payroll and consumable materials for R&D expenditures incurred in the Lotus BEV business unit of Ningbo Geely R&D and R&D support service fee due to Ningbo Geely R&D, (ii) increase in accrued expenses and other current liabilities due to third parties of US$84.7 million due to the increased accrued payroll and payable for other operating expenditures, (iii) decrease in prepayments and other current assets due from related parties of US$83.2 million primarily attributable to the refund of R&D service fees from Ningbo Geely R&D, and (iv) decrease in operating lease liabilities of US$55.4 million primarily attributable to prepaid land use rights.
Biggest changeThe difference between our net cash used in operating activities and our net loss of US$1,107.3 million for the same period from continuing operations was attributable to certain non-cash items, primarily consisting of changes in fair values of liabilities, excluding impact of instrument-specific credit risk of US$285.4 million, depreciation of US$76.5 million, share-based compensation expense of US$31.9 million, warranty expenses of US$21.9 million, and certain changes in working capital accounts, primarily consisting of (i) increase in accounts receivable due from third parties of US$67.3 million and due from related parties of US$88.8 million, primarily attributable to the increase of sales of BEV lifestyle models and Lotus-brand sports cars to third-party and related-party distributors and the scale of facilitation services in relation to logistics and order processing, (ii) increase in accounts payable due to related parties of US$76.3 million primarily attributable to the increase in purchase of BEV lifestyle models and Lotus-brand sports cars, (iii) increase in accounts payable due to third parties of US$43.7 million primarily attributable to the increase in purchase of spare parts, logistic services and outsourcing manpower fee, (iv) decrease in inventories of US$69.7 million primarily attributable to the destock, (v) decrease in accrued expenses and other current liabilities due to related parties of US$55.9 million primarily attributable to the settlement of outsourced R&D services, and (vi) decrease in prepayments and other current assets due to related parties of US$46.6 million primarily attributable to the settlement of R&D service balances, salary payables and reduction of refundable deposits from customers.
Operating activities For the year ended December 31, 2023, net cash used in operating activities was US$386.9 million.
For the year ended December 31, 2023, net cash used in operating activities was US$386.9 million.
Cost of services generally includes cost of direct parts, materials, costs associated with providing extended warranty service and after-sales services, depreciation of associated assets used for providing services, labor costs, rental expenses, consumed materials, and depreciation of associated assets used for providing the automotive design and development services.
Cost of services generally includes cost of direct parts, materials, costs associated with providing extended warranty service and after - sales services, depreciation of associated assets used for providing services, labor costs, outsourcing expenses, rental expenses, consumed materials, and depreciation of associated assets used for providing the automotive design and development services.
Our subsidiaries in the U.K., Netherlands, and Germany are also subject to income tax. The maximum applicable income tax rates in the U.K. are 19% for the period from January to March 2023, 25% for the period from April to December 2023, 19% for 2022 and 19% for 2021.
Our subsidiaries in the U.K., Netherlands, and Germany are also subject to income tax. The maximum applicable income tax rates in the U.K. are 25% for 2024, 19% for the period from January to March 2023, 25% for the period from April to December 2023, 19% for 2022 and 19% for 2021.
We believe that adjusted net loss and adjusted EBITDA provide useful information about our operating results, enhance the overall understanding of our past performance and future prospects and allow for greater visibility with respect to key metrics used by our management in its financial and operational decision making. 129 Table of Contents Adjusted net loss and adjusted EBITDA should not be considered in isolation or construed as alternatives to net loss or any other measures of performance or as indicators of our operating performance.
We believe that adjusted net loss and adjusted EBITDA provide useful information about our operating results, enhance the overall understanding of our past performance and future prospects and allow for greater visibility with respect to key metrics used by our management in its financial and operational decision making. ​ 126 Table of Contents Adjusted net loss and adjusted EBITDA should not be considered in isolation or construed as alternatives to net loss or any other measures of performance or as indicators of our operating performance.
There is an anti-fragmentation measure where each group will have to elect only one company in the group to benefit from the progressive rates. No provision for Hong Kong profits tax has been made in the financial statements as the subsidiary in Hong Kong have no assessable profits for the years ended December 31, 2023, 2022 and 2021.
There is an anti-fragmentation measure where each group will have to elect only one company in the group to benefit from the progressive rates. No provision for Hong Kong profits tax has been made in the financial statements as the subsidiary in Hong Kong have no assessable profits for the years ended December 31, 2024, 2023 and 2022.
We expect to continue to strategically incur selling and marketing expenses in strengthening our brand image and expanding sales channels and expanding stores globally. 126 Table of Contents General and administrative expenses primarily consist of labor costs, day-to-day administrative expenses, depreciation and amortization expenses, professional service fees, and other general corporate expenses.
We expect to continue to strategically incur selling and marketing expenses in strengthening our brand image and expanding sales channels and expanding stores globally. ​ 123 Table of Contents General and administrative expenses primarily consist of labor costs, day-to-day administrative expenses, depreciation and amortization expenses, professional service fees, and other general corporate expenses.
Material cash requirements Other than the ordinary cash requirements for our operations, our material cash requirements as of December 31, 2023 and any subsequent interim period primarily include our capital expenditures, purchase commitment and operating lease obligation. Our capital expenditures are primarily incurred for purchase of property, equipment and software and intangible assets.
Material cash requirements Other than the ordinary cash requirements for our operations, our material cash requirements as of December 31, 2024 and any subsequent interim period primarily include our capital expenditures, purchase commitment and operating lease obligation. Our capital expenditures are primarily incurred for purchase of property, equipment and software and intangible assets.
For the years ended December 31, 2023, 2022 and 2021, the WFOE collected advances of nil, US$10.6 million and nil, from the former VIE. For the years ended December 31, 2023, 2022 and 2021, US$1.7 million, US$3.3 million and nil of service fees were paid by the former VIE and its subsidiaries to the subsidiaries of Lotus Technology Inc.
For the years ended December 31, 2024, 2023 and 2022, the WFOE collected advances of nil, nil and US$10.6 million from the former VIE. For the years ended December 31, 2024, 2023 and 2022, nil, US$1.7 million and US$3.3 million of service fees were paid by the former VIE and its subsidiaries to the subsidiaries of Lotus Technology Inc.
Trend Information Other than as disclosed elsewhere in this annual report, we are not aware of any trends, uncertainties, demands, commitments or events since January 1, 2024 that are reasonably likely to have a material and adverse effect on our total revenues, income, profitability, liquidity or capital resources, or that would cause the disclosed financial information to be not necessarily indicative of future results of operations or financial conditions.
Trend Information Other than as disclosed elsewhere in this annual report, we are not aware of any trends, uncertainties, demands, commitments or events since January 1, 2024 that are reasonably likely to have a material and adverse effect on our total revenues, income, profitability, liquidity or capital resources, or that would cause the disclosed financial information to be not necessarily indicative of future results of operations or financial conditions. 140 Table of Contents E.
We do not have any variable interest in any unconsolidated entity that provides financing, liquidity, market risk, or credit support to us or engages in leasing, hedging, or product development services with us. Holding Company Structure Lotus Technology Inc. is a holding company with no material operations of its own.
We do not have any variable interest in any unconsolidated entity that provides financing, liquidity, market risk, or credit support to us or engages in leasing, hedging, or product development services with us. 139 Table of Contents Holding Company Structure Lotus Technology Inc. is a holding company with no material operations of its own.
Our research and development expenses decreased by US$77.1 million from US$445.8 million for the year ended December 31, 2022 to US$368.7 million for the year ended December 31, 2023 primarily due to phase down of R&D activities for the Eletre and Emeya models . 131 Table of Contents Selling and marketing expenses .
Our research and development expenses decreased by US$77.1 million from US$445.8 million for the year ended December 31, 2022 to US$368.7 million for the year ended December 31, 2023 primarily due to phase down of R&D activities for the Eletre and Emeya models . Selling and marketing expenses .
The difference between our net cash used in operating activities and our net loss of US$750.3 million for the same period from continuing operations was attributable to certain non-cash items, primarily consisting of depreciation of US$55.0 million, and certain changes in working capital accounts, primarily consisting of (i) increase in accounts payable due to related parties of US$335.3 million primarily attributable to the increase in purchase of BEV lifestyle models and Lotus-brand sports cars, (ii) increase in inventories of US$235.1 million primarily attributable to the increase of vehicles available for sale and time required for international shipment and clearance for vehicles to be sold globally, (iii) increase in accrued expenses and other current liabilities due to third parties of US$124.1 million primarily attributable to the increased salary payables and refundable deposits from customers, (iv) increase in accrued expenses and other current liabilities due to related parties of US$89.9 million primarily attributable to the acquisition of the distribution right and the increase of outsourced R&D services, (v) increase in other non-current liabilities due to third parties of US$81.7 million primarily attributable to the conditional and refundable government grants received, and (vi) increase in accounts receivable due from third parties of US$75.3 million primarily attributable to the increase of sales of BEV lifestyle models and Lotus-brand sports cars to third-party distributors. 138 Table of Contents For the year ended December 31, 2022, net cash used in operating activities was US$351.4 million.
The difference between our net cash used in operating activities and our net loss of US$750.3 million for the same period from continuing operations was attributable to certain non-cash items, primarily consisting of depreciation of US$55.0 million, and certain changes in working capital accounts, primarily consisting of (i) increase in accounts payable due to related parties of US$335.3 million primarily attributable to the increase in purchase of BEV lifestyle models and Lotus-brand sports cars, (ii) increase in inventories of US$235.1 million primarily attributable to the increase of vehicles available for sale and time required for international shipment and clearance for vehicles to be sold globally, (iii) increase in accrued expenses and other current liabilities due to third parties of US$124.1 million primarily attributable to the increased salary payables and refundable deposits from customers, (iv) increase in accrued expenses and other current liabilities due to related parties of US$89.9 million primarily attributable to the acquisition of the distribution right and the increase of outsourced R&D services, (v) increase in other non-current liabilities due to third parties of US$81.7 million primarily attributable to the conditional and refundable government grants received, and (vi) increase in accounts receivable due from third parties of US$75.3 million primarily attributable to the increase of sales of BEV lifestyle models and Lotus-brand sports cars to third-party distributors.
For the years ended December 31, 2023, 2022 and 2021, Lotus Technology Inc. provided loans with principal amount of US$231.6 million, US$5.9 million and nil to its subsidiaries, and made capital contribution of US$302.3 million, US$94.7 million and nil to its subsidiaries.
For the years ended December 31, 2024, 2023 and 2022, Lotus Technology Inc. provided loans with principal amount of US$94.6 million, US$231.6 million and US$5.9 million to its subsidiaries, and made capital contribution of US$915.6 million, US$302.3 million and US$94.7 million to its subsidiaries.
The maximum applicable income tax rate in the Netherlands is 25.8% for the years ended December 31, 2023, 2022 and 2021. In Germany, the maximum applicable income tax rate for corporation tax is 15.825% for 2023, 2022 and 2021, while the maximum applicable income tax rate for trade tax is 14.35% for 2023, 14.35% for 2022 and 13.825% for 2021.
The maximum applicable income tax rate in the Netherlands is 25.8% for the years ended December 31, 2024, 2023 and 2022. In Germany, the maximum applicable income tax rates for corporation tax is 15.825% for 2024, 2023 and 2022, while the maximum applicable income tax rate for trade tax is 14.35% for 2024, 2023 and 2022.
The net change in foreign currency exchange losses was primarily attributable to fluctuations in exchange rates between U.S. dollar and RMB.
The net change in foreign currency exchange losses was primarily attributable to fluctuations in exchange rates between U.S. dollar and RMB, between U.S. dollar and GBP, as well as between GBP and RMB.
Our purchase commitment primarily consists of future minimum purchase commitment related to the purchase of BEV lifestyle models, Lotus-brand sports cars and research and development services and other operating expenses. As of December 31, 2023, our purchase commitment was US$182.0 million.
Our purchase commitment primarily consists of future minimum purchase commitment related to the purchase of BEV lifestyle models, Lotus-brand sports cars and research and development services and other operating expenses. As of December 31, 2024, our purchase commitment was US$101.1 million.
Changes in fair values of mandatorily redeemable noncontrolling interest, exchangeable notes and convertible notes, excluding impact of instrument-specific credit risk We recorded losses in changes in fair value of US$23.0 million for the year ended December 31, 2022, primarily due to the recognition of losses from changes in fair value of mandatorily redeemable noncontrolling interest of US$5.6 million, exchangeable notes of US$13.2 million and convertible notes of US$4.3 million.
Changes in fair values of mandatorily redeemable noncontrolling interest, exchangeable notes and convertible notes, excluding impact of instrument-specific credit risk We recorded losses in changes in fair value of US$7.5 million for the year ended December 31, 2023, primarily due to the recognition of losses from changes in fair value of mandatorily redeemable noncontrolling interest of US$0.1 million, exchangeable notes of US$4.4 million and convertible notes of US$3.0 million.
We expect that our cost of revenues will increase in absolute amounts in the foreseeable future as we continue to expand our business globally. 125 Table of Contents The following table sets forth a breakdown of our cost of revenues by nature both in absolute amount and as a percentage of our cost of revenues for the years indicated. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ For the Years Ended December 31, ​ ​ 2023 ​ 2022 ​ 2021 ​ ​ US$ ​ % ​ US$ ​ % ​ US$ ​ % ​ ​ (in thousands, except percentages) Cost of revenues Cost of goods sold (564,741) 97.9 (948) 13.1 (331) 10.6 Cost of services (12,086) 2.1 (6,302) 86.9 (2,799) 89.4 Total (576,827) 100.0 (7,250) 100.0 (3,130) 100.0 ​ Gross profit and gross margin The following table sets forth our gross profit for the years indicated. ​ ​ ​ ​ ​ ​ ​ ​ ​ For the Years Ended ​ ​ December 31, ​ ​ 2023 ​ 2022 ​ 2021 ​ ​ US$ ​ US$ ​ US$ ​ ​ (in thousands, except percentages) Gross profit 102,181 2,307 557 Gross margin (%) 15.0 24.1 15.1 ​ Operating expenses Our operating expenses consist of (i) research and development expenses, (ii) selling and marketing expenses, (iii) general and administrative expenses, and (iv) government grants.
We expect that our cost of revenues will increase in absolute amounts in the foreseeable future as we continue to expand our business globally. 122 Table of Contents The following table sets forth a breakdown of our cost of revenues by nature both in absolute amount and as a percentage of our cost of revenues for the years indicated. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ For the Years Ended December 31, ​ ​ 2024 ​ 2023 ​ 2022 ​ ​ US$ ​ % ​ US$ ​ % ​ US$ ​ % ​ ​ (in thousands, except percentages) Cost of revenues Cost of goods sold (867,061) 96.9 (564,741) 97.9 (948) 13.1 Cost of services (27,662) 3.1 (12,086) 2.1 (6,302) 86.9 Total (894,723) 100.0 (576,827) 100.0 (7,250) 100.0 ​ Gross profit and gross margin The following table sets forth our gross profit for the years indicated. ​ ​ ​ ​ ​ ​ ​ ​ ​ For the Years Ended ​ ​ December 31, ​ ​ 2024 ​ 2023 ​ 2022 ​ ​ US$ ​ US$ ​ US$ ​ ​ (in thousands, except percentages) Gross profit 29,626 102,181 2,307 Gross margin (%) 3.2 15.0 24.1 ​ Operating expenses Our operating expenses consist of (i) research and development expenses, (ii) selling and marketing expenses, (iii) general and administrative expenses, and (iv) government grants.
Operating Results We are a pioneering luxury BEV maker that designs, develops luxury lifestyle vehicles (non-sports car vehicles for daily usage) under the iconic British brand “Lotus” and sell all Lotus branded cars. We have established a successful track record since our inception.
Operating Results We are a leading global intelligent and luxury mobility provider that designs, develops luxury lifestyle vehicles (non-sports car vehicles for daily usage) under the iconic British brand “Lotus” and sell all Lotus branded cars. We have established a successful track record since our inception.
Our total capital expenditures were US$213.7 million, US$133.3 million and US$34.6 million for the years ended December 31, 2023, 2022 and 2021, respectively. We will continue to make capital expenditures to meet the needs of our business operations. As of December 31, 2023, our capital expenditure commitment was US$59.6 million.
Our total capital expenditures were US$57.3 million, US$213.7 million and US$133.3 million for the years ended December 31, 2024, 2023 and 2022, respectively. We will continue to make capital expenditures to meet the needs of our business operations. As of December 31, 2024, our capital expenditure commitment was US$28.8 million.
The following table sets forth a breakdown of revenues by type both in absolute amount and as a percentage of our revenues for the years indicated. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ For the Years Ended December 31, ​ ​ 2023 ​ 2022 ​ 2021 ​ US$ % ​ US$ % ​ US$ % ​ ​ (in thousands, except percentages) Revenues ​ Sales of goods ​ 660,158 97.2 1,186 12.4 369 10.0 Services revenues ​ 18,850 2.8 8,371 87.6 3,318 90.0 Total ​ 679,008 100.0 9,557 100.0 3,687 100.0 ​ Cost of revenues Our cost of revenues can be categorized as cost of goods sold and cost of services.
The following table sets forth a breakdown of revenues by type both in absolute amount and as a percentage of our revenues for the years indicated. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ For the Years Ended December 31, ​ ​ 2024 ​ 2023 ​ 2022 ​ US$ % ​ US$ % ​ US$ % ​ ​ (in thousands, except percentages) Revenues ​ Sales of goods ​ 891,061 96.4 660,158 97.2 1,186 12.4 Services revenues ​ 33,288 3.6 18,850 2.8 8,371 87.6 Total ​ 924,349 100.0 679,008 100.0 9,557 100.0 ​ Cost of revenues Our cost of revenues can be categorized as cost of goods sold and cost of services.
Dividends paid by our wholly foreign-owned subsidiary in China to our intermediary holding company in Hong Kong will be subject to a withholding tax rate of 10%, unless the Hong Kong entity satisfies all the requirements under the Arrangement between Mainland China and Hong Kong for the Avoidance of Double Taxation and the Prevention of Fiscal Evasion with respect to Taxes on Income and receives approval from the tax authority.
We are also subject to surcharges on VAT payments in accordance with PRC tax regulations. ​ 124 Table of Contents Dividends paid by our wholly foreign-owned subsidiary in China to our intermediary holding company in Hong Kong will be subject to a withholding tax rate of 10%, unless the Hong Kong entity satisfies all the requirements under the Arrangement between Mainland China and Hong Kong for the Avoidance of Double Taxation and the Prevention of Fiscal Evasion with respect to Taxes on Income and receives approval from the tax authority.
We recorded a net loss of US$750.3 million, US$724.6 million and US$110.5 million in 2023, 2022, and 2021, respectively. Revenues We generate revenues primarily through sales of goods and services. Sales of goods.
We recorded a net loss of US$724.6 million, US$750.3 million and US$1,107.3 million, in 2022, 2023 and 2024, respectively. Revenues We generate revenues primarily through sales of goods and services. Sales of goods.
For the years ended December 31, 2023, 2022 and 2021, the WFOE provided loans with principal amount of US$316.7 million, US$49.6 million and nil to its subsidiaries, and made capital contribution of US$22.3 million, US$137.2 million and US$108.9 million to its subsidiaries.
For the years ended December 31, 2024, 2023 and 2022, the WFOE provided loans with principal amount of US$659.6 million, US$316.7 million and US$49.6 million to its subsidiaries, and made capital contribution of US$48.0 million, US$22.3 million and US$137.2 million to its subsidiaries.
As of December 31, 2023, we had 3,180 full-time employees globally, including in China and Europe, among which approximately 56.7% belong to our R&D division. 124 Table of Contents Our total revenues increased from US$9.6 million for the year ended December 31, 2022 to US$679.0 million for the year ended December 31, 2023.
As of December 31, 2024, we had 1,996 full-time employees globally, including in China and Europe, among which approximately 52% belong to our R&D division. 121 Table of Contents Our total revenues increased from US$9.6 million for the year ended December 31, 2022 to US$679.0 million for the year ended December 31, 2023 and again to US$924.3 million for the year ended December 31, 2024.
We generate revenues by providing the following products: ● BEV lifestyle models developed by us; ● Lotus-brand sports cars developed by Lotus UK; ● auto parts; and ● peripheral products. Services. We generate revenues by providing automotive design and development services to OEM customers.
We generate revenues by providing the following products: ● BEV lifestyle models developed by us; ● Lotus-brand sports cars developed by Lotus UK; ● auto parts; and ● peripheral products. Services.
The effective income tax rate for the years ended December 31, 2023 and 2022 differs from the applicable statutory income tax rate, primarily due to the recognition of full valuation allowance for deferred income tax assets of loss-making entities.
The effective income tax rate for the years ended December 31, 2024 and 2023 was negative 0.18% and negative 0.15%, respectively. The effective income tax rate for the years ended December 31, 2024 and 2023 differs from the applicable statutory income tax rate, primarily due to the recognition of full valuation allowance for deferred income tax assets of loss-making entities.
We had cash and restricted cash of US$427.1 million, US$739.5 million and US$531.5 million as of December 31, 2023, 2022 and 2021, respectively. Cash and restricted cash from continuing operations comprise cash at bank and on hand and deposits made to banks to secure bank acceptance notes, a letter of guarantee, and deposits made to landlords for certain long-term leases.
We had cash and restricted cash of US$484.9 million, US$427.1 million and US$739.5 million as of December 31, 2024, 2023 and 2022, respectively. Cash and restricted cash from continuing operations comprise cash at bank and on hand and deposits made to banks to secure bank acceptance notes, deposits for short-term borrowings, and deposits for certain long-term leases.
Operating loss As a result of the foregoing, we had a loss from operations of US$ 735.9 million for the year ended December 31, 2023, in comparison with a loss from operations of US$ 687.4 million for the year ended December 31, 2022.
As a result of the foregoing, we had a loss from operations of US$786.3 million for the year ended December 31, 2024, in comparison with a loss from operations of US$ 735.9 million for the year ended December 31, 2023.
Liquidity and Capital Resources Cash flows and working capital The following table sets forth a summary of our cash flows for the years indicated. ​ ​ ​ ​ ​ ​ ​ ​ ​ For the Years Ended December 31, ​ ​ 2023 ​ 2022 ​ 2021 ​ ​ US$ ​ US$ ​ US$ ​ ​ (in thousands) Summary Consolidated and Combined Cash Flow Data Net cash used in operating activities (386,932) (351,419) (126,505) Net cash (used in) provided by investing activities (197,985) (149,414) 244,476 Net cash provided by financing activities 284,708 758,131 364,853 Effect of exchange rate changes on cash and restricted cash (12,189) (49,217) 2,943 Net (decrease) increase in cash and restricted cash (312,398) 208,081 485,767 Cash and restricted cash at the beginning of the year 739,533 531,452 45,685 Cash and restricted cash at the end of the year 427,135 739,533 531,452 ​ 136 Table of Contents To date, we have financed our operating and investing activities primarily through cash generated by bank loans and equity financing activities and capital contributions from our shareholders, including through the issuance of redeemable convertible preferred shares, exchangeable notes, convertible notes and related party borrowings.
Liquidity and Capital Resources Cash flows and working capital The following table sets forth a summary of our cash flows for the years indicated. ​ ​ ​ ​ ​ ​ ​ ​ ​ For the Years Ended December 31, ​ 2024 ​ 2023 ​ 2022 ​ ​ US$ US$ US$ ​ ​ (in thousands) Summary Consolidated and Combined Cash Flow Data ​ Net cash used in operating activities ​ (848,520) (386,932) (351,419) Net cash used in investing activities ​ (579,440) (197,985) (149,414) Net cash provided by financing activities ​ 1,459,527 284,708 758,131 Effect of exchange rate changes on cash and restricted cash ​ 26,235 (12,189) (49,217) Net (decrease) increase in cash and restricted cash ​ 57,802 (312,398) 208,081 Cash and restricted cash at the beginning of the year ​ 427,135 739,533 531,452 Cash and restricted cash at the end of the year ​ 484,937 427,135 739,533 ​ To date, we have financed our operating and investing activities primarily through cash generated by bank loans and equity and debt financing activities and capital contributions from our shareholders, including through the issuance of redeemable convertible preferred shares, exchangeable notes, convertible notes and related party borrowings.
We are currently subject to Value Added Tax, or VAT, mainly at rates of 13% and 6%, respectively, on the products and services we provide, less any creditable input VAT. We are also subject to surcharges on VAT payments in accordance with PRC tax regulations.
We are currently subject to Value Added Tax, or VAT, mainly at rates of 13% and 6%, respectively, on the products and services we provide, less any creditable input VAT.
Each tranche of the exchangeable notes is scheduled to mature on the five-year anniversary date of issuance. With the consent of the investor, each tranche of the exchangeable notes is eligible for two extensions and each extension shall not exceed one year.
Pursuant to the agreement, Lightning Speed is entitled to issue exchangeable notes to obtain financing from the investor. Each tranche of the exchangeable notes is scheduled to mature on the five-year anniversary date of issuance. With the consent of the investor, each tranche of the exchangeable notes is eligible for two extensions and each extension shall not exceed one year.
The following table sets forth a breakdown of our operating expenses both in absolute amount and as a percentage of total operating expenses for the years indicated. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ For the Years Ended December 31, ​ ​ 2023 ​ 2022 ​ 2021 ​ ​ US$ ​ % ​ US$ ​ % ​ US$ ​ % ​ ​ (in thousands, except percentages) Operating expenses Research and development expenses (368,729) 44.0 (445,844) 64.6 (511,364) 450.5 Selling and marketing expenses (328,935) 39.2 (151,331) 22.0 (38,066) 33.5 General and administrative expenses (144,533) 17.2 (148,369) 21.5 (54,763) 48.3 Government grants 4,077 (0.4) 55,824 (8.1) 490,694 (432.3) Total (838,120) 100.0 (689,720) 100.0 (113,499) 100.0 ​ Our research and development expenses primarily consist of labor costs, license fees, outsourced development expenses, materials, rental expenses, depreciation, and other expenses.
The following table sets forth a breakdown of our operating expenses both in absolute amount and as a percentage of total operating expenses for the years indicated. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ For the Years Ended December 31, ​ ​ 2024 ​ 2023 ​ 2022 ​ ​ US$ ​ % ​ US$ ​ % ​ US$ ​ % ​ ​ (in thousands, except percentages) Operating expenses ​ Research and development expenses ​ (274,801) 33.7 (368,729) 44.0 (445,844) 64.6 Selling and marketing expenses ​ (322,310) 39.5 (328,935) 39.2 (151,331) 22.0 General and administrative expenses ​ (227,475) 27.9 (144,533) 17.2 (148,369) 21.5 Government grants ​ 8,638 (1.1) 4,077 (0.4) 55,824 (8.1) Total ​ (815,948) 100.0 (838,120) 100.0 (689,720) 100.0 ​ Our research and development expenses primarily consist of labor costs, license fees, outsourced development expenses, materials, rental expenses, depreciation, and other expenses.
However, approval from or registration with competent government authorities is required where the RMB is to be converted into foreign currency and remitted out of China to pay capital expenses such as the repayment of loans denominated in foreign currencies. The PRC government may at its discretion restrict access to foreign currencies for current account transactions in the future.
However, approval from or registration with competent government authorities is required where the RMB is to be converted into foreign currency and remitted out of China to pay capital expenses such as the repayment of loans denominated in foreign currencies.
In 2023, we delivered a total of 6,970 vehicles, which consisted of our lifestyle vehicles and sportscars distributed through LTIL.
In 2024, we delivered a total of 12,134 vehicles, which consisted of our lifestyle vehicles and sportscars distributed through LTIL.
Financing activities For the year ended December 31, 2023, net cash provided by financing activities was US$284.7 million, which was mainly attributable to (i) proceeds from issuance of exchangeable notes of US$27.9 million, (ii) proceeds from settlement of receivable from shareholders of US$26.1 million, (iii) proceeds from issuance of convertible notes of US$25.3 million, (iv) repayment of mandatorily redeemable noncontrolling interest of US$11.6 million, (v) receipts of refundable deposits in connection with the PIPE investments of US$10.0 million; and (vi) net proceeds from bank loans of US$208.3 million. 139 Table of Contents For the year ended December 31, 2022, net cash provided by financing activities was US$758.1 million, which primarily attributable to (i) proceeds from issuance of exchangeable notes of US$379.0 million, (ii) proceeds from issuance of Series A Preferred Shares of US$187.7 million, (iii) proceeds from issuance of Series Pre-A Preferred Shares of US$129.7 million, (iv) proceeds from issuance of ordinary shares of US$76.1 million, (v) proceeds from issuance of convertible notes of US$75.0 million, (vi) repayment of exchangeable notes for issuance of Series A Preferred Shares of US$57.4 million, and (vii) consideration payment in connection with reorganization of US$50.8 million.
For the year ended December 31, 2023, net cash provided by financing activities was US$284.7 million, which was mainly attributable to (i) proceeds from issuance of exchangeable notes of US$27.9 million, (ii) proceeds from settlement of receivable from shareholders of US$26.1 million, (iii) proceeds from issuance of convertible notes of US$25.3 million, (iv) repayment of mandatorily redeemable noncontrolling interest of US$11.6 million, (v) receipts of refundable deposits in connection with the PIPE investments of US$10.0 million; and (vi) net proceeds from bank loans of US$208.3 million.
For the year ended December 31, 2021, net cash used in operating activities was US$126.5 million.
For the year ended December 31, 2022, net cash used in operating activities was US$351.4 million.
For Germany income tax, the corporate tax rate excludes trade tax, which rate depends on the municipality in which Lotus GmbH conducts its business. 128 Table of Contents Results of Operations The following table sets forth our results of operations with line items in absolute amount for the years indicated. ​ ​ ​ ​ ​ ​ ​ ​ ​ For the Years Ended December 31, ​ ​ 2023 ​ 2022 ​ 2021 ​ ​ US$ ​ US$ ​ US$ ​ ​ (in thousands) Revenues Sales of goods 660,158 1,186 369 Service revenues 18,850 8,371 3,318 Total revenues 679,008 9,557 3,687 Cost of revenues Cost of goods sold (564,741) (948) (331) Cost of services (12,086) (6,302) (2,799) Total cost of revenues (576,827) (7,250) (3,130) Gross profit 102,181 2,307 557 Operating expenses: Research and development expenses (368,729) (445,844) (511,364) Selling and marketing expenses (328,935) (151,331) (38,066) General and administrative expenses (144,533) (148,369) (54,763) Government grants 4,077 55,824 490,694 Total operating expenses (838,120) (689,720) (113,499) Operating loss (735,939) (687,413) (112,942) Interest expenses (10,200) (8,542) (3,615) Interest income 9,204 12,188 6,219 Investment (loss) income, net (1,162) (3,246) 2,229 Share of results of equity method investments (1,048) (2,762) — Foreign currency exchange gains (losses), net 42 (11,505) 798 Changes in fair values of mandatorily redeemable noncontrolling interest, exchangeable notes and convertible notes, excluding impact of instrument-specific credit risk (7,531) (22,991) (1,367) Changes in fair values of put option liabilities (2,508) — — Loss before income taxes (749,142) (724,271) (108,678) Income tax expense (1,113) (292) (1,853) Net loss (750,255) (724,563) (110,531) ​ Non-GAAP Financial Measures We use adjusted net loss and adjusted EBITDA in evaluating our operating results and for financial and operational decision-making purposes.
For Germany income tax, the corporate tax rate excludes trade tax, which rate depends on the municipality in which Lotus GmbH conducts its business. 125 Table of Contents Results of Operations The following table sets forth our results of operations with line items in absolute amount for the years indicated. ​ ​ ​ ​ ​ ​ ​ ​ ​ For the Years Ended December 31, ​ ​ 2024 ​ 2023 ​ 2022 ​ ​ US$ ​ US$ ​ US$ ​ ​ (in thousands) Sales of goods 891,061 660,158 1,186 Service revenues 33,288 18,850 8,371 Total revenues 924,349 679,008 9,557 Cost of revenues ​ ​ ​ Cost of goods sold (867,061) (564,741) (948) Cost of services (27,662) (12,086) (6,302) Total cost of revenues (894,723) (576,827) (7,250) Gross profit 29,626 102,181 2,307 Operating expenses: ​ ​ ​ Research and development expenses (274,801) (368,729) (445,844) Selling and marketing expenses (322,310) (328,935) (151,331) General and administrative expenses (227,475) (144,533) (148,369) Government grants 8,638 4,077 55,824 Total operating expenses (815,948) (838,120) (689,720) Operating loss (786,322) (735,939) (687,413) Interest expenses (58,218) (10,200) (8,542) Interest income 22,289 9,204 12,188 Investment income (losses), net 14,232 (1,162) (3,246) Share of results of equity method investments (171) (1,048) (2,762) Foreign currency exchange gains (losses), net (11,664) 42 (11,505) Changes in fair values of liabilities, excluding impact of instrument-specific credit risk (285,423) (10,039) (22,991) Loss before income taxes (1,105,277) (749,142) (724,271) Income tax expense (2,012) (1,113) (292) Net loss (1,107,289) (750,255) (724,563) ​ Non-GAAP Financial Measures We use adjusted net loss and adjusted EBITDA in evaluating our operating results and for financial and operational decision-making purposes.
Our service revenue increased by US$10.5 million from US$8.4 million for the year ended December 31, 2022 to US$18.9 million for the year ended December 31, 2023, primarily due to the increase in automotive design and development services provided to OEM customers of US$5.8 million and extended and aftersales services revenue for BEV lifestyle models and sports cars of US$4.7 million. 130 Table of Contents Cost of revenues ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ For the Years Ended ​ ​ ​ ​ ​ ​ December 31, ​ ​ ​ ​ ​ ​ 2023 ​ 2022 ​ Change ​ ​ US$ ​ US$ ​ US$ ​ % ​ ​ (in thousands, except percentages) Cost of revenues Cost of goods sold (564,741) (948) 563,793 59,471.8 Cost of services (12,086) (6,302) 5,784 91.8 Total (576,827) (7,250) 569,577 7,856.2 ​ Our cost of revenues increased by US$ 569.6 million from US$7.3 million for the year ended December 31, 2022 to US$ 576.8 million for the year ended December 31, 2023.
Cost of revenues ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ For the Years Ended ​ ​ ​ ​ ​ ​ December 31, ​ ​ ​ ​ ​ ​ 2023 ​ 2022 ​ Change ​ ​ US$ ​ US$ ​ US$ ​ % ​ ​ (in thousands, except percentages) Cost of revenues Cost of goods sold (564,741) ​ (948) ​ 563,793 ​ 59,471.8 Cost of services (12,086) ​ (6,302) ​ 5,784 ​ 91.8 Total (576,827) ​ (7,250) ​ 569,577 ​ 7,856.2 ​ Our cost of revenues increased by US$569.6 million from US$7.3 million for the year ended December 31, 2022 to US$576.8 million for the year ended December 31, 2023.
The table below sets forth a reconciliation of our net loss to adjusted net loss and adjusted EBITDA for the years indicated: ​ ​ ​ ​ ​ ​ ​ ​ ​ For the Years Ended December 31, ​ ​ 2023 ​ 2022 ​ 2021 ​ ​ US$ ​ US$ ​ US$ ​ ​ (in thousands) Net loss (750,255) (724,563) (110,531) Share-based compensation expenses — 10,625 — Adjusted net loss (750,255) (713,938) (110,531) Net loss (750,255) (724,563) (110,531) Interest expenses 10,200 8,542 3,615 Interest income (9,204) (12,188) (6,219) Income tax expense 1,113 292 1,853 Share-based compensation expenses — 10,625 — Depreciation 54,957 12,790 2,056 Adjusted EBITDA (693,189) (704,502) (109,226) ​ Year Ended December 31, 2023 Compared to Year Ended December 31, 2022 Revenues ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ For the Years Ended ​ ​ ​ ​ ​ ​ December 31, ​ ​ ​ ​ ​ ​ 2023 ​ 2022 ​ Change ​ ​ US$ ​ US$ ​ US$ ​ % ​ ​ (in thousands, except percentages) Sales of goods 660,158 1,186 658,972 55,562.6 BEV lifestyle models 465,265 — 465,265 — Sports cars 184,111 828 183,283 22,135.6 Others 10,782 358 10,424 2,911.7 Service revenues 18,850 8,371 10,479 125.2 Total Revenues 679,008 9,557 669,451 7,004.8 ​ Our total revenues increased by US$669.5 million from US$9.6 million for the year ended December 31, 2022 to US$679.0 million for the year ended December 31, 2023, primarily due to the ramp up of sales volume of BEV lifestyle models and the increase in the sales from the distribution of Lotus-brand sports cars, auto parts, and peripheral products, as well as automotive design and development services provided to OEM customers.
Net loss As a result of the foregoing, our net loss increased by US$357.0 million from US$750.3 million for the year ended December 31, 2023 to US$1,107.3 million for the year ended December 31, 2024. 130 Table of Contents Year Ended December 31, 2023 Compared to Year Ended December 31, 2022 Revenues ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ For the Years Ended ​ ​ ​ ​ ​ ​ December 31, ​ ​ ​ ​ ​ ​ 2023 ​ 2022 ​ Change ​ ​ US$ ​ US$ ​ US$ ​ % ​ ​ (in thousands, except percentages) Sales of goods 660,158 1,186 658,972 55,562.6 BEV lifestyle models 465,265 — 465,265 — Sports cars ​ 184,111 ​ 828 ​ 183,283 ​ 22,135.6 Others 10,782 358 10,424 2,911.7 Service revenues 18,850 8,371 10,479 125.2 Total Revenues 679,008 9,557 669,451 7,004.8 ​ Our total revenues increased by US$669.5 million from US$9.6 million for the year ended December 31, 2022 to US$679.0 million for the year ended December 31, 2023, primarily due to the ramp up of sales volume of BEV lifestyle models and the increase in the sales from the distribution of Lotus-brand sports cars, auto parts, and peripheral products, as well as automotive design and development services provided to OEM customers.
Investing activities For the year ended December 31, 2023, net cash used in investing activities was US$198.0 million, which was mainly attributable to (i) payments for purchases of property, equipment and software and intangible assets of US$213.7 million, (ii) payments for purchases of short-term investments of US$38.3 million, (iii) proceeds from sales of short-term investments of US$37.4 million, and (iv) receipts of government grants related to assets of US$16.3 million.
Investing activities For the year ended December 31, 2024, net cash used in investing activities was US$579.4 million, which was mainly attributable to (i) payment for purchase for securities pledged to Meritz of US$500.0 million, and proceeds from sales of securities pledged to Meritz and its interest of US$189.6 million, pursuant to the arrangement of Meritz Investment (ii) payment for loans to related parties of US$262.2 million, (iii) payments for purchases of property, equipment and software and intangible assets of US$57.3 million, (iv) payments for purchases of short-term investments of US$48.2 million, (v) proceeds from sales of short-term investments of US$48.3 million, and (vi) receipts of government grants related to assets of US$28.1 million. ​ 137 Table of Contents For the year ended December 31, 2023, net cash used in investing activities was US$198.0 million, which was mainly attributable to (i) payments for purchases of property, equipment and software and intangible assets of US$213.7 million, (ii) payments for purchases of short-term investments of US$38.3 million, (iii) proceeds from sales of short-term investments of US$37.4 million, and (iv) receipts of government grants related to assets of US$16.3 million.
Gross profit and gross margin ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ For the Years Ended ​ ​ ​ ​ ​ ​ December 31, ​ ​ ​ ​ ​ ​ 2023 ​ 2022 ​ Change ​ ​ US$ ​ US$ ​ US$ ​ % ​ ​ (in thousands, except percentages) Gross profit 102,181 2,307 99,874 42.3 Gross margin (%) 15.0 24.1 — — ​ As a result of the foregoing, our gross profits increased from US$2.3 million for the year ended December 31, 2022 to US$102.2 million for the year ended December 31, 2023 and our gross margin decreased from 24.1% for the year ended December 31, 2022 to 15.0% for the year ended December 31, 2023.
The increase was attributable to the increase in cost of sales from vehicle products of US$553.0 million, auto parts and peripheral products of US$10.8 million, and automotive design and development services provided to OEM customers of US$5.8 million. 131 Table of Contents Gross profit and gross margin ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ For the Years Ended ​ ​ ​ ​ ​ ​ December 31, ​ ​ ​ ​ ​ ​ 2023 ​ 2022 ​ Change ​ ​ US$ ​ US$ ​ US$ ​ % ​ ​ (in thousands, except percentages) Gross profit 102,181 2,307 99,874 42.3 Gross margin (%) 15.0 24.1 — — ​ As a result of the foregoing, our gross profits increased from US$2.3 million for the year ended December 31, 2022 to US$102.2 million for the year ended December 31, 2023 and our gross margin decreased from 24.1% for the year ended December 31, 2022 to 15.0% for the year ended December 31, 2023.
Interest expenses Our interest expenses increased by US$1.7 million from US$8.5 million for the year ended December 31, 2022 to US$10.2 million for the year ended December 31, 2023, primarily due to the increase in bank loan borrowings in 2023.
Interest expenses Our interest expenses increased by US$48.0 million from US$10.2 million for the year ended December 31, 2023 to US$58.2 million for the year ended December 31, 2024, primarily due to an increase in short-term borrowings.
If our Hong Kong subsidiary satisfies all the requirements under the tax arrangement, then the dividends paid to the Hong Kong subsidiary are subject to withholding tax at a preferential rate of 5%. 127 Table of Contents If our company in the Cayman Islands or any of our subsidiaries outside of China were deemed a “resident enterprise” under the PRC Enterprise Income Tax Law, it would be subject to enterprise income tax on its worldwide income at a rate of 25%.
If our company in the Cayman Islands or any of our subsidiaries outside of China were deemed a “resident enterprise” under the PRC Enterprise Income Tax Law, it would be subject to enterprise income tax on its worldwide income at a rate of 25%. See “Item 3. Key Information—D.
We will continue to make cash commitments, including capital expenditures, to support the growth of our business.
We intend to fund our existing and future material cash requirements with our existing cash balance and other financing alternatives. We will continue to make cash commitments, including capital expenditures, to support the growth of our business.
In connection with the Business Combination, 36,597,038 ordinary shares were issued to WFOE Exchangeable Notes Holder following the settlement of the outstanding principal amount of the WFOE Exchangeable Notes to WFOE Exchangeable Notes Holder. Part of our revenues have been, and are expected to continue to be, denominated in RMB.
In connection with the Business Combination, 36,597,038 ordinary shares were issued to WFOE Exchangeable Notes Holder following the settlement of the outstanding principal amount of the WFOE Exchangeable Notes to WFOE Exchangeable Notes Holder. We will require additional liquidity to continue our operations over the next 12 months.
Our operating lease obligation primarily consists of non-cancellable operating lease agreements for certain offices, warehouses, retail and service locations, equipment and vehicles worldwide. As of December 31, 2023, our operating lease obligation was US$ 152.6 million. As of December 31, 2023, the outstanding balance of convertible notes payable was US$ 101.9 million.
Our operating lease obligation primarily consists of non-cancellable operating lease agreements for certain offices, warehouses, retail and service locations, equipment and vehicles worldwide. As of December 31, 2024, our operating lease obligation was US$118,360 million. Our repurchase commitment primarily consists of dealers’ wholesale floor-plan financing of vehicles.
Net loss As a result of the foregoing, our net loss increased by US$25.7 million from US$724.6 million for the year ended December 31, 2022 to US$750.3 million for the year ended December 31, 2023.
The effective income tax rate for the years ended December 31, 2023 and 2022 differs from the applicable statutory income tax rate, primarily due to the recognition of full valuation allowance for deferred income tax assets of loss-making entities. 133 Table of Contents Net loss As a result of the foregoing, our net loss increased by US$25.7 million from US$724.6 million for the year ended December 31, 2022 to US$750.3 million for the year ended December 31, 2023.
For the years ended December 31, 2023, 2022 and 2021, the WFOE repaid loans borrowed from the other subsidiaries in the amounts of US$71.8 million, nil and nil, respectively. For the years ended December 31, 2023, 2022 and 2021, the WFOE paid advances of nil, nil and US$11.1 million to the former VIE.
For the years ended December 31, 2024, 2023 and 2022, the WFOE repaid loans borrowed from the other subsidiaries in the amounts of US$303.4 million, including US$132.8 million in cash and US$170.6 million by Offsetting of claims and debts, US$71.8 million and nil, respectively.
C. Research and Development, Patents and Licenses, etc. See “Item 4. Information on the Company—B. Business Overview—Intellectual Property” of this annual report. D.
Recently Issued Accounting Pronouncements A list of recently issued accounting pronouncements that are relevant to us is included in Note 2 of our consolidated and combined financial statements included elsewhere in this annual report. C. Research and Development, Patents and Licenses, etc. See “Item 4. Information on the Company—B. Business Overview—Intellectual Property” of this annual report. D.
Gross profit and gross margin ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ For the Years Ended ​ ​ ​ ​ ​ ​ December 31, ​ ​ ​ ​ ​ ​ 2022 ​ 2021 ​ Change ​ ​ US$ ​ US$ ​ US$ ​ % ​ ​ (in thousands, except percentages) Gross profit 2,307 557 1,750 314.2 Gross margin (%) 24.1 15.1 — — ​ As a result of the foregoing, our gross profits increased from US$0.6 million for the year ended December 31, 2021 to US$2.3 million for the year ended December 31, 2022 and our gross margins increased from 15.1% for the year ended December 31, 2021 to 24.1% for the year ended December 31, 2022.
Gross profit and gross margin ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ For the Years Ended ​ ​ ​ ​ ​ ​ December 31, ​ ​ ​ ​ ​ ​ 2024 ​ 2023 ​ Change ​ ​ US$ ​ US$ ​ US$ ​ % ​ ​ (in thousands, except percentages) Gross profit 29,626 102,181 (72,555) (71.0) Gross margin (%) 3.2 15.0 — — ​ Our gross profits decreased from US$102.2 million for the year ended December 31, 2023 to US$29.6 million for the year ended December 31, 2024 and our gross margin decreased from 15.0% for the year ended December 31, 2023 to 3.2% for the year ended December 31, 2024.
For the years ended December 31, 2023, 2022 and 2021, the other subsidiaries provided loans with principal amount of US$180.5 million, nil and nil to the WFOE, repaid loans of US$186.1 million, nil and nil to Lotus Technology Inc., repaid loans of US$150.9 million, nil and nil to the WFOE, and made capital contribution of US$89.4 million, nil and nil to the WFOE. 141 Table of Contents Recently Issued Accounting Pronouncements A list of recently issued accounting pronouncements that are relevant to us is included in Note 2 of our consolidated and combined financial statements included elsewhere in this annual report.
For the years ended December 31, 2024, 2023 and 2022, the other subsidiaries provided loans with principal amount of US$514.8 million, US$180.5 million and nil to the WFOE, repaid loans of US$65.3 million, US$186.1 million and nil to Lotus Technology Inc., repaid loans of US$335.6 million, US$150.9 million and nil to the WFOE, and made capital contribution of US$564.3 million, US$89.4 million and nil to the WFOE.
Operating loss As a result of the foregoing, we had a loss from operations of US$687.4 million for the year ended December 31, 2022, in comparison with a loss from operations of US$112.9 million for the year ended December 31, 2021.
Operating loss As a result of the foregoing, we had a loss from operations of US$735.9 million for the year ended December 31, 2023, in comparison with a loss from operations of US$687.4 million for the year ended December 31, 2022. 132 Table of Contents Interest expenses Our interest expenses increased by US$1.7 million from US$8.5 million for the year ended December 31, 2022 to US$10.2 million for the year ended December 31, 2023, primarily due to the increase in bank loan borrowings in 2023.
For the year ended December 31, 2021, net cash provided by financing activities was US$364.9 million, which primarily attributable to (i) proceeds from issuance of ordinary shares of US$197.9 million, (ii) proceeds from issuance of exchangeable notes of US$125.0 million, (iii) proceeds from issuance of convertible notes of US$23.4 million, and (iv) capital contribution from shareholders of US$15.7 million.
For the year ended December 31, 2022, net cash provided by financing activities was US$758.1 million, which primarily attributable to (i) proceeds from issuance of exchangeable notes of US$379.0 million, (ii) proceeds from issuance of Series A Preferred Shares of US$187.7 million, (iii) proceeds from issuance of Series Pre-A Preferred Shares of US$129.7 million, (iv) proceeds from issuance of ordinary shares of US$76.1 million, (v) proceeds from issuance of convertible notes of US$75.0 million, (vi) repayment of exchangeable notes for issuance of Series A Preferred Shares of US$57.4 million, and (vii) consideration payment in connection with reorganization of US$50.8 million.
These strategies may include, but are not limited to obtaining additional loans from banks or related parties and renewal of existing loans when they are due and improving operational efficiency to grow revenues and control expenses.
These strategies may include, but are not limited to (i) reducing discretionary capital and operating expenses, (ii) obtaining additional loans from banks or related parties and renewing existing loans when they are due, (iii) exploring opportunities for further equity financing, and (iv) restructuring our operations to grow revenues and accelerating pace of collections of receivables.
Loss before income taxes Primarily as a result of the foregoing, our loss before income taxes for the year ended December 31, 2022 was US$724.3 million, increased by US$615.6 million from US$108.7 million for the year ended December 31, 2021.
Loss before income taxes As a result of the foregoing, our loss before income taxes for the year ended December 31, 2024 was US$1,105.3 million, increased by US$356.2 million from US$749.1 million for the year ended December 31, 2023. Income tax expense Some of our subsidiaries are subject to income tax for their taxable income in 2024.
The exercise price will be settled with Ordinary Shares. 137 Table of Contents In November 2022, the former VIE’s subsidiary, Hangzhou Lightning Speed Technology Co., Ltd., or Lightning Speed, entered into an exchangeable note agreement with an investor. Pursuant to the agreement, Lightning Speed is entitled to issue exchangeable notes to obtain financing from the investor.
Closing of the Geely HK put option could be subject to approvals of governmental authorities in various jurisdictions and is currently expected to take place in 2025. ​ 135 Table of Contents In November 2022, the former VIE’s subsidiary, Hangzhou Lightning Speed Technology Co., Ltd., or Lightning Speed, entered into an exchangeable note agreement with an investor.
Off-balance Sheets Arrangements We have not entered into any material financial guarantees or other commitments to guarantee the payment obligations of any third parties.
Inventories of US$1.2 million were pledged for other short-term financing arrangements as of December 31, 2024. Property, equipment and software of US$2.7 million were pledged for other short-term financing arrangements as of December 31, 2024. Except for the above, we have not entered into any material financial guarantees or other commitments to guarantee the payment obligations of any third parties.
The increase in cost of revenues was primarily due to the increased revenues. The increase was primarily attributable to the increase in cost of sales from the distribution of historical Lotus-brand sports cars of US$0.4 million, auto parts and peripheral products of US$0.2 million, and automotive design and development services provided to Geely Holding of US$3.3 million.
The increase was attributable to the increase in cost of sales from BEV lifestyle models and sports cars of US$278.4 million, from auto parts and peripheral products of US$23.6 million, and from other vehicle sales bundled product for BEV lifestyle models and sports cars of US$0.3 million.
Sales of goods . Our sales of goods revenue increased by US$0.8 million from US$0.4 million for the year ended December 31, 2021 to US$1.2 million for the year ended December 31, 2022, primarily due to the increase in sales from the distribution of historical Lotus-brand sports cars of US$0.4 million, and auto parts and peripheral products of US$0.4 million.
Our sales of goods revenue increased by US$230.9 million from US$660.2 million for the year ended December 31, 2023 to US$891.1 million for the year ended December 31, 2024, due to (i) the increase in the sales of BEV lifestyle models and sports cars in the amount of US$200.0 million; (ii) the increase in the sales of auto parts and peripheral products in the amount of US$30.1 million, and (iii) the increase in other vehicle sales bundled products such as fast charge sales in the amount of US$0.7 million. 127 Table of Contents Service revenues .
Our government grants income decreased by US$434.9 million from US$490.7 million for the year ended December 31, 2021 to US$55.8 million for the year ended December 31, 2022, primarily due to the decreased amortization of deferred income relating to government grants of US$435.5 million, partially offset by the increase in government grants of US$0.6 million with no future related costs required.
Government grants . Our government grants income increased by US$4.6 million from US$4.1 million for the year ended December 31, 2023 to US$8.6 million for the year ended December 31, 2024, as we received government grants of US$8.6 million and US$4.1 million respectively with no future related costs required.
Investment income (loss), net We recorded investment income of US$2.2 million for the year ended December 31, 2021, compared to investment loss of US$3.2 million for the year ended December 31, 2022.
Foreign currency exchange gains (losses), net We recorded net foreign currency exchange losses of US$11.7 million for the year ended December 31, 2024, compared to gains of US$0.04 million for the year ended December 31, 2023.
In addition, our future capital needs may require us to obtain additional equity or debt financing that may dilute our shareholders or introduce covenants that may restrict our operations or our ability to pay dividends.” In November 2023, we entered into a share subscription agreement with Meritz, pursuant to which we issued 50,000,000 Ordinary Shares to Meritz at an aggregate subscription price equal to $500,000,000.
In addition, our future capital needs may require us to obtain additional equity or debt financing that may dilute our shareholders or introduce covenants that may restrict our operations or our ability to pay dividends.” Part of our revenues have been, and are expected to continue to be, denominated in RMB.
Government grants primarily consist of government subsidies received with no future related costs required and the amortization of deferred income relating to a subsidy relating to our R&D expenditures.
Our general and administrative expenses are expected to grow slowly as in the foreseeable future as our operational efficiency continues to improve. Government grants primarily consist of government subsidies received with no future related costs required.
The following table sets forth our contractual obligations as of December 31, 2023. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Payment Due by Period ​ ​ ​ ​ Within One ​ More Than ​ ​ Total ​ Year ​ One Year ​ ​ (US$ in thousands) Capital expenditure commitment 59,568 59,304 264 Purchase commitment 182,001 179,490 2,511 Operating lease obligation 152,577 23,981 128,596 Convertible notes 101,912 20,277 81,635 Exchangeable notes 454,316 378,638 75,678 Put option liabilities 11,884 — 11,884 Total 962,258 661,690 300,568 ​ 140 Table of Contents Other than as shown above, we did not have any other significant capital and other commitments, long-term obligations, or guarantees as of December 31, 2023.
The following table sets forth our contractual obligations as of December 31, 2024. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Payment Due by Period ​ ​ ​ ​ Within One ​ More Than ​ ​ Total ​ Year ​ One Year ​ ​ (US$ in thousands) Capital expenditure commitment 28,792 26,888 1,904 Purchase commitment 101,112 89,314 11,798 Repurchase commitment 110,503 110,503 — Operating lease obligation 118,360 20,054 98,306 Convertible notes 188,156 113,910 74,246 Exchangeable notes ​ 102,999 ​ — ​ 102,999 Put option liabilities ​ 309,115 ​ 309,115 ​ — Short-term borrowing ​ 802,519 ​ 802,519 ​ — Share buyback forward liabilities 117,059 117,059 — Total 1,878,615 1,589,362 289,253 ​ Other than as shown above, we did not have any other significant capital and other commitments, long-term obligations, or guarantees as of December 31, 2024.
Our service revenue increased by US$5.1 million from US$3.3 million for the year ended December 31, 2021 to US$8.4 million for the year ended December 31, 2022, primarily due to increase in automotive design and development services provided to Geely Holding. 133 Table of Contents Cost of revenues ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ For the Years Ended ​ ​ ​ ​ ​ ​ December 31, ​ ​ ​ ​ ​ ​ 2022 ​ 2021 ​ Change ​ ​ US$ ​ US$ ​ US$ ​ % ​ ​ (in thousands, except percentages) Cost of revenues Cost of goods sold (948) (331) 617 186.4 Cost of services (6,302) (2,799) 3,503 125.2 Total (7,250) (3,130) 4,120 131.6 ​ Our cost of revenues increased by US$4.1 million from US$3.1 million for the year ended December 31, 2021 to US$7.3 million for the year ended December 31, 2022.
Our service revenue increased by US$10.5 million from US$8.4 million for the year ended December 31, 2022 to US$18.9 million for the year ended December 31, 2023, primarily due to the increase in automotive design and development services provided to OEM customers of US$5.8 million and extended and aftersales services revenue for BEV lifestyle models and sports cars of US$4.7 million.
We may also seek additional equity or debt financing in the future to satisfy capital requirements, respond to adverse developments or changes in our circumstances or unforeseen events or conditions, or fund organic or inorganic growth. We cannot assure you that financing will be available in amounts or on terms acceptable to us, if at all.
However, given the impact of the uncertainty of global economic and global financial markets, we may be unable to access further debt or equity financing when needed. We cannot assure you that financing will be available in amounts or on terms acceptable to us, if at all.
The net change in foreign currency exchange losses was primarily attributable to fluctuations in exchange rates between U.S. dollar and RMB, as well as GBP and RMB. 132 Table of Contents Changes in fair values of mandatorily redeemable noncontrolling interest, exchangeable notes and convertible notes, excluding impact of instrument-specific credit risk We recorded losses in changes in fair value of US$7.5 million for the year ended December 31, 2023, primarily due to the recognition of losses from changes in fair value of mandatorily redeemable noncontrolling interest of US$0.1 million, exchangeable notes of US$4.4 million and convertible notes of US$3.0 million.
Changes in fair values of liabilities, excluding impact of instrument-specific credit risk We recorded losses in changes in fair value of liabilities, excluding impact of instrument-specific credit risk of US$285.4 million for the year ended December 31, 2024, compared to losses of US$10.0 million for the year ended December 31, 2023, primarily due to the increase of losses from fair value changes of put option liabilities relating to the Meritz Investment.
Our research and development expenses decreased by US$65.5 million from US$511.4 million for the year ended December 31, 2021 to US$445.8 million for the year ended December 31, 2022 primarily due to the fact that we incurred R&D expenses relating to the Geely License of US$288.9 million during the year ended December 31, 2021, and no such expenses were incurred during the year ended December 31, 2022.
Our research and development expenses decreased by US$93.9 million from US$368.7 million for the year ended December 31, 2023 to US$274.8 million for the year ended December 31, 2024 primarily due to the phase down of research and development activities for the Eletre and Emeya models . Selling and marketing expenses .
The increase in cost of revenues was primarily due to the increased revenues in vehicle sales. The increase was attributable to the increase in cost of sales from vehicle products of US$553.0 million, auto parts and peripheral products of US$10.8 million, and automotive design and development services provided to OEM customers of US$5.8 million .
The increase in cost of revenues was primarily due to the increased revenues in vehicle sales.
Share of results of equity method investments We recorded losses in share of results of equity method investments of US$2.8 million for the year ended December 31, 2022, primarily due to losses of three associate companies we newly invested in 2022, calculated using the equity method. 135 Table of Contents Foreign currency exchange gains (losses), net We recorded foreign currency exchange gains of US$0.8 million for the year ended December 31, 2021, compared to losses of US$11.5 million for the year ended December 31, 2022.
Share of results of equity method investments We recorded losses in share of results of equity method investments of US$171 thousand for the year ended December 31, 2024 due to the share of loss from our equity method investments.
Interest income Our interest income increased by US$6.0 million from US$6.2 million for the year ended December 31, 2021 to US$12.2 million for the year ended December 31, 2022, all due to increase in interest income arising from bank deposits.
Interest income Our interest income increased by US$13.1 million from US$9.2 million for the year ended December 31, 2023 to US$22.3 million for the year ended December 31, 2024, primarily due to an increase in interest income from loans to related parties. ​ 129 Table of Contents Investment gain We recorded investment gain of US$14.2 million for the year ended December 31, 2024, compared to an investment loss of US$1.2 million for the year ended December 31, 2023.
We raised gross cash proceeds of approximately US$895.7 million in connection with the Business Combination, including US$858.5 million from PIPE investors. We will require additional liquidity to continue our operations over the next 12 months. We are evaluating strategies to obtain the required additional funding for future operations.
We raised gross cash proceeds of approximately US$895.7 million in connection with the Business Combination, including US$858.5 million from PIPE investors. In November 2023, we entered into a share subscription agreement with Meritz, pursuant to which we issued 50,000,000 Ordinary Shares to Meritz at an aggregate subscription price equal to $500,000,000.
Removed
We expect to incur additional expenses in relation to merger transaction expenses and share-based compensation expenses in 2024, which will result into a moderate increase in general and administrative expenses as compared to 2023. Afterwards, our general and administrative expenses are expected to grow slowly as in the foreseeable future as our operational efficiency continues to improve.
Added
We generate revenues by providing automotive design and development services to OEM customers, design and development of intelligent driving solutions, and facilitation services in relation to logistics and order processing.
Removed
Year Ended December 31, 2022 Compared to Year Ended December 31, 2021 Revenues ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ For the Years Ended ​ ​ ​ ​ ​ ​ December 31, ​ ​ ​ ​ ​ ​ 2022 ​ 2021 ​ Change ​ ​ US$ ​ US$ ​ US$ ​ % ​ ​ (in thousands, except percentages) Sales of goods 1,186 369 817 221.4 Vehicles 828 369 459 124.4 Others 358 — 358 — Service revenues 8,371 3,318 5,053 152.3 Total Revenues 9,557 3,687 5,870 159.2 ​ Our total revenues increased by US$5.9 million from US$3.7 million for the year ended December 31, 2021 to US$9.6 million for the year ended December 31, 2022, primarily due to sales from the distribution of historical Lotus-brand sports cars, auto parts, and peripheral products, automotive design and development services provided to Geely Holding.
Added
If our Hong Kong subsidiary satisfies all the requirements under the tax arrangement, then the dividends paid to the Hong Kong subsidiary are subject to withholding tax at a preferential rate of 5%.
Removed
The increased gross profit and gross margin was primarily due to the increased design services revenue with higher gross profit margin.
Added
The table below sets forth a reconciliation of our net loss to adjusted net loss and adjusted EBITDA for the years indicated: ​ ​ ​ ​ ​ ​ ​ ​ ​ For the Years Ended December 31, ​ ​ 2024 ​ 2023 ​ 2022 ​ ​ US$ ​ US$ ​ US$ ​ ​ (in thousands) Net loss (1,107,289) (750,255) (724,563) Share-based compensation expenses – net of tax effect of nil 31,930 — 10,625 Adjusted net loss (1,075,359) (750,255) (713,938) Net loss (1,107,289) (750,255) (724,563) Interest expenses 58,218 10,200 8,542 Interest income (22,289) (9,204) (12,188) Income tax expense 2,012 1,113 292 Share-based compensation expenses 31,930 — 10,625 Depreciation 76,488 54,957 12,790 Adjusted EBITDA (960,930) (693,189) (704,502) Year Ended December 31, 2024 Compared to Year Ended December 31, 2023 To Revenues ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ For the Years Ended ​ ​ ​ ​ ​ ​ December 31, ​ ​ ​ ​ ​ ​ 2024 ​ 2023 ​ Change ​ ​ US$ ​ US$ ​ US$ ​ % ​ ​ (in thousands, except percentages) Sales of goods 891,061 660,158 230,903 35.0 BEV lifestyle models 634,333 465,265 169,068 36.3 Sports cars 215,089 184,111 30,978 16.8 Others 41,639 10,782 30,857 286.2 Service revenues 33,288 18,850 14,438 76.6 Total Revenues 924,349 679,008 245,341 36.1 ​ Our total revenues increased by US$245.3 million from US$679.0 million for the year ended December 31, 2023 to US$924.3 million for the year ended December 31, 2024, primarily due to (i) the increased sales of BEV lifestyle models, (ii) the increase in the sales revenue from the distribution of Lotus-brand sports cars, auto parts, and peripheral products, and (iii) the increase in intelligent driving service income and automotive design and development services income from OEM customers as well as extended services.

… 58 more changes not shown on this page.

Item 6. [Reserved]

Selected Financial Data — reserved (removed by SEC in 2021)

33 edited+9 added−5 removed62 unchanged
Biggest changeYu has 30 years of working experience in the automotive industry. Mr. Yu currently serves as the managing partner of Zhongqing Capital. Prior to that, Mr. Yu served as the Managing Partner of NIO Capital for five years. Before joining NIO Capital, Mr.
Biggest changeLee was the Managing Director and Head of China Strategy at Jefferies. ​ 142 Table of Contents Ning Yu has served as our director since July 2022. Mr. Yu has 30 years of working experience in the automotive industry. Mr. Yu currently serves as the managing partner of Zhongqing Capital. Prior to that, Mr.
Board Practices Board of Directors Our board of directors consists of seven directors as of the date of this annual report. The Amended Articles provide that the minimum number of directors shall be three and the exact number of directors shall be determined from time to time by our board of directors.
C. Board Practices Board of Directors Our board of directors consists of seven directors as of the date of this annual report. The Amended Articles provide that the minimum number of directors shall be three and the exact number of directors shall be determined from time to time by our board of directors.
Ada Yunfeng Yan satisfies the requirements for an “independent director” within the meaning of the Nasdaq listing rules. 147 Table of Contents The nominating and corporate governance committee assists the board of directors in selecting individuals qualified to become our directors and in determining the composition of the board and its committees.
Ada Yunfeng Yan satisfies the requirements for an “independent director” within the meaning of the Nasdaq listing rules. 146 Table of Contents The nominating and corporate governance committee assists the board of directors in selecting individuals qualified to become our directors and in determining the composition of the board and its committees.
Awards granted under the 2022 Share Incentive Plan are evidenced by an award agreement that sets forth the terms, conditions and limitations for each award, which may include the term of the award, the provisions applicable in the event 145 Table of Contents that the grantee’s employment or service terminates, and our authority to unilaterally or bilaterally amend, modify, suspend, cancel or rescind the award.
Awards granted under the 2022 Share Incentive Plan are evidenced by an award agreement that sets forth the terms, conditions and limitations for each award, which may include the term of the award, the provisions applicable in the event that the grantee’s employment or service terminates, and our authority to unilaterally or bilaterally amend, modify, suspend, cancel or rescind the award.
Ada Yunfeng Yan satisfies the criteria of an audit committee financial expert as set forth under the applicable rules of the SEC. Each of Ms. Ada Yunfeng Yan and Mr.
Ada Yunfeng Yan satisfies the criteria of an audit committee financial expert as set forth under the applicable rules of the SEC. Each of Ms. Ada Yunfeng Yan, Ms. Catherine Cai and Mr.
In computing the number of shares beneficially owned by a person and the percentage ownership of that person, shares that the person has the right to acquire within 60 days are 149 Table of Contents included, including through the exercise of Warrants or any option or other right or the conversion of any other security.
In computing the number of shares beneficially owned by a person and the percentage ownership of that person, shares that the person has the right to acquire within 60 days are included, including through the exercise of Warrants or any option or other right or the conversion of any other security.
Options that are vested and exercisable will terminate if they are not exercised prior to the time as the plan administrator determines at the time of grant. However, the maximum exercisable term is ten years from the date of grant. Transfer Restrictions .
Options that are vested and exercisable will terminate if they are not exercised prior to the time as the plan administrator determines at the time of grant. However, the maximum exercisable term is ten years from the date of grant. 144 Table of Contents Transfer Restrictions .
Since joining Geely Holding Group in 1999, he has worked in sales, manufacturing, supply chain and quality management and R&D, among other areas, holding multiple 143 Table of Contents key positions in Geely Holding, including General Manager of Group Sales Company and Deputy General Manager of Geely Ningbo Company.
Since joining Geely Holding Group in 1999, he has worked in sales, manufacturing, supply chain and quality management and R&D, among other areas, holding multiple key positions in Geely Holding, including General Manager of Group Sales Company and Deputy General Manager of Geely Ningbo Company.
Terms of Directors and Executive Officers A director shall hold office until such time as he or she resigns his office by notice in writing to us, is removed from office by ordinary resolution or is otherwise disqualified from acting as a director or removed in accordance with the Amended Articles.
Terms of Directors and Executive Officers A director shall hold office until such time as he or she resigns his office by notice in writing to us, is removed from office by ordinary resolution or is otherwise disqualified from acting as a director or removed in accordance with the Amended Articles. ​ 147 Table of Contents D.
(6) Represents 108,740,886 Ordinary Shares held by Lotus Technology International Investment Limited, or LTIIL. LTIIL is wholly owned by Geely HK, which is wholly owned by Geely Holding. Geely Holding is 82.233% owned by Mr. Shufu Li, 8.0583% owned by Mr. Xingxing Li, and 9.7087% owned by Ningbo Yima 150 Table of Contents Enterprise Management Partnership (Limited Partnership).
(6) Represents 108,740,886 Ordinary Shares held by Lotus Technology International Investment Limited, or LTIIL. LTIIL is wholly owned by Geely HK, which is wholly owned by Geely Holding. Geely Holding is 82.233% owned by Mr. Shufu Li, 8.0583% owned by Mr. Xingxing Li, and 9.7087% owned by Ningbo Yima Enterprise Management Partnership (Limited Partnership).
He joined CLSA in 2011, and served as the Managing Director and Head of China Capital Access at CITIC-CLSA from 2017, directly responsible for the leadership role of bridging onshore and offshore resources (capital, cross-border investment), through the CLSA gateway. Since 2019, Mr. Lee was the Managing Director and Head of China Strategy at Jefferies.
He joined CLSA in 2011, and served as the Managing Director and Head of China Capital Access at CITIC-CLSA from 2017, directly responsible for the leadership role of bridging onshore and offshore resources (capital, cross-border investment), through the CLSA gateway. Since 2019, Mr.
(3) Represents 57,061,196 Ordinary Shares held by LATLP. Mr. Qingfeng Feng indirectly holds 30.5714% pecuniary interest in LATLP. See footnote (4) for further details about LATLP. Mr. Qingfeng Feng disclaims beneficial ownership of all of the ordinary shares held by LATLP, except to the extent of his pecuniary interest therein. (4) Represents 186,648,945 Ordinary Shares held by LATLP.
Qingfeng Feng indirectly holds 30.5714% pecuniary interest in LATLP. See footnote (4) for further details about LATLP. Mr. Qingfeng Feng disclaims beneficial ownership of all of the ordinary shares held by LATLP, except to the extent of his pecuniary interest therein. (4) Represents 186,648,945 Ordinary Shares held by LATLP.
The registered address of Jingkai Fund is Room A, No. 05, 14/F., Building 6, Phase II, Wuhan Economic Development Wanda Plaza, Plot 12C2, Wuhan Economic and Technological Development Zone, Wuhan City, Hubei Province, China. To our knowledge, as of February 29, 2024, none of our ordinary shares were held by record holders in the United States.
The registered address of Jingkai Fund is Room A, No. 05, 14/F., Building 6, Phase II, Wuhan Economic Development Wanda Plaza, Plot 12C2, Wuhan Economic and Technological Development Zone, Wuhan City, Hubei Province, China. To our knowledge, as of April 28, 2025, none of our ordinary shares were held by record holders in the United States.
Bhd, which is 51% owned by Geely HK and 49% owned by Etika. Geely HK is 100% owned by Geely Holding. See footnote (5) for details about Geely Holding. Etika is wholly owned by Albukhary Corporation Sdn. Bhd., which is 99.9% owned by Syed Mokhtar Shah Syed Nor.
LGIL is wholly owned by Lotus Advance Technologies Sdn. Bhd, which is 51% owned by Geely HK and 49% owned by Etika. Geely HK is 100% owned by Geely Holding. See footnote (5) for details about Geely Holding. Etika is wholly owned by Albukhary Corporation Sdn. Bhd., which is 99.9% owned by Syed Mokhtar Shah Syed Nor.
Alexious Kuen Long Lee has served as our chief financial officer since our inception and our director since November, 2021. Previously, he was appointed as the Head of Strategic Marketing at FIAT Industrial China Investment Co. in 2004.
Alexious Kuen Long Lee has served as our director since November 2021 and was our chief financial officer from November 2021 until April 2025. Previously, he was appointed as the Head of Strategic Marketing at FIAT Industrial China Investment Co. in 2004.
There were also 15,037,030 Warrants issued and outstanding as of February 29, 2024. ​ ​ ​ ​ ​ ​ ​ ​ % of Beneficial ​ ​ Ordinary Shares ​ Ownership/Voting Power Directors and Executive Officers (1) : ​ Daniel Donghui Li (2) 14,398,660 2.1 % Qingfeng Feng (3) 57,061,196 8.4 % Alexious Kuen Long Lee * * ​ Ooi Teik Huat — — ​ Ning Yu — — ​ Ada Yunfeng Yan — — ​ Anish Melwani * * ​ All Directors and Executive Officers as a Group 72,813,749 10.8 % ​ ​ ​ ​ ​ ​ 5.0% Shareholders: ​ Lotus Advanced Technology Limited Partnership (4) 186,648,945 27.6 % Etika (5) 156,236,329 23.1 % Lotus Technology International Investment Limited (6) 108,740,886 16.1 % Meritz (7) 50,000,000 7.4 % Lotus Group International Limited (8) 47,995,443 7.1 % HUBEI CHANGJIANG JINGKAI AUTOMOBILE INDUSTRY INVESTMENT FUND PARTNERSHIP (LIMITED PARTNERSHIP) (9) 44,997,886 6.6 % * Less than 1% of the total number of outstanding Ordinary Shares (1) Except as indicated otherwise, the business address for the directors and executive officers of Lotus Technology Inc. is 800 Century Avenue, Pudong New Area, Shanghai, China.
There were also 14,541,306 Warrants issued and outstanding as of April 28, 2025. ​ ​ ​ ​ ​ ​ ​ ​ % of Beneficial Ownership ​ ​ Ordinary Shares ​ /Voting Power Directors and Executive Officers (1) : ​ Daniel Donghui Li (2) 14,398,660 2.1 % Qingfeng Feng (3) 57,061,196 8.4 % Alexious Kuen Long Lee * * ​ Ning Yu — — ​ Catherine Cai — — ​ Ada Yunfeng Yan — — ​ Anish Melwani * * ​ Daxue Wang ​ — ​ — ​ All Directors and Executive Officers as a Group ​ 72,813,749 ​ 10.8 % ​ ​ 5.0% Shareholders: ​ ​ ​ Lotus Advanced Technology Limited Partnership (4) 186,648,945 27.6 % Etika (5) 156,236,329 23.1 % Lotus Technology International Investment Limited (6) 108,740,886 16.1 % Meritz (7) 50,000,000 7.4 % Lotus Group International Limited (8) 47,995,443 7.1 % HUBEI CHANGJIANG JINGKAI AUTOMOBILE INDUSTRY INVESTMENT FUND PARTNERSHIP (LIMITED PARTNERSHIP) (9) ​ 44,997,886 ​ 6.6 % * Less than 1% of the total number of outstanding Ordinary Shares (1) Except as indicated otherwise, the business address for the directors and executive officers of Lotus Technology Inc. is 800 Century Avenue, Pudong New Area, Shanghai, China.
Share Ownership The following table sets forth information regarding the beneficial ownership of our Ordinary Shares as of February 29, 2024: ● each of our directors and executive officers; and ● each of our principal shareholders who beneficially own more than 5% of our total outstanding shares on an as-converted basis.
Share Ownership The following table sets forth information regarding the beneficial ownership of our Ordinary Shares as of April 28, 2025: ● each of our directors and executive officers; and ● each of our principal shareholders who beneficially own more than 5% of our total outstanding shares on an as-converted basis.
As of December 31, 2023, a total of awards to purchase 10,073,233 ordinary shares have been granted under the 2022 Share Incentive Plan and outstanding, excluding awards that were forfeited or cancelled after the grant dates and after giving effect to the recapitalization upon the business combination with LCAA.
As of December 31, 2024, a total of awards to purchase 13,570,227 ordinary shares have been granted under the 2022 Share Incentive Plan and outstanding, excluding awards that were forfeited or cancelled after the grant dates and after giving effect to the recapitalization upon the business combination with LCAA.
Yu had worked at Geely Holding Group as Vice President for five years responsible for Geely’s international business. Prior to Geely, Mr. Yu was the CEO of Fiat Powertrain Technologies in Asia Pacific, a division of the Fiat Group.
Yu served as the Managing Partner of NIO Capital for five years. Before joining NIO Capital, Mr. Yu had worked at Geely Holding Group as Vice President for five years responsible for Geely’s international business. Prior to Geely, Mr. Yu was the CEO of Fiat Powertrain Technologies in Asia Pacific, a division of the Fiat Group.
Employees As of December 31, 2021, 2022 and 2023, we had approximately 2,300, 2,913 and 3,180 full-time employees, respectively.
Employees As of December 31, 2022, 2023 and 2024, we had approximately 2,913, 3,180 and 1,996 full-time employees, respectively.
Each committee’s members and functions are described below. 146 Table of Contents Audit Committee The audit committee consists of Ms. Ada Yunfeng Yan, Mr. Ning Yu and Mr. Anish Melwani. Ms. Ada Yunfeng Yan is the chairperson of the audit committee. Ms.
Each committee’s members and functions are described below. ​ 145 Table of Contents Audit Committee The audit committee consists of Ms. Ada Yunfeng Yan, Mr. Anish Melwani and Ms. Catherine Hongjun Cai Ms. Ada Yunfeng Yan is the chairperson of the audit committee. Ms.
Compensation Committee The compensation committee consists of Mr. Donghui Li, Mr. Ning Yu and Mr. Anish Melwani. Mr. Donghui Li is the chairperson of the compensation committee. Mr. Anish Melwani satisfies the requirements for an “independent director” within the meaning of the Nasdaq listing rules.
Compensation Committee The compensation committee consists of Mr. Donghui Li, Mr. Anish Melwani and Ms. Catherine Hongjun Cai Mr. Donghui Li is the chairperson of the compensation committee. Each of Ms. Catherine Hongjun Cai and Mr. Anish Melwani satisfies the requirements for an “independent director” within the meaning of the Nasdaq listing rules.
Nominating and Corporate Governance Committee The nominating and corporate governance committee consists of Mr. Donghui Li, Mr. Ning Yu and Ms. Ada Yunfeng Yan. Mr. Donghui Li is the chairperson of the nominating and corporate governance committee. Ms.
Nominating and Corporate Governance Committee The nominating and corporate governance committee consists of Mr. Donghui Li, Ms. Ada Yunfeng Yan and Ms. Catherine Hongjun Cai Mr. Donghui Li is the chairperson of the nominating and corporate governance committee. Each of Ms. Catherine Hongjun Cai and Ms.
Our mainland China subsidiaries are required by law to make contributions equal to certain percentages of each employee’s salary for his or her pension insurance, medical insurance, unemployment insurance, work-related injury insurance and maternity insurance and other statutory benefits, and a housing provident fund.
Our mainland China subsidiaries are required by law to make contributions equal to certain percentages of each employee’s salary for his or her pension insurance, medical insurance, unemployment insurance, work-related injury insurance and maternity insurance and other statutory benefits, and a housing provident fund. ​ 143 Table of Contents Employment Agreements and Indemnification Agreements Each of the executive officers is party to an employment agreement with the WFOE.
(2) Represents 14,398,660 Ordinary Shares held by Lotus Advanced Technology Limited Partnership, or LATLP. Mr. Daniel Donghui Li indirectly holds 7.7143% pecuniary interest in LATLP. See footnote (4) for further details about LATLP. Mr. Daniel Donghui Li disclaims beneficial ownership of all of the ordinary shares held by LATLP, except to the extent of his pecuniary interest therein.
Daniel Donghui Li indirectly holds 7.7143% pecuniary interest in LATLP. See footnote (4) for further details about LATLP. Mr. Daniel Donghui Li disclaims beneficial ownership of all of the ordinary shares held by LATLP, except to the extent of his pecuniary interest therein. (3) Represents 57,061,196 Ordinary Shares held by LATLP. Mr.
Directors and Executive Officers Age Position/Title Daniel Donghui Li ​ 53 ​ Chairman of the Board of Directors Qingfeng Feng ​ 51 ​ Director and Chief Executive Officer Alexious Kuen Long Lee ​ 48 ​ Director and Chief Financial Officer Ooi Teik Huat ​ 64 ​ Director Ning Yu ​ 53 ​ Director Ada Yunfeng Yan ​ 54 ​ Independent Director Anish Melwani ​ 45 ​ Independent Director ​ Daniel Donghui Li has served as chairman of our board of directors since November 2021.
Directors and Executive Officers Age Position/Title Daniel Donghui Li ​ 54 ​ Chairman of the Board of Directors Qingfeng Feng ​ 52 ​ Director and Chief Executive Officer Alexious Kuen Long Lee ​ 49 ​ Director Ning Yu ​ 54 ​ Director Ada Yunfeng Yan ​ 55 ​ Independent Director Anish Melwani ​ 46 ​ Independent Director Catherine Hongjun Cai ​ 60 ​ Independent Director Daxue Wang ​ 49 ​ Chief Financial Officer ​ Daniel Donghui Li has served as chairman of our board of directors since November 2021.
Melwani is a member of the Council on Foreign Relations, the Board of the United Way of New York City where he serves on the Marketing Committee, and the National Retail Federation’s Board of Directors. Mr. Melwani holds a B.A. in Economics from Harvard University. 144 Table of Contents B.
Melwani is a member of the Council on Foreign Relations, the Board of the United Way of New York City where he serves on the Marketing Committee, and the National Retail Federation’s Board of Directors. Mr. Melwani holds a B.A. in Economics from Harvard University. Catherine Hongjun Cai has served as our independent director since April 2025. Ms.
However, these shares are not included in the computation of the percentage ownership of any other person. The percentage of our Ordinary Shares beneficially owned by the parties listed below is calculated based on 676,735,814 Ordinary Shares issued and outstanding as of February 29, 2024.
However, these shares are not included in the computation of the percentage ownership of any other person. 148 Table of Contents The percentage of our Ordinary Shares beneficially owned by the parties listed below is calculated based on 678,244,338 Ordinary Shares issued and outstanding as of April 28, 2025.
The following table sets forth the numbers of our employees categorized by function as of December 31, 2023. ​ ​ ​ ​ ​ ​ ​ As of December 31, ​ ​ 2023 ​ ​ Number ​ % Functions: Research and development 1,802 56.7 Marketing and sales 690 21.7 Supply chain 449 14.1 Functional support 239 7.5 Total 3,180 100 ​ Our success depends on our ability to attract, motivate, train and retain qualified personnel.
The following table sets forth the numbers of our employees categorized by function as of December 31, 2024. ​ ​ ​ ​ ​ ​ ​ As of December 31, ​ ​ 2024 ​ ​ Number ​ % Functions: Research and development 1,030 51.6 Marketing and sales 474 23.7 Supply chain 169 8.5 Functional support 323 16.2 Total 1,996 100 ​ Our success depends on our ability to attract, motivate, train and retain qualified personnel.
However, unless otherwise determined by the plan administrator in good faith, no such action may adversely affect in any material way any award previously issued pursuant to the 2022 Share Incentive Plan. Awards Granted As of the date of this annual report, we have not granted options to our directors or executive officers. C.
However, unless otherwise determined by the plan administrator in good faith, no such action may adversely affect in any material way any award previously issued pursuant to the 2022 Share Incentive Plan.
The registered address of LTIIL is Craigmuir Chambers, Road Town, Tortola, VG 1110, British Virgin Islands. (7) Represents 50,000,000 held by Meritz. The business address of Meritz is Three IFC, 10 Gukjegeumyung-ro, Yeongdeungpo-gu, Seoul, Korea 07326. (8) Represents 47,995,443 Ordinary Shares held by LGIL. LGIL is wholly owned by Lotus Advance Technologies Sdn.
The registered address of LTIIL is Craigmuir Chambers, Road Town, Tortola, VG 1110, British Virgin Islands. 149 Table of Contents (7) Represents 50,000,000 held by Meritz. The business address of Meritz is Three IFC, 10 Gukjegeumyung-ro, Yeongdeungpo-gu, Seoul, Korea 07326. The above information is based on the Schedule 13G filed by Meritz Securities Co., Ltd. on May 13, 2024.
The business address for Mr. Daniel Donghui Li is 1760 Jiangling Road, Hangzhou, China. The business address for Mr. Ning Yu is Unit 2103, T3 Lujiazui Financial Plaza, No. 826 Century Avenue, Pudong New District, Shanghai, China. The business address for Ooi Teik Huat is 2 Lorong Aminuddin Baki 4, Taman Tun Dr Ismail, 60000 Kuala Lumpur, Malaysia.
The business address for Mr. Daniel Donghui Li is 1760 Jiangling Road, Hangzhou, China. The business address for Mr. Ning Yu is Unit 2103, T3 Lujiazui Financial Plaza, No. 826 Century Avenue, Pudong New District, Shanghai, China. (2) Represents 14,398,660 Ordinary Shares held by Lotus Advanced Technology Limited Partnership, or LATLP. Mr.
Compensation Compensation of Directors and Executive Officers For the year ended December 31, 2023, we paid RMB16.0 million in cash to our directors and executive officers as a group. We have not set aside or accrued any amount to provide pension, retirement or other similar benefits to our executive officers.
We have not set aside or accrued any amount to provide pension, retirement or other similar benefits to our executive officers.
Removed
Ooi Teik Huat has served as our director since January 2023. Mr. Ooi has served as the director of Meridian Solutions Sdn Bhd since August 1996. From August 1993 to August 1996, he was the head of corporate finance at Pengkalen Securities Sdn Bhd. Prior to that, Mr.
Added
Cai has more than three decades of experience in China’s investment banking industry and has held senior positions at international investment banks. She served as the Group Managing Director, Global Executive Vice Chairman, and Chairman of Greater China at UBS from 2018 to 2024.
Removed
Ooi was manager of corporate advisory department at Malaysian International Merchant Bankers Berhad from June 1989 to August 1993, and an audit supervisor at Othman Hew & Co Chartered Accountants from September 1984 to June 1989. Mr.
Added
Prior to that, she was the Managing Director, Chairman and Head of China at Citigroup from 2016 to 2018. Ms. Cai also held the position of Managing Director, Chairman and Head of China Investment Banking at Bank of America Merrill Lynch. Ms. Cai obtained her bachelor’s degree in law from Peking University.
Removed
Ooi has been serving at three public listed companies, DRB-Hicom Berhad (since 2008), Malakoff Corporation Berhad (since 2012), and Gas Malaysia Berhad (since 2013). Mr. Ooi graduated from Monash University, Australia with a Bachelor of Economics. He is a member of CPA Australia and Malaysian Institute of Accountants. Ning Yu has served as our director since July 2022. Mr.
Added
Daxue Wang has served as our chief financial officer since April 2025. Mr. Wang is a seasoned executive across corporate and prominent financial institutions, most recently serving as CFO of Radar Auto. Prior to that, Mr. Wang held several executive positions in Zhejiang Kangsheng, Huzhou Moshan Asset Management, Morgan Stanley Securities, ICBC Credit Suisse Asset Management and Citi Group.
Removed
Employment Agreements and Indemnification Agreements Each of the executive officers is party to an employment agreement with the WFOE.
Added
The Board believes that Mr. Wang is highly qualified and a suitable candidate. B. Compensation Compensation of Directors and Executive Officers For the year ended December 31, 2024, we paid RMB11.11 million in cash to our directors and executive officers as a group.
Removed
Board Diversity Board Diversity Matrix (As of February 29, 2024) Country of Principal Executive Offices People’s Republic of China Foreign Private Issuer ​ Yes Disclosure Prohibited Under Home Country Law ​ No 148 Table of Contents Total Number of Directors ​ 7 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Did Not ​ ​ ​ ​ ​ ​ Non- ​ Disclose ​ ​ Female ​ Male ​ Binary ​ Gender Part I: Gender Identity ​ ​ ​ ​ ​ ​ ​ ​ Directors ​ 1 ​ 6 ​ N/A ​ N/A Part II: Demographic Background ​ ​ ​ ​ ​ ​ ​ ​ Underrepresented Individual in Home Country Jurisdiction ​ ​ ​ ​ ​ ​ ​ — LGBTQ+ ​ ​ ​ ​ ​ ​ ​ — Did Not Disclose Demographic Background ​ ​ ​ ​ ​ ​ ​ 2 ​ D.
Added
Awards Granted The following table summarizes, as of April 30, 2025, the number of options we have granted to certain of our directors and officers, excluding awards that were forfeited or cancelled after the relevant grant dates.
Added
Name Number of Class A Ordinary Shares Exercise Price (US$/Share) Date of Grant Date of Expiration Anish Melwani ​ * ​ 2.89 ​ June 1, 2024 ​ September 11, 2032 ​ ​ * ​ 2.89 ​ October 1, 2024 ​ September 11, 2032 * Less than 1% of our total ordinary shares on an as-converted basis outstanding as of April 30, 2025.
Added
The above information is based on the Schedule 13G filed by Etika Automotive Sdn Bhd on November 8, 2024.
Added
The percentage of total ordinary shares and the percentage of aggregate voting power for Etika Automotive Sdn Bhd are calculated based on the number of our company’s total outstanding shares as of April 28, 2025 and assuming Etika Automotive Sdn Bhd’s shareholding has not changed since September 30, 2024.
Added
The percentage of total ordinary shares and the percentage of aggregate voting power for Meritz Securities Co., Ltd. are calculated based on the number of our company’s total outstanding shares as of April 28, 2025 and assuming Meritz Securities Co., Ltd.’s shareholding has not changed since March 31, 2024. (8) Represents 47,995,443 Ordinary Shares held by LGIL.

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

37 edited+26 added−7 removed35 unchanged
Biggest changeAssignment, Assumption and Amendment Agreement On February 22, 2024, LTC, LCAA, Continental and Equiniti entered into the Assignment, Assumption and Amendment Agreement, pursuant to which the LCAA Warrants were assumed by LTC, Equiniti was engaged as the warrant agent under the Warrant Agreement, and Continental, as the warrant agent for LCAA, assigned to Equiniti all of its rights, interests and obligations in and under the Warrant Agreement dated as of March 10, 2021 between LCAA and Continental.
Biggest changeAssignment, Assumption and Amendment Agreement On February 22, 2024, LTC, LCAA, Continental and Equiniti entered into the Assignment, Assumption and Amendment Agreement, pursuant to which the LCAA Warrants were assumed by LTC, Equiniti was engaged as the warrant agent under the Warrant Agreement, and Continental, as the warrant agent for LCAA, assigned to Equiniti all of its rights, interests and obligations in and under the Warrant Agreement dated as of March 10, 2021 between LCAA and Continental. ​ 151 Table of Contents Meritz Investment On November 15, 2023, LTC entered into the Meritz Subscription Agreement with Meritz, pursuant to which, among other things, Meritz agreed to subscribe for, and LTC agreed to issue to Meritz 50,000,000 Ordinary Shares, or the Meritz Subscription Shares, at an aggregate subscription price equal to US$500,000,000.
“Collateral Default” means any failure to satisfy the Cash Top Up Obligation (as defined below), any failure to deposit the U.S. treasury bonds and/or U.S. treasury bills in the manner and amounts as required under the Meritz Subscription Agreement, any failure by LTC to perfect the security interests in the manner as required under the Meritz Subscription Agreement, or any material breach of any Security Document. 153 Table of Contents (ii) LTC Call Options LTC has the right to acquire from Meritz (i) not more than the lower of (a) 17,500,000 Meritz Subscription Shares and (b) the number of Meritz Subscription Shares actually held by Meritz at the relevant time after the satisfaction of the Registration Condition and after the first date on which the arithmetic mean (such arithmetic mean being referred to as the “Market Price”) of the last reported publicly traded price of the Ordinary Shares of the Company at the closing of trading on a trading day (such traded price at closing being referred to as the “Closing Price”) for the five (5) trading days immediately prior to the date of determination is greater than US$14.00, at a per share purchase price of US$14.00 (such option being referred to as “Call Option 1”); (ii) not more than the lower of (a) 7,500,000 Meritz Subscription Shares and (b) the number of Meritz Subscription Shares actually held by Meritz at the relevant time ((such option being referred to as “Call Option 2”) after February 22, 2025 at a per share price equal to the greater of (a) US$14.00 and (b) the Market Price on the date of delivery of the notice by LTC to exercise Call Option 2; and (iii) not more than the lower of (a) 7,500,000 Meritz Subscription Shares and (b) the number of Meritz Subscription Shares actually held by Meritz at the relevant time (such option being referred to as “Call Option 3,” and together with Call Option 1 and Call Option 2, being collectively referred to as the “Call Options”) after February 22, 2026 at a per share price equal to the greater of (a) US$14.00 and (b) the Market Price on the date of delivery of the notice by LTC to exercise Call Option 3.
“Collateral Default” means any failure to satisfy the Cash Top Up Obligation (as defined below), any failure to deposit the U.S. treasury bonds and/or U.S. treasury bills in the manner and amounts as required under the Meritz Subscription Agreement, any failure by LTC to perfect the security interests in the manner as required under the Meritz Subscription Agreement, or any material breach of any Security Document. 152 Table of Contents (ii) LTC Call Options LTC has the right to acquire from Meritz (i) not more than the lower of (a) 17,500,000 Meritz Subscription Shares and (b) the number of Meritz Subscription Shares actually held by Meritz at the relevant time after the satisfaction of the Registration Condition and after the first date on which the arithmetic mean (such arithmetic mean being referred to as the “Market Price”) of the last reported publicly traded price of the Ordinary Shares of the Company at the closing of trading on a trading day (such traded price at closing being referred to as the “Closing Price”) for the five (5) trading days immediately prior to the date of determination is greater than US$14.00, at a per share purchase price of US$14.00 (such option being referred to as “Call Option 1”); (ii) not more than the lower of (a) 7,500,000 Meritz Subscription Shares and (b) the number of Meritz Subscription Shares actually held by Meritz at the relevant time ((such option being referred to as “Call Option 2”) after February 22, 2025 at a per share price equal to the greater of (a) US$14.00 and (b) the Market Price on the date of delivery of the notice by LTC to exercise Call Option 2; and (iii) not more than the lower of (a) 7,500,000 Meritz Subscription Shares and (b) the number of Meritz Subscription Shares actually held by Meritz at the relevant time (such option being referred to as “Call Option 3,” and together with Call Option 1 and Call Option 2, being collectively referred to as the “Call Options”) after February 22, 2026 at a per share price equal to the greater of (a) US$14.00 and (b) the Market Price on the date of delivery of the notice by LTC to exercise Call Option 3.
(iv) Security LTC’s obligations to pay the Put Option Price, purchase price for Call Options and purchase price for the Meritz Subscription Shares with respect to which LTC has exercised its right of first offer under the Meritz Subscription Agreement (amount of payment by LTC to Meritz to fulfil such obligations and any obligations under any of the Security Documents, together with any expenses of Meritz in connection with any sale or other realization to enforce its security interest, are collectively referred to as the “Secured Amount”) are secured by (a) a fixed charge over a restricted securities account, or the Restricted Securities Account, of LTC holding certain U.S. treasury bonds and/or U.S. treasury bills granted in favor of Meritz, and (b) a fixed charge over a restricted cash account of LTC granted in favor of Meritz, subject to the requirement for LTC to deposit cash into and/or the right of LTC to have certain cash be released from such cash account, or the Restricted Cash Account, depending on the trading price of Ordinary Shares (including in the form of ADS), as described below. 154 Table of Contents After Meritz has released U.S. treasury bonds and/or U.S. treasury bills with outstanding principal amount equal to US$175,000,000, in the event that the Closing Price drops below a certain level, LTC is obligated to, within five business days thereafter, deposit additional cash in U.S. dollars in the Restricted Cash Account such that the balance thereof would meet the applicable requirement for cash collateral (such obligation to top up being referred to as the “Cash Top Up Obligation”).
(iv) Security LTC’s obligations to pay the Put Option Price, purchase price for Call Options and purchase price for the Meritz Subscription Shares with respect to which LTC has exercised its right of first offer under the Meritz Subscription Agreement (amount of payment by LTC to Meritz to fulfil such obligations and any obligations under any of the Security Documents, together with any expenses of Meritz in connection with any sale or other realization to enforce its security interest, are collectively referred to as the “Secured Amount”) are secured by (a) a fixed charge over a restricted securities account, or the Restricted Securities Account, of LTC holding certain U.S. treasury bonds and/or U.S. treasury bills granted in favor of Meritz, and (b) a fixed charge over a restricted cash account of LTC granted in favor of Meritz, subject to the requirement for LTC to deposit cash into and/or the right of LTC to have certain cash be released from such cash account, or the Restricted Cash Account, depending on the trading price of Ordinary Shares (including in the form of ADS), as described below. 153 Table of Contents After Meritz has released U.S. treasury bonds and/or U.S. treasury bills with outstanding principal amount equal to US$175,000,000, in the event that the Closing Price drops below a certain level, LTC is obligated to, within five business days thereafter, deposit additional cash in U.S. dollars in the Restricted Cash Account such that the balance thereof would meet the applicable requirement for cash collateral (such obligation to top up being referred to as the “Cash Top Up Obligation”).
Distribution Agreement Concurrently with the execution of the Original Merger Agreement, on January 31, 2023, LTIL entered into the Distribution Agreement with Lotus Cars Limited, the entity carrying out the sportscar manufacturing operations of Lotus UK, pursuant to which LTIL is appointed as the exclusive global distributor (excluding the U.S., where LTIL will act as the head distributor with the existing regional distributor continuing its functions) for Lotus Cars Limited to distribute vehicles, parts and certain tools, and to provide after sale services and brand, marketing and public relations for such vehicles, part and tools distributed by it on the terms and conditions of the Distribution Agreement. 151 Table of Contents Put Option Agreements Concurrently with the execution of the Original Merger Agreement, on January 31, 2023, LTC entered into a put option agreement with each of Geely HK and Etika, pursuant to which each of Geely HK and Etika is granted the right to require LTC to purchase all of the equity interests held by each of Geely HK and Etika in Lotus Advance Technologies Sdn Bhd, the parent company of Lotus UK, at a pre-agreed price which will be calculated based on the total revenue of LGIL for the year of 2024 adjusted to exclude net debt, at a future date during the period from April 1, 2025 to June 30, 2025 and contingent upon satisfaction of certain pre-agreed condition.
Distribution Agreement Concurrently with the execution of the Original Merger Agreement, on January 31, 2023, LTIL entered into the Distribution Agreement with Lotus Cars Limited, the entity carrying out the sportscar manufacturing operations of Lotus UK, pursuant to which LTIL is appointed as the exclusive global distributor (excluding the U.S., where LTIL will act as the head distributor with the existing regional distributor continuing its functions) for Lotus Cars Limited to distribute vehicles, parts and certain tools, and to provide after sale services and brand, marketing and public relations for such vehicles, part and tools distributed by it on the terms and conditions of the Distribution Agreement. 150 Table of Contents Put Option Agreements Concurrently with the execution of the Original Merger Agreement, on January 31, 2023, LTC entered into a put option agreement with each of Geely HK and Etika, pursuant to which each of Geely HK and Etika is granted the right to require LTC to purchase all of the equity interests held by each of Geely HK and Etika in Lotus Advance Technologies Sdn Bhd, the parent company of Lotus UK, at a pre-agreed price which will be calculated based on the total revenue of LGIL for the year of 2024 adjusted to exclude net debt, at a future date during the period from April 1, 2025 to June 30, 2025 and contingent upon satisfaction of the LAT Put Option Exercise Condition.
The amounts of prepayments to relate party for purchase of equipment of US$2.7 million and nil were included in other non-current assets-related parties as of December 31, 2023 and 2022, respectively .
The amounts of prepayments to relate party for purchase of equipment of nil and US$2.7 million were included in other non-current assets-related parties as of December 31, 2024 and 2023, respectively .
In the event that LTC declines (or fails to accept the offer) to acquire the Meritz Subscription Shares pur-suant to its right of first offer as described below, Call Option 2 and Call Option 3 shall immediately lapse.
In the event that LTC declines (or fails to accept the offer) to acquire the Meritz Subscription Shares pursuant to its right of first offer as described below, Call Option 2 and Call Option 3 shall immediately lapse.
(g) On January 31, 2023, we entered into a distribution agreement with Lotus Cars Limited, a wholly owned subsidiary of LGIL and ultimately controlled by our controlling shareholder, pursuant to which we were appointed as the exclusive global distributor to distribute certain models of vehicles and to provide after-sale services and brand, marketing and public relations for such vehicles distributed by it since January 31, 2023, for a cash consideration of GBP18.1 million (equivalent to US$22.3 million).
(g) On January 31, 2023, we entered into a distribution agreement with Lotus Cars Limited, a wholly owned subsidiary of LGIL and ultimately controlled by our controlling shareholder, pursuant to which we were appointed as the exclusive global distributor to distribute certain models of vehicles and to provide after-sale services and brand, marketing and public relations for such vehicles distributed by it since January 31, 2023, for a cash consideration of US$22.3 million (equivalent to GBP18.1 million), which was settled during the years ended December 31, 2024.
Upon the termination of the Meritz Subscription Agreement, Meritz shall release all U.S. treasury bonds and/or U.S. treasury bills from the Restricted Securities Account and all the cash collateral from the Restricted Cash Account, in the manner set out in the Security Documents. 152 Table of Contents (i) Meritz Put Option Meritz has a put option, or the Put Option, to sell all or part of the Meritz Subscription Shares then held by it to LTC or any third party as nominated by LTC and approved by Meritz at a price, or the Put Option Price, equal to the Agreed Return upon the occurrence of (a) any Credit Event (as defined below) in respect of LTC; (b) any Collateral Default (as defined below); (c) failure by LTC to either (i) ensure the total amount of freely available cash that is not subject to any legal or contractual restrictions as to withdrawal or use (excluding any restriction that is imposed by the foreign exchange rules or policies under applicable law) held by it as of the last date of each fiscal quarter shall be no less than US$175,000,000, in each case as evidenced in the applicable quarterly financial results filed or furnished by it with the SEC pursuant to a Current Report on Form 6-K, or (ii) file or furnish with the SEC pursuant to a Current Report on Form 6-K, (A) its quarterly financial results for each of the first and the third fiscal quarters within 60 calendar days following the last date of such fiscal quarter, (B) its second quarter and half-year financial results within 120 calendar days following the last date of such fiscal quarter, and (C) its fourth quarter and full-year financial results within 120 calendar days following the last date of such fiscal quarter; (d) failure of any of the Meritz Subscription Shares (including in the form of ADS) being eligible for resale pursuant to an effective registration statement filed with and declared effective by the SEC (such condition being referred to as the “Registration Condition”) and any such Meritz Subscription Shares not being eligible for resale under Rule 144 solely due to failure of LTC to meet the public information requirement under such rule at any time after August 22, 2024; or (e) February 22, 2027, which date may be extended by LTC subject to Meritz’s prior written consent (each of the events described in (a) through (e) is referred to as a “Put Option Trigger Event”).
(i) Meritz Put Option Meritz has a put option, or the Put Option, to sell all or part of the Meritz Subscription Shares then held by it to LTC or any third party as nominated by LTC and approved by Meritz at a price, or the Put Option Price, equal to the Agreed Return upon the occurrence of (a) any Credit Event (as defined below) in respect of LTC; (b) any Collateral Default (as defined below); (c) failure by LTC to either (i) ensure the total amount of freely available cash that is not subject to any legal or contractual restrictions as to withdrawal or use (excluding any restriction that is imposed by the foreign exchange rules or policies under applicable law) held by it as of the last date of each fiscal quarter shall be no less than US$175,000,000, in each case as evidenced in the applicable quarterly financial results filed or furnished by it with the SEC pursuant to a Current Report on Form 6-K, or (ii) file or furnish with the SEC pursuant to a Current Report on Form 6-K, (A) its quarterly financial results for each of the first and the third fiscal quarters within 60 calendar days following the last date of such fiscal quarter, (B) its second quarter and half-year financial results within 120 calendar days following the last date of such fiscal quarter, and (C) its fourth quarter and full-year financial results within 120 calendar days following the last date of such fiscal quarter; (d) failure of any of the Meritz Subscription Shares (including in the form of ADS) being eligible for resale pursuant to an effective registration statement filed with and declared effective by the SEC (such condition being referred to as the “Registration Condition”) and any such Meritz Subscription Shares not being eligible for resale under Rule 144 solely due to failure of LTC to meet the public information requirement under such rule at any time after August 22, 2024; or (e) February 22, 2027, which date may be extended by LTC subject to Meritz’s prior written consent (each of the events described in (a) through (e) is referred to as a “Put Option Trigger Event”).
(e) We entered into short-term lease agreements with related parties to rent office spaces. During the years ended December 31, 2023, 2022 and 2021, we incurred short-term lease costs of US$ 765 thousand, US$347 thousand and US$243 thousand, respectively.
(e) We entered into short-term lease agreements with related parties to rent office spaces. During the years ended December 31, 2024, 2023 and 2022, we incurred short-term lease costs of US$129 thousand, US$ 765 thousand and US$347 thousand, respectively.
As of December 31, 2023 and 2022, the amounts due to related parties for purchase of office materials, commercial services relating to sales of sports cars and BEV lifestyle models and other consulting services of US$27.7 million and US$8.7 million were included in accrued expenses and other current liabilities – related parties, respectively.
As of December 31, 2024 and 2023, the amounts due to related parties for purchase of office materials, commercial services relating to sales of sports cars and BEV lifestyle models and other consulting services of US$25.5 million and US$27.7 million were included in accrued expenses and other current liabilities – related parties, respectively.
(a) We made payments of US$ 4.0 million , US$244 thousand and nil on behalf of related parties for the years ended December 31, 2023, 2022 and 2021 , respectively. Related parties collected cash receipts of US$ 3.7 million, nil and nil on behalf of us for the years ended December 31, 2023, 2022 and 2021, respectively.
(a) We made payments of US$24.1 million, US$ 4.0 million and US$244 thousand on behalf of related parties for the years ended December 31, 2024, 2023 and 2022 , respectively. Related parties collected cash receipts of nil , US$ 3.7 million and nil on behalf of us for the years ended December 31, 2024, 2023 and 2022, respectively.
(d) Related parties paid US$ 14.5 million and US$3.0 million on behalf of us in association with travelling expenses, staff salary and social welfare, and other miscellaneous expenses, of which US$ 1.6 million and US$3.0 million were included in accrued expenses and other current liabilities – related parties as of December 31, 2023 and 2022, respectively.
(d) Related parties paid US$5.2 million and US$ 14.5 million on behalf of us in association with travelling expenses, staff salary and social welfare, and other miscellaneous expenses, of which US$1.2 million and US$ 1.6 million were included in accrued expenses and other current liabilities – related parties as of December 31, 2024 and 2023, respectively.
(c) We purchased equipment and software of US$ 11.2 million, US$42.8 million and US$6.3 million from related parties for the years ended December 31, 2023, 2022 and 2021, respectively.
(c) We purchased equipment and software of US$1.3 million., US$ 11.2 million and US$42.8 million from related parties for the years ended December 31, 2024, 2023 and 2022, respectively.
We sold sports cars, BEV lifestyle models, auto parts and peripheral products to related parties amounting to US$3.4 million, US$23 thousand and nil for the years end December 31, 2023, 2022 and 2021, respectively.
We sold sports cars, BEV lifestyle models, auto parts and peripheral products to related parties amounting to US$18.2 million, US$3.4 million and US$23 thousand for the years end December 31, 2024, 2023 and 2022, respectively.
As of December 31, 2023 and 2022, the amounts due to related parties for purchase of equipment and software of US$ 19.8 million and US$8.4 million were included in accrued expenses and other current liabilities – related parties, respectively.
As of December 31, 2024 and 2023, the amounts due to related parties for purchase of equipment and software of US$2.6 million and US$ 19.8 million were included in accrued expenses and other current liabilities – related parties, respectively.
(c) The amounts of prepayments to related parties for purchase of vehicles, auto parts and peripheral products of US$21.4 million and US$6.1 million were included in prepayments and other current assets – related parties as of December 31, 2023 and 2022 , respectively.
(c) The amounts of prepayments to related parties for purchase of vehicles, auto parts and peripheral products of US$33.2 million and US$21.4 million were included in prepayments and other current assets – related parties as of December 31, 2024 and 2023 , respectively.
As of December 31, 2023 and 2022, US$ 168 thousand and nil were included in accrued expenses and other current liabilities – related parties, and US$ 1.6 million and US$1.6 million were included in other non-current liabilities-related parties , respectively .
As of December 31, 2024 and 2023, US$39 thousand and US$ 168 thousand were included in accrued expenses and other current liabilities – related parties, and US$1.5 million and US$ 1.6 million were included in other non-current liabilities-related parties , respectively .
We recognized interest income of US$ 122 thousand , US$24 thousand and nil for the years ended December 31, 2023, 2022 and 2021 , respectively.
We recognized interest income of US$131 thousand, US$ 122 thousand and US$24 thousand for the years ended December 31, 2024, 2023 and 2022 , respectively.
As of December 31, 2023 and 2022, the amounts due to related partis for purchase of products and services for R&D activities of US$ 217.3 million and US$162.9 million were included in accrued expenses and other current liabilities – related parties, respectively.
As of December 31, 2024 and 2023, the amounts due to related parties for purchase of products and services for R&D activities of US$184.1 million and US$ 217.3 million were included in accrued expenses and other current liabilities – related parties, respectively.
During the years ended December 31, 2023, 2022 and 2021, these purchases amounted to US$852.6 million , US$44.3 million and US$14.3 million, among which, US$549.9 million, US$839 thousand and US$331 thousand were recognized as cost of goods sold for the years ended December 31, 2023, 2022 and 2021, respectively.
During the years ended December 31, 2024, 2023 and 2022, these purchases amounted to US$759.7 million, US$852.6 million and US$44.3 million, among which, US$774.0 million, US$549.9 million and US$839 thousand were recognized as cost of goods sold for the years ended December 31, 2024, 2023 and 2022, respectively.
As of December 31, 2023 and 2022, payables for short-term leases of US$ 323 thousand and US$272 thousand were included in accrued expenses and other current liabilities – related parties , respectively . (f) We received deposits of US$ 251 thousand, US$1.6 million and nil from related parties for the years ended December 31, 2023, 2022 and 2021 , respectively.
As of December 31, 2024 and 2023, payables for short-term leases of US$48 thousand and US$ 323 thousand were included in accrued expenses and other current liabilities – related parties , respectively . ​ 157 Table of Contents (f) We received deposits of US$14 thousand, US$ 251 thousand and US$1.6 million from related parties for the years ended December 31, 2024, 2023 and 2022 , respectively.
As of December 31, 2023 and 2022, purchases including sports cars, BEV lifestyle models, auto parts and peripheral products of US$ 248.3 million and US$21.9 million were recorded as inventories, respectively .
As of December 31, 2024 and 2023, purchases including sports cars, BEV lifestyle models, auto parts and peripheral products of US$168.7 million and US$ 248.3 million were recorded as inventories, respectively .
(b) During the years ended December 31, 2023, 2022 and 2021, we provided unsecured short-term loans of US$ 1.2 million , US$2.3 million and nil , respectively, to related parties with interest rates of 3.65%-4.5% per annum.
(b) During the years ended December 31, 2024, 2023 and 2022, we provided unsecured short-term loans of US$0.6 million, US$ 1.2 million and US$2.3 million , respectively, to related parties with interest rates of 3.65%-4.5% per annum. We collected US$140 thousand from related parties during the years ended December 31, 2024.
We recoded R&D expenses of US$ 134.7 million , US$167.0 million and US$47.4 million during the years ended December 31, 2023, 2022 and 2021, respectively.
We recoded R&D expenses of US$107.5 million, US$ 134.7 million and US$167.0 million during the years ended December 31, 2024, 2023 and 2022, respectively.
As of December 31, 2023 and 2022, receivables of US$4.3 million and US$244 thousand were included in prepayments and other current assets – related parties , respectively .
As of December 31, 2024 and 2023, receivables of US$21.7 million and US$4.3 million were included in prepayments and other current assets – related parties , respectively .
As of December 31, 2023 and 2022, US$ 3.0 million and US$2.4 million receivable as principal amount of the loans and as interest were included in prepayments and other current assets – related parties , respectively .
As of December 31, 2024 and 2023, the receivable for the loan principal and interest of US$3.3 million and US$ 3.0 million were included in prepayments and other current assets – related parties , respectively .
As of December 31, 2023 and 2022, the amounts due to related parties for purchase of sports cars, BEV lifestyle models, auto parts and peripheral products of US$340.4 million and US$5.8 million were included in accounts payable-related parties, respectively. (b) We purchased products and services from related parties for R&D activities.
As of December 31, 2024 and 2023, the amounts due to related parties for purchase of sports cars, BEV lifestyle models, auto parts and peripheral products of US$410.4 million and US$340.4 million were included in accounts payable-related parties, respectively.
Compensation—Share Incentive Plans.” Related Party Transactions We sold sports cars, BEV lifestyle models, auto parts and peripheral products and provided R&D services and other consulting services to a number of related parties. We provided services to related parties amounting to US$12.6 million, US$8.3 million and US$3.3 million for the years ended December 31, 2023, 2022 and 2021, respectively.
Compensation—Share Incentive Plans.” ​ 155 Table of Contents Related Party Transactions We sold sports cars, BEV lifestyle models, auto parts and peripheral products and provided R&D services and other consulting services to a number of related parties.
(d) The amounts of prepayments to related parties for short-term lease agreements of US$82 thousand and nil were included in prepayments and other current assets – related parties as of December 31 , 2023 and 2022, respectively.
(d) The amounts of prepayments to related parties for short-term lease agreements of US$5 thousand and US$82 thousand were included in prepayments and other current assets – related parties as of December 31, 2024 and 2023, respectively. 156 Table of Contents (e) For the year ended December 31, 2024, we recorded US$267 thousand in expected credit losses for prepayments and other current assets – related parties in general and administrative expenses.
Accounts receivable due from related parties arising from sales of goods and provision of services were US$22.4 million and US$8.5 million as of December 31, 2023 and 2022, respectively. As of December 31, 2023 and 2022, receipts in advance of US$1 thousand and US$8 thousand were included in contract liabilities – related parties, respectively.
Accounts receivable due from related parties arising from sales of goods and provision of services, including facilitation services in relation to logistics and order processing, were US$107.8 million and US$22.4 million as of December 31, 2024 and 2023, respectively.
During the years ended December 31, 2023, 2022 and 2021, we recognized right-of-use assets of US$12.2 million, US$214 thousand and US$1.3 million from related parties, respectively. We paid lease liabilities of US$269 thousand, US$98 thousand and US$545 thousand during the years ended December 31, 2023, 2022 and 2021, respectively.
We entered into lease agreements with related parties to rent office spaces and parking spaces. During the years ended December 31, 2024, 2023 and 2022, we recognized right-of-use assets of nil, US$12.2 million and US$214 thousand from related parties, respectively.
As of December 31, 2023, the expected credit loss provision recorded in prepayments and other current assets – related parties not under common control was US$23 thousand. 156 Table of Contents Accounts payable – related parties, accrued expenses and other current liabilities – related parties and other non-current liabilities– related parties are arising from transactions related to purchase of products and services, purchase of equipment and software, and payments by related parties on behalf of us as follows.
Accounts payable – related parties, accrued expenses and other current liabilities – related parties and other non-current liabilities– related parties are arising from transactions related to purchase of products and services, purchase of equipment and software, and payments by related parties on behalf of us as follows.
Upon the listing of ECARX Holding Inc. on December 21, 2022, the note was automatically converted into Class A ordinary shares of ECARX Holding Inc. at a conversion price of US$9.50 per share. As of December 31, 2023 and 2022, the fair value of such shares was US$3.3 million and US$8.4 million, respectively. C.
On May 13, 2022, we purchased a one-year convertible note with a principal amount of US$10.0 million issued by ECARX Holding Inc. Upon the listing of ECARX Holding Inc. on December 21, 2022, the note was automatically converted into Class A ordinary shares of ECARX Holding Inc. at a conversion price of US$9.50 per share.
Meritz will also have piggyback registration rights for the Meritz Subscription Shares in connection with certain registrations of securities that LTC undertakes. Employment Agreements and Indemnification Agreements See “Item 6. Directors, Senior Management and Employees—B. Compensation.” 155 Table of Contents Share Incentives See “Item 6. Directors, Senior Management and Employees—B.
Meritz will also have piggyback registration rights for the Meritz Subscription Shares in connection with certain registrations of securities that LTC undertakes.
For the year ended December 31, 2023, we recorded US$11 thousand in expected credit losses for prepayments and other current assets – related parties not under common control in general and administrative expenses.
For the year ended December 31, 2024, the Group recorded US$2.2 million in expected credit losses for accounts receivable – related parties in general and administrative expenses.
As of December 31, 2023 and 2022, current operating lease liabilities were US$840 thousand and US$13 thousand, espectively, and non-current operating lease liabilities were US$12.1 million and US$170 thousand, respectively. On March 12, 2021, we entered into a license agreement with Zhejiang Liankong Technologies Co., Ltd, a subsidiary of Geely Holding.
We paid lease liabilities of US$191 thousand, US$269 thousand and US$98 thousand during the years ended December 31, 2024, 2023 and 2022, respectively. As of December 31, 2024 and 2023, current operating lease liabilities were US$1.0 million and US$840 thousand, respectively, and non-current operating lease liabilities were US$10.7 million and US$12.1 million, respectively.
(e) As of January 1, 2023, upon the adoption of ASC 326, the expected credit loss provision for prepayments and other current assets – related parties not under common control was US$12 thousand.
As of December 31, 2024, the expected credit loss provision recorded in prepayments and other current assets – related parties was US$286 thousand. (f) During the year ended December 31, 2024, the Group has paid US$1.1 million as deposit for services, which was included in other non-current assets - related parties.
Removed
Meritz Investment On November 15, 2023, LTC entered into the Meritz Subscription Agreement with Meritz, pursuant to which, among other things, Meritz agreed to subscribe for, and LTC agreed to issue to Meritz 50,000,000 Ordinary Shares, or the Meritz Subscription Shares, at an aggregate subscription price equal to US$500,000,000.
Added
As of December 31, 2024, the Put Option Exercise Condition had been satisfied. On April 14, 2025, Geely HK exercised its put option, requiring us to purchase 51% of the equity interests in Lotus Advance Technologies Sdn Bhd.
Removed
As of December 31, 2023, payable for the distribution right of US$23.0 million was included in accrued expenses and other current liabilities – related parties. 157 Table of Contents In 2019, the Company’s subsidiary, Lotus Tech UK, borrowed a one-year unsecured loan from a related party with the principal amount of US$10.2 million, bearing an interest rate of 2% per annum, the maturity date of which was August 31, 2022.
Added
Closing of the Geely HK put option could be subject to approvals of governmental authorities in various jurisdictions and is currently expected to take place around the end of 2025.
Removed
The borrowing was repaid in August 2022. During the years ended December 31, 2022 and 2021, we incurred interest expenses of US$90 thousand and US$220 thousand, respectively. We entered into lease agreements with related parties to rent office spaces and parking spaces.
Added
Upon the termination of the Meritz Subscription Agreement, Meritz shall release all U.S. treasury bonds and/or U.S. treasury bills from the Restricted Securities Account and all the cash collateral from the Restricted Cash Account, in the manner set out in the Security Documents.
Removed
Under the terms of the agreement, we received a non-exclusive, perpetual, irrevocable and non-sublicensable license for the electric automotive chassis and autonomous driving technology platform, or the “Geely License,” with a consideration of US$288.9 million. The Geely License is contractually restricted to be used in certain of our R&D projects.
Added
On September 30, 2024, the Company and Meritz entered into a supplemental agreement for the Meritz Subscription Agreement. 154 Table of Contents (vi) Subsequent Agreements On November 29, 2024, we entered into a share buyback agreement, or the Meritz Share Buyback Agreement with Meritz, pursuant to which Meritz agrees to sell and surrender, and we agree to repurchase, 17,500,000 ADSs, or the Repurchased Meritz ADSs..
Removed
We conclude that the Geely License has no alternative future use, therefore the cost of the license has been expensed as research and development expenses in the consolidated and combined statement of comprehensive loss for the year ended December 31, 2021.
Added
Ordinary Shares underlying the Repurchased Meritz ADSs constitute a part of Meritz Investment, or the Meritz Shares. The total consideration payable by us for the buyback equals the amount that provides Meritz with a 12.5% internal rate of return, calculated for the period between the Closing Date and the date of the closing of the buyback, on US$175 million.
Removed
In November 2021, we obtained the trademark licenses from Group Lotus Limited, a related party controlled by Geely Holding, by issuing 47,995,443 ordinary shares to LGIL, a related party controlled by Geely Holding.
Added
We did not repurchase the 17,500,000 ADSs under the Meritz Share Buyback Agreement by December 31, 2024, and we entered into an amended and restated share buyback agreement, or the A&R Meritz Share Buyback Agreement with Meritz and our wholly-owned subsidiary, Lotus EV Limited on March 28, 2025, to amend and restate in its entirety the Meritz Share Buyback Agreement.
Removed
The transaction was accounted for as common control transaction and completed in June 2022. On May 13, 2022, we purchased a one-year convertible note with a principal amount of US$10.0 million issued by ECARX Holding Inc.
Added
Pursuant to the A&R Meritz Share Buyback Agreement. Under the A&R Meritz Share Buyback Agreement, Meritz agrees to sell, and we agree to repurchase, 17,500,000 ADSs. Ordinary Shares underlying the repurchased ADSs constitute a part of the Meritz Investment.
Added
Pursuant to the A&R Meritz Share Buyback Agreement, we agree to and complete the full payment of a deposit of US$150,937,500, herein referred to as the SBA Deposit, to Meritz on or before April 30, 2025 and the remaining repurchase price (an amount that provides Meritz with a 12.5% IRR on US$48,109,420, calculated for the period between March 28, 2025 and the date of buyback closing), together with any accrued default interest (to the extent not waived by Meritz in accordance with the A&R Meritz Share Buyback Agreement), at the buyback closing to take place on or before September 30, 2025.
Added
Closing of the buyback is subject to customary closing conditions. At the buyback losing, Meritz is required to return 17,500,000 ADSs to us against payment by us of the amount payable at closing. The SBA Deposit was paid in full as of April 30, 2025.
Added
Upon signing of the A&R Meritz Share Buyback Agreement and until the buyback closing, (i) certain obligations of us under the Meritz Subscription Agreement have been suspended, including our obligations (A) to deposit additional cash as collateral in the restricted cash account to secure its obligations due to changes in the closing price of the ADSs; and (B) to maintain US$175 million of unrestricted cash as of the last date of each fiscal quarter; and (ii) Meritz agreed not to enforce the U.S. treasury bonds with the aggregate outstanding principal amount of US$325,000,000 which was pledged by the Company in favour of Meritz.
Added
Upon the completion of the share buyback, certain provisions under Meritz Subscription Agreement will terminate, including: (i) our obligation to maintain US$175 million of unrestricted cash as of the last date of each fiscal quarter; (ii) our call option to acquire certain ADSs held y Meritz at US$14.00 per share if the closing price of the ADSs for a five-trading-day period exceeds US$14.00; and (iii) our obligation to deposit additional cash as collateral in the restricted cash account to secure its obligations due to changes in the closing price of the ADSs.
Added
In the event the buyback closing does not take place on or prior to September 30, 2025 (except due to Meritz’s failure to satisfy certain closing conditions, provided we are not in breach of any representation or warranty, covenant or other agreement and is otherwise ready, willing and able to consummate the Closing), (i) an event of default will be deemed to occur under the Meritz Subscription Agreement; (ii) to the extent that the event of default occurs on September 30, 2025, Meritz shall transfer 12,689,058 ADSs to Lotus EV Limited, Lotus EV Limited shall pledge such shares to Meritz, and such pledged ADSs will become immediately enforceable and shall be enforced by Meritz; (iii) Meritz shall enforce the security under the Meritz Subscription Agreement; (iv) Meritz shall enforce 7,000,000 Ordinary Shares charged by Lotus Advanced Technology Limited Partnership in favor of Meritz, pursuant to the security agreement, dated March 28, 2025, between Lotus Advanced Technology Limited Partnership and Meritz; and (v) Meritz will have the right to terminate the A&R Meritz Share Buyback Agreement.
Added
Employment Agreements and Indemnification Agreements See “Item 6. Directors, Senior Management and Employees—B. Compensation.” Share Incentives See “Item 6. Directors, Senior Management and Employees—B.
Added
We provided services to related parties amounting to US$24.4 million, US$12.6 million and US$8.3 million for the years ended December 31, 2024, 2023 and 2022, respectively.
Added
As of December 31, 2024 and 2023, receipts in advance of US$150 thousand and US$1 thousand were included in contract liabilities – related parties, respectively.
Added
As of December 31, 2024 and 2023, accounts receivable due from related parties for R&D services of US$929 thousand and nil was included as contract asset in prepayments and other current assets – related parties, respectively.
Added
On March 11, 2024, our subsidiary and a related party, ultimately controlled by the Controlling Shareholder, entered into a loan agreement, pursuant to which our subsidiary provided unsecured loans with a total principal amount of US$354.0 million with a term of five years and annual interest rate of 6.95%.
Added
During the year ended December 31, 2024, we provided loan principal of US$261.6 million and recognized interest income of US$13.4 million. As of December 31, 2024, the receivable for the loan principal and interest was US$269.5 million was included in loan receivable from a related party. We disposed a subsidiary in September 2024.
Added
We provided unsecured short-term loans to that subsidiary with an interest rate of 3% per annum. During the period from the disposal date to December 31, 2024, we recognized interest income of US$115 thousand.
Added
As of December 31, 2024, the receivable for the loan principal and interest of US$15.7 million was included in prepayments and other current assets – related parties.
Added
During the year ended December 31, 2024 and 2023, the Group incurred interest expense of US$17.5 million and nil due to the delay payments of accounts payable due to related parties, bearing interest rate of 6.95%. (b) We purchased products and services from related parties for R&D activities.
Added
The transaction was accounted for as common control transaction and completed in June 2022. On September 27,2024, the Company disposed 80% equity interest of Lotus Tech Innovation Centre GmbH to Geely UK Limited, for cash consideration of US$12.2 million.
Added
As of December 31, 2024 and 2023, the fair value of such shares was US$2.2 million and US$3.3 million, respectively.
Added
During the year ended December 31, 2024, we borrowed loans due within one year or less with principal amounts of US$140.1 million from Zhejiang Geely Automobile Co., Ltd., and US$58.4 million from Geely Technology Group Co., Ltd., respectively, bearing an interest rate of 6%.
Added
The loans are secured by our intellectual property with carrying amount of nil, as the research and development costs were expensed historically. During the year ended December 31, 2024, we incurred interest expenses of US$2.0 million for those loans.
Added
As of December 31, 2024, the balance of the loan of US$199.6 million including the principal amount and interest was included in short-term borrowings – related parties. C. Interests of Experts and Counsel Not applicable.