Lotus Technology H1 2026 Earnings Call - Margin Expansion Driven by PHEV Mix and Geely Synergies

Operator: Good day, and thank you for standing by. Welcome to the Lotus Technology first half 2026 earnings conference call. At this time, all participants are in a listen only mode. After the speaker’s presentation, there will be a question and answer session. To ask a question during the session, you will need to press star one and one on your telephone. You will then hear an automated message advising your hand is raised. To withdraw your question, please press star one and one again. Please be advised today’s conference is being recorded. We’d now like to hand the conference over to your first speaker today, Ms. Michelle Ma, head of investor relations. Please go ahead.

Michelle Ma, Head of Investor Relations, Lotus Technology: Thank you, operator, and welcome to Lotus Tech first half of 2026 earnings call. My name is Michelle Ma, the head of investor relations here at Lotus. With me today are the CEO, Mr. Qingfeng Feng, and the CFO, Dr. Daxue Wang. Our conference call materials were issued today and are available on our investor relations website. We are also broadcasting the call via webcast. Before we continue, please be reminded that today’s discussion will contain forward-looking statements. First, with to the safe harbor provisions of the U.S. Private Securities Litigation Reform Act of 1995. Forward-looking statements involve inherent risks and uncertainties. As such, the company’s actual future results may be materially different from the views expressed today. Further information regarding these presented uncertainties is included in Lotus Tech’s relevant filings with the U.S. Securities and Exchange Commission.

The company undertakes no obligation to update any forward-looking statements, except as required under applicable law. Please also note that our earnings press release and this conference call will include disclosure of unaudited GAAP financial information as well as unaudited non-GAAP financial measures. You can find a reconciliation of these figures in the press release available on our investor relations website at ir.group-lotus.com. With that, I’m delighted to turn the call over to our CFO, Dr. Wang, please.

Daxue Wang, Chief Financial Officer, Lotus Technology: Thank you, Michelle. Good morning, good day, and good evening, distinguished shareholders, analysts, and media friends. Thank you for joining our first half 2026 earnings release. Again, this is Daxue Wang, the chief financial officer of Lotus. I’m excited to brief you the audited financial results of the company. In the first half of 2026, the company delivered 3,904 units, representing a 39% year-over-year increase, outperforming the referenced traditional, premium, and luxury segments. This solid delivery performance reflects the company’s growing market presence and competitiveness, particularly in the high-end automotive sectors. Strong delivery growth directly drove revenues up 23% year-over-year to $268 million for the first half of 2026, with strong momentum in the China market. Average selling price dropped slightly by 3% year-over-year, attributable to an increased sales mix of the lower priced Eletre X.

Gross profits rose 47% year-over-year to $226 million, while gross margin expanded 1.6% to 10%. This improvement was supported by a favorable product mix following the successful launch of the Eletre X, Lotus’ first-ever PHEV in its 78-year history, marking the early validation of our multi-powertrain strategy. To maintain our disciplined cost management trajectory, the operating loss narrowed 63% year-over-year to $95 million in the first half of 2026. This improvement stems from the rigorous financial management, better operating leverage, and a one-off licensee refund linked to the product pipeline adjustments. Excluding these one-off items, the operating loss narrowed 26% year-over-year to $195 million, demonstrating the company’s ongoing focus on driving operational efficiency and upholding a strict financial discipline. In May 2026, we unveiled our Focus 2030 strategy, which Ms. Feng will address in her remarks.

These improved financial outcomes serve as tangible proof of our progress against core pillars of Focus 2030, namely our multi-powertrain strategy and commitment to financial discipline, which are translating into measurable operational and financial advancement. In the first half of 2026, lifestyle vehicles deliveries made up 77% of company’s total vehicle deliveries for the period, driven largely by the successful market introduction of the Eletre X in China. China market deliveries grew 60% year-over-year, keeping China as the company’s largest market and accounting for 58% of total deliveries during the period. Deliveries outside China rose 17.4% year-over-year, including 45% growth across the Americas and 164% growth in ROW. European deliveries fell 17% year-over-year amid intensifying competition in the luxury BEV segment.

In Europe, we will continue to refine inventory management, enhance product value, and enforce pricing discipline to protect residual values and rebuild momentum. Eletre opened for orders across mainland Europe on June 3rd, with customer deliveries commencing in the fourth quarter. U.K. launches will follow in mid-2027. We expect this new model to fuel delivery growth over the upcoming quarters. China market deliveries expansion outpaced overall growth across China’s premium passenger vehicle segment. This result underscores the strong inherent competitiveness of the Lotus full product portfolio, even amid mounting competition across the board for the auto industry. Now let’s move to the half-year financials. Overall, our first half 2026 financial performance improved meaningfully versus the prior year period. As already covered deliveries, revenues and gross margin, I will not repeat them here.

In line with revenue, costs of revenues for first half 2026 stood at $242 million, up 21% year-over-year. As a result, gross profits reached $26 million, a 47% year-over-year increase. Operating expenses during the period came in at $127.5 million, down 46% year-over-year, primarily comprising the following. R&D expense stood at negative million U.S. dollars in the first half due to the aforementioned one-off item. Stripping out of this specific special one-time adjustment, R&D expenses totaled $96 million, a modest 4% year-over-year rise versus $92 million in the first half of 2025, driven by technology investment for the Eletre X. Selling and marketing expenses increased to $83 million, up 5% year-over-year. The uplift reflects higher sales commissions tied to rising vehicle volumes alongside marketing activities for the Eletre X launch in China and the pre-launch campaigns in overseas markets.

General and administrative expenses decreased to $46 million, down 27% year-over-year, as we tightly controlled travel, agency and other costs and optimized our organizational structures. With the above, even excluding one-off effects, the operating expense to revenue ratio improved from 107% in the first half 2027 to 84% in first half 2026, reinforcing our priority to lift operational efficiency and maintain strict cost controls. Accordingly, operating loss and net loss for the first half 2026 narrowed 63% and 52% respectively. On a non-GAAP adjusted basis, adjusted EBITDA loss for the first half of the year narrowed 57% to $104 million, compared with the $240 million loss in the same period last year. Beyond headline metrics, I would like to emphasize that we have delivered sustained operating expense reductions through the value-driven initiatives. This reflects our continued focus on cost optimization and operational efficiency.

By looking ahead, we aim to advance towards profitability and create long-term shareholder value by maximizing product positioning, expanding margins via optimized product mix, and executing rigorous cost reduction actions. With that, I will hand over to Ms. Feng. Thank you very much.

Qingfeng Feng, Chief Executive Officer, Lotus Technology: 现场的各位朋友，大家好，我是Lotus CEO冯擎峰。感谢大家参加Lotus Technology 2026年上半年业绩发布电话会。上半年公司实现了核心经营指标的改善，并逐步落地了我们发布的Focus 2030战略规划。接下来我将向大家详细介绍。

Daxue Wang, Chief Financial Officer, Lotus Technology: Good day. I am Qingfeng Feng, CEO of Lotus Technology. Thank you for joining us in the Lotus Technology’s first half 2026 earnings call. In the first half of the current year, we delivered improvements across all our core operating metrics and steadily rolled out the Focus 2030 strategy unveiled earlier of this year. I will now walk you through the details.

Qingfeng Feng, Chief Executive Officer, Lotus Technology: 首先近期发展的一些亮点，我们还是根植于英伦赛道跑车底蕴，强化品牌内核，拓展新市场、新产品机遇。纯电超跑SUV Eletre正式在加拿大市场推出之后，已于七月抵达。这标志着首批中国制造豪华电动车在加拿大实现了销售，也是莲花加强北美布局的重要里程碑。

Daxue Wang, Chief Financial Officer, Lotus Technology: We will start with recent development highlights. Rooted in our British heritage of track-bred performance, we continue to strengthen our brand DNA while seizing new opportunities in emerging markets and product segments. Following its official launch in the Canadian market, the all-electric hyper SUV Eletre arrived in the country in July, marking the first time Chinese-made luxury EVs hit the Canadian market and representing a significant milestone in Lotus’ efforts to expand its North American footprint.

Qingfeng Feng, Chief Executive Officer, Lotus Technology: 今年我们推出的首款混动产品Eletre X，在中国命名为For Me。那么在中国发售之后，反馈热烈，带动了莲花在中国50万以上乘用车市场市占率在二季度增长到近2%。6月，Eletre X在欧洲大陆正式开放订单，预计第四季度开始交付。

Daxue Wang, Chief Financial Officer, Lotus Technology: Our first hybrid offering this year, the Eletre X, known in China as For Me, has received an enthusiastic response since its domestic release. The model has helped lifted Lotus market share in China prime passenger vehicle segment priced above

Qingfeng Feng, Chief Executive Officer, Lotus Technology: RMB 500,000 to nearly 2% in the second quarter. In June, we opened orders for the Eletre in the EU market, with deliveries scheduled to commence in the fourth quarter.

Qingfeng Feng, Chief Executive Officer, Lotus Technology: 我们在持续优化推出限量版跑车产品，比如5月推出了Emira 420 Sport，大家称它为弯中王。在提升了马力的同时，又减轻了25公斤的重量，让Emira在过弯能力变得更加强劲。7月，我们在中国推出了Emira Scura限量版，这是针对17年Exige Scura的致敬之作。在中国限量9台，北美限售60台，均已售罄。Focus 2030的战略下，我们将在2028年推出中置V8引擎超级混动跑车Type 135。

Qingfeng Feng, Chief Executive Officer, Lotus Technology: We continue to refine and roll out limited edition sports cars. In May, for instance, we introduced the Emira 420 Sport Edition, widely hailed by enthusiasts as the Corner King. With a power boost and a 25-kilogram weight reduction, the Emira 420 delivers even sharper chassis handling. In July, we launched the Emira Scura limited edition in China, a tribute to the Exige Scura from 17 years ago. With only nine units allocated to China and 60 to North America, the entire run sold out immediately. Under the Focus 2030 strategy, we will unveil the Type 135 mid-engine V8 hybrid hypercar in 2028.

Qingfeng Feng, Chief Executive Officer, Lotus Technology: 7月，Emeya在马来西亚雪邦国际赛道创下了全新的电动车圈速纪录，以显著优势超越了此前公开的电动车最快圈速，也证明了莲花产品的性能。

Qingfeng Feng, Chief Executive Officer, Lotus Technology: In July, Emeya set a new EV lap record at Malaysia’s Sepang International Circuit, surpassing the previously publicly recorded fastest EV lap by a significant margin. Yet another testament to Lotus performance credentials.

Qingfeng Feng, Chief Executive Officer, Lotus Technology: 此外，莲花也发布了2025年可持续发展报告，彰显我们对全球化可持续发展的持续投入。同时，我们和Web5平台Finloop及领先支付机构FOMO Pay签署了MOU，共同探索豪华出行领域的链上支付和实物资产代币化的合规应用。

Qingfeng Feng, Chief Executive Officer, Lotus Technology: Besides, we have published our 2025 sustainability report underscoring our ongoing commitment to global sustainable development. Meanwhile, we have signed MOUs with the Web5 platform Finloop and leading payment institution FOMO Pay to jointly explore compliant applications of on-chain payments and real-world asset tokenization within the luxury mobility space.

Qingfeng Feng, Chief Executive Officer, Lotus Technology: 接下来由我向大家重点阐述公司近期全新发布的Focus 2030战略规划。为适应不断变化的外部环境，我们通过该战略重塑了莲花的核心战略。四大战略支柱包括：一、锚定莲花78年赛道驾控基因，强化品牌传承。二、多动力总成战略，灵活应对全球用户需求差异。三、依托One Lotus整合和吉利生态协同，进一步降本增效，优化财务表现，达到年销3万台即可盈利，实现小而美的可持续发展。

Qingfeng Feng, Chief Executive Officer, Lotus Technology: Now let me turn to the recently unveiled Focus 2030 strategy. Designed to adapt to an evolving external landscape, this strategy redefines Lotus’ core strategic positioning, which rests on four pillars. First, anchoring our brand heritage in 78 years of track-honed driving dynamics. Second, adopting a multi-powertrain strategy to flexibly address diverse global customer preferences. Third, leveraging the One Lotus integration and Geely’s ecosystem synergies to further drive cost efficiencies and operational effectiveness, both optimizing financial performances to achieve profitability at an annual sales volume of 30,000 units, delivering a lean yet productive, sustainable growth model.

Qingfeng Feng, Chief Executive Officer, Lotus Technology: Focus 2030战略第一大支柱是品牌根基的强化与传承。莲花根植于英国赛道赛车基因传承，且依托吉利全球领先科技，为驾驶者提供极致的驾控乐趣。

Qingfeng Feng, Chief Executive Officer, Lotus Technology: Focus 2030 pillar one: strengthening and passing on our brand heritage. Lotus is rooted in a British racing pedigree and powered by Geely’s global leading technology, together enabling the purest driving engagement for enthusiasts.

Qingfeng Feng, Chief Executive Officer, Lotus Technology: 在此基础上，我们针对全球核心区域制定了差异化的品牌落地策略。在欧洲，我们挖掘莲花原赛道的品牌溢价，并通过多动力产品组合强化品牌影响力。在中国，我们把握高端新能源的消费需求，将莲花打造为豪华电动细分市场中，且兼具高性能和智能的代表品牌。在美洲，我们以跑车产品为主，通过Emira在加拿大上市，将拓展北美生活用车市场，同时也将进一步拓展南美的销售网络。在其他地区，我们将持续拓展销售渠道，加强品牌建设，触达更多的新客户。

Qingfeng Feng, Chief Executive Officer, Lotus Technology: On this very foundation, we have tailored brand activation strategies for each of our core global regions. In Europe, we are capitalizing on Lotus’ track-honed brand premium, reinforcing our presence through a multi-powertrain product portfolio. In China, we are tapping into the rising demands for premium new energy vehicles, positioning Lotus as a brand that embodies both high performance and intelligence in the luxury EV segment. In the Americas, our focus remains on sports cars, while the Eletre launch in Canada serves as our entry point into the North American lifestyle vehicle segment. We are also concurrently expanding our sales network across South America. In other regions, we continue to broaden sales channels, step up brand-building efforts, and reach new customer segments.

Qingfeng Feng, Chief Executive Officer, Lotus Technology: 截止6月30号，莲花已经构建了均衡的全球销售网络，全球一共217家门店，欧洲60家，中国65家，美洲53家，其他国家和地区39家。中国和欧洲仍是莲花销售两大核心市场，而北美则是我们跑车的最大市场。

Qingfeng Feng, Chief Executive Officer, Lotus Technology: As of June 30th, Lotus has established a well-balanced global sales network with 217 retail locations, which break down into 60 stores in Europe, 65 in China, 53 in the Americas, and 39 across the rest of the world. China and Europe remain our two core volume contributors, while North America stands as our largest market for sports cars.

Qingfeng Feng, Chief Executive Officer, Lotus Technology: Focus 2030战略的第二大支柱是多元动力策略。在2018年，莲花是第一个喊出全面电动化的豪华品牌，但后来我们也意识到全球电动化发展并不均衡，所以我们及时调整战略规划，选择纯电、混动与燃油三种动力形式并行，并且我们的产品始终坚持以驾驶为中心。

Qingfeng Feng, Chief Executive Officer, Lotus Technology: Back in 2018, Lotus was the first luxury brand to commit to full electrification. However, we have since recognized that the global transition to electrification is far from uniform. In response, we have adjusted our strategic direction in a timely manner, choosing to pursue pure electric, hybrid, and internal combustion powertrains in parallel. Every one of our products remains uncompromisingly driver-centric.

Qingfeng Feng, Chief Executive Officer, Lotus Technology: 产品方面，今年三月我们第一款混动车型Emira已经在中国发售，今年第四季度也会在欧洲进行交付。后续我们将着力打造下一代的超级跑车Type 135，这也是一个混动产品，拥有V6和V8两个动力版本。

Qingfeng Feng, Chief Executive Officer, Lotus Technology: Our first hybrid model, the Emira, made its Chinese debut this March, with European deliveries scheduled for the fourth quarter. Looking ahead, we are focused on developing our next-generation hypercar, the Type 135, and also a hybrid available in both V6 and V8 powertrain variants.

Qingfeng Feng, Chief Executive Officer, Lotus Technology: Type 135 推出将填补 Emira 和 Evija 之间的真空地带，既延续了 Emira 用户对莲花机械体验的情感认同，又以 V8 混动技术向 Evija 的技术标杆地位靠拢，形成产品升维，进一步引领品牌向上。Type 135 将通过轻量化底盘响应等综合优势，重新建立莲花在高性能跑车市场的新技术标杆。我们希望这款跑车产品可以成为品牌旗舰产品，提升公司整体盈利性。

Qingfeng Feng, Chief Executive Officer, Lotus Technology: The Type 135 will fill the gap between the Emira and the Evija, preserving the emotional connection Emira owners have with Lotus’ mechanical handling, while leveraging V8 hybrid technology to approach the technical benchmark set by the Evija. This creates a natural product upgrade and elevates the brand upwards. Through a combination of lightweight design and chassis responsiveness, the Type 135 will demonstrate that Lotus still has what it takes to be a technical benchmark in the next generation of high-performance sports cars. We envision this model as our flagship, one that will enhance the company’s overall profitability.

Qingfeng Feng, Chief Executive Officer, Lotus Technology: Type 135 一经公布就获得了全球莲花粉丝的关注。时隔22年，莲花再次推出中置V8动力车型，它将超过1000匹马力，重量控制在1.5吨级。目前轻量化其实是我们最大的优势，也是挑战。800伏的高压平台架构，还要是混动，又加了V8，再加上电机，重量还要控制在1.5吨，这不是一件容易的事情。举个例子，我们150千瓦的电机通常在75到95公斤，但我们利用F1技术能够把它做到20公斤。我们也会和Horse联合开发8DCT，做到大扭矩的同时重量还要轻。跑车系列方面，如前面提到的，我们优化了产品，推出Emira 400，也推出了一些个性化的产品，比如说Emira Touring。我们之后也会持续推出Emira的迭代，提升Emira作为莲花最后一款燃油跑车的产品价值。

Qingfeng Feng, Chief Executive Officer, Lotus Technology: The Type 135 has already generated tremendous excitement among Lotus fans worldwide. After 22 years, we are bringing back a mid-engine V8-powered model with over 1,000 horsepower, while targeting a total weight of around just 1.5 tons. Lightweight engineering is both our greatest strength and our biggest challenge here. Achieving that target with an 800-voltage architecture, a hybrid system, a V8 engine, and electric motors, all within just 1.5 tons is not easy. To put that in perspective, while a typical 150 kilowatt motor weighs between 75 and 95 kilograms, we have leveraged Formula 1 technology to bring it down to just 20 kilograms. We are also co-developing an eight-speed DCT with Horse, designed to handle high torque while keeping weight to a minimum. On the sports car front, as mentioned earlier, we have introduced the Emira 420 and special editions such as the Emira Touring.

We will continue to roll out new Emira variants going forward, reinforcing its value as Lotus’ final pure combustion sports car.

Qingfeng Feng, Chief Executive Officer, Lotus Technology: 生活用车方面，我们将于八月底推出Eletre 900 Gold和Emeya 900 Gold，后续也将持续提升产品力。Eletre X的推出让主流豪华用车人群有了更多选择，也将扩展莲花的市场和客户群体覆盖。

Qingfeng Feng, Chief Executive Officer, Lotus Technology: In the lifestyle vehicle category, we are also introducing the Eletre 900 Gold Edition and Emeya 900 Gold Edition, available for pre-order starting August. We will keep refining the product competency in this segment. The launch of the Eletre X has given the mainstream luxury vehicle buyers more choices and will further expand the Lotus market reach and customer coverage.

Qingfeng Feng, Chief Executive Officer, Lotus Technology: Focus 2030 战略第三大支柱是深化与合作伙伴的生态协同。生态协同主要分为两块，一是莲花整合，二是深化吉利协同。

Qingfeng Feng, Chief Executive Officer, Lotus Technology: Focus 2030 Pillar 3: deepening ecosystem synergies with partners. Our ecosystem synergies are built on two core pillars Lotus integration and deeper collaboration with the Geely ecosystem.

Qingfeng Feng, Chief Executive Officer, Lotus Technology: 我们已经于上周五，也就是8月21号正式完成对莲花英国的收购，并在加紧推进全面的整合工作。本次整合将莲花英国的赛道基因与莲花科技的前沿技术深度结合，从而明确莲花在豪华汽车行业的独特地位。

Qingfeng Feng, Chief Executive Officer, Lotus Technology: Last Friday on August 21st, we formally completed the acquisition of Lotus UK, and we are now accelerating the comprehensive integration process. This integration combines Lotus UK’s track-bred racing DNA with Lotus Technology’s cutting-edge technologies, further sharpening Lotus’s distinctive positioning in the luxury automotive space.

Qingfeng Feng, Chief Executive Officer, Lotus Technology: 我们将秉承One Lotus战略，品牌上保持全球统一的高性能超豪华品牌调性，确保在任何市场，莲花的品牌形象、产品体验和用户感知都是一致的。治理架构将进一步简化，形成更高效的决策机制，利用灵活调配资源，及时响应市场变动，并将更多精力投入到产品开发和客户体验提升上。整合后，协同效应将全面释放。通过在技术共享、供应链整合、一致管理等环节的协同，消除重复投入与资源分散，实现品牌价值与运营效力的双重提升。

Qingfeng Feng, Chief Executive Officer, Lotus Technology: We are committed to the One Lotus strategy on three fronts. Brand, we will maintain a globally unified premium ultra-luxury brand identity, ensuring that the Lotus brand image, product experience, and customer perception remain consistent across every market. Governance. Our governance structure will be further streamlined to enable more efficient decision making, agile resource allocation, and faster responses to market shifts, allowing us to channel greater focus into product development and customer experience enhancements. Synergy through coordinated efforts in technology sharing, supply chain integration, and unified management. We will eliminate redundant investments and fragmented resource allocation, delivering a dual uplift in brand value and operational efficiency.

Qingfeng Feng, Chief Executive Officer, Lotus Technology: 我们也将持续深化吉利生态协同。吉利体系赋予了莲花其他独立豪华品牌难以复制的系统性的竞争优势，包括先进技术，包括纯电、混动、智能化解决方案，使我们在电动化和智能化技术方面保持行业领先，降低成本，缩短新技术量产周期。依托吉利平台共享，莲花可以更专注于莲花特色的技术发展，包括轻量化、空气动力学、底盘调教等。成熟的供应链，借助吉利全球化的采购规模和供应商网络，我们能够以更具竞争力的成本获取高品质零部件，有效对冲原材料价格波动和地缘政治的风险。还有灵活的生产制造。吉利全球化的柔性生产体系可以帮助莲花加快产品落地节奏，扩大业务规模，建立成本优势。

Qingfeng Feng, Chief Executive Officer, Lotus Technology: We will also continue to deepen synergies with the Geely ecosystem. The Geely group provides Lotus with systematic competitive advantages that other independent luxury brands could find hard to replicate, including advanced technologies across pure electric, hybrid, and intelligent solutions. Geely’s platform enables us to stay at the forefront of electrification and smart technology while reducing costs and shortening the go-to-market duration for new technologies. By leveraging Geely’s shared platform, Lotus can concentrate its R&D efforts on signature technologies such as lightweight engineering, aerodynamics, and chassis tuning. Mature supply chain. With access to Geely’s global procurement scale and supplier network, we can secure high-quality components at more competitive costs, effectively hedging against raw material price volatility and geopolitical risk. Flexible manufacturing. Geely’s global distributed flexible production system helps Lotus to accelerate product launches, scale up operations, and build cost advantages.

Qingfeng Feng, Chief Executive Officer, Lotus Technology: 这种协同是双向赋能的。莲花在极致驾控、空气动力学、轻量化和底盘调教上的独特know-how同样反哺吉利体系，推动集团整体技术向上突破。尤其是我们的莲花工程，覆盖设计服务、动力学、底盘与轻量化等十二大服务领域。自1952年成立以来，持续为全球提供工程服务。赋能吉利的同时，也赋能全行业。我们与吉利研发团队保持常态化联合开发，确保莲花独有的驾控基因得以完整保留。

Qingfeng Feng, Chief Executive Officer, Lotus Technology: Such collaboration is bidirectional empowerment. Lotus’ proprietary know-how in chassis handling, aerodynamics, lightweight engineering, and chassis tuning feeds back into the Geely ecosystem in return, driving technological advancements across the broader group. Our Lotus Engineering division, in particular, covering 12 service domains including design engineering, vehicle dynamics, chassis, and lightweight solutions, have been providing engineering services to the world since its founding in 1952, empowering not only Geely but also the wider industry. We maintain ongoing joint development programs with Geely’s R&D teams to ensure that Lotus’ unique driving DNA is fully preserved.

Qingfeng Feng, Chief Executive Officer, Lotus Technology: Focus 2030战略的第四大支柱是财务优化。Focus 2030战略下，我们更加注重有质量的增长。随着产品矩阵逐步成熟，年销量可达3万台，并实现可持续盈利。

Qingfeng Feng, Chief Executive Officer, Lotus Technology: Focus 2030 pillar 4: financial optimization. Under the Focus 2030 strategy, we place great emphasis on quality growth. As our product portfolio matures, we target annual sales of 30,000 units and sustainable profitability.

Qingfeng Feng, Chief Executive Officer, Lotus Technology: 实现路径主要是，第一，随着品牌建设和产品不断的完善，交付量稳步增长。2026年我们推出了Eletre X，2028年将推出Type 135，充分发挥多元动力战略的灵活性，捕捉不同市场的差异化需求，为销量爬坡提供持续的产品动能。2025到2030销量以年度复合增长率将达到36%。第二个是持续优化毛利率，目标2030年超过20%。收入上通过品牌强化、新车型上市和定制化产品，提升平均售价和利润率。成本上借助莲花整合、吉利供应链与生产上的协同和规模化效应，优化成本结构。第三是在前面两点的基础之上，我们严格执行费用管控。销管研三费占比目标在2030年降至25%以下，从而实现EBITDA的实现转正。

Qingfeng Feng, Chief Executive Officer, Lotus Technology: Our path to achieving these objectives rests on three key drivers. First, delivering steady volume growth through brand building and portfolio expansion. With the launch of the Eletre X in 2026 and the Type 135 in 2028, we are fully leveraging the flexibility of our multi-powertrain strategy to capture differentiated demands across different markets, continuously expanding product portfolio for volume ramp-up. We expect a compound annual growth rate of 36% in sales volume from 2025 to 2030. Second, driving sustained growth margin improvements with a target of exceeding 20% by 2030. On the revenue side, we will raise average selling price and margins through brand strengthening, new model launches and customization offerings. On cost side, we will leverage Lotus integration, Geely supply chain and product synergies and economies of scale to effectively optimize cost control. Third, adopting stricter expense discipline based on the first two drivers. We are implementing rigorous cost control across SGA and R&D with the goal of reducing their combined share of revenues to below 25% by 2030, enabling our EBITDA to turn positive.

Qingfeng Feng, Chief Executive Officer, Lotus Technology: 综上，Focus 2030是一个清晰的盈利路线图，以产品拓展驱动销量增长，以品牌溢价和成本控制驱动毛利率提升，以整合协同和精细化运营驱动利润转正。今年上半年的业绩也正体现了我们正在坚定的方向上持续改善。谢谢大家。

Qingfeng Feng, Chief Executive Officer, Lotus Technology: In summary, Focus 2030 provides a clear and actionable profitability roadmap. Drive volume growth through product expansion, lift growth margins through brand premium and cost discipline, and deliver positive earnings through integration synergies and lean operation. Our first half 2026 business performance already reflects our firm commitment to moving in this direction. Thank you all.

Operator: Thank you. We will now begin the question and answer session. If you would like to ask a question, you will need to press star 1 and 1 on your telephone and wait for your name to be announced. To withdraw your question, please press star 1 and 1 again. If you are able to, please translate your questions into Chinese. Please stand by while we compile the Q&A queue. Thank you. We will now take the first question. This is from Laura Lee from Deutsche Bank. Please go ahead.

Laura Lee, Analyst, Deutsche Bank: Hey, thank you for taking my question. Firstly, I want to check about the Lotus For Me, the PHEV model, since it was launched in March. Could you discuss the order intake, the delivery, and the initial market response and customer profile? What are your expectations for full year sales and margin?

Qingfeng Feng, Chief Executive Officer, Lotus Technology: 目前For Me主要在中国交付。截至6月30号，中国For Me累计大定200台，交付了1800台，基本符合公司的预期。预计在第四季度开始在欧洲交付，并在12月进入中东等国家地区。For Me作为混动车型，因电池容量更小，系统成本更低，毛利率高于纯电车型。同时For Me是一款和吉利深度协同的产品，依托吉利平台共享和规模效应，For Me的毛利率比较可观。目前For Me产量仍在爬坡，我们相信实现稳态后，毛利率可以进一步改善。

Qingfeng Feng, Chief Executive Officer, Lotus Technology: At present, For Me deliveries are primarily concentrated in China. As of June 30, cumulative orders of For Me in China stood at 2,200 units, with deliveries exceeding 1,800 units, largely in line with company expectations. EU deliveries are scheduled to commence in the fourth quarter, with markets in the Middle East and other regions to follow in December. As a hybrid model featuring a smaller battery pack and lower BOM cost, the For Me commands a higher growth margin than our pure electric vehicles. In addition, the model benefits from deeper collaboration with Geely, leveraging platform sharing and economies of scale, which further supports a healthy margin profile. Production and sales of For Me are still in the ramp-up phase, and we are confident that margins will continue to improve as we achieve steady state volumes.

Qingfeng Feng, Chief Executive Officer, Lotus Technology: 2026年上半年，中国市场50万以上的乘用车市场销量为18.5万辆，同比下降了12.8%。在新能源渗透率提升到了40.2%，主要是插混车型渗透率快速提升，从2025年的0.9%提升至21.6%，销量同比增长超20倍，达到了4万辆，取代增程成为最大新能源细分类型。莲花抓住这个机遇，3月底推出了For Me，使莲花在中国50万以上乘用车市场占有率第二季度提升近2%。For Me的用户结构表现也很亮眼。截至目前，全新增量客户占比63%，超七成消费者选购高配版型。下半年我们将通过一体化的试驾体验活动，持续口碑传播，持续产品热度和销量节奏。因为混动车型的增加，莲花在中国的渠道布局得到了进一步改善，加强了北方地区，尤其是西北和东北的布局，为接下来的销量增长打开新的市场。

Qingfeng Feng, Chief Executive Officer, Lotus Technology: In the first half of 2026, the Chinese passenger vehicle market priced above RMB 500,000 recorded sales of 185,000 units, down 12.8% year-on-year. However, new energy penetration in this segment climbed to 40.2%, driven primarily by a sharp rise in PHEV penetration from 0.9% in 2025 to 21.6% in the first half of 2026. PHEV sales surged more than twentyfold year-on-year to 40,000 units, overtaking range extenders as the largest new energy sub-segment. Seizing this opportunity, Lotus launched the For Me in late March, lifting our market share in China’s above RMB 500,000 passenger vehicle segment to nearly 2% in the second quarter. The customer profile for For Me has also been highly encouraging. To date, 63% of buyers are new to the Lotus brand, and over 70% of customers have opted for the higher spec variant.

In the second half, we will sustain momentum through integrated test drive experience events and ongoing word-of-mouth marketing to maintain product buzz and sales cadence. With the addition of hybrid models, Lotus dealership footprint in China has been further optimized, particularly in the northern region, with plans in the northeast and northwest opening up new markets for future sales growth.

Qingfeng Feng, Chief Executive Officer, Lotus Technology: 在欧洲上半年，我们正式启动了Eletre X的订单收集，为下半年及未来销量增长提供新的动力。2026年上半年，欧洲€70万以上的SUV销量为16.4万辆，新能源渗透率维持在52%的高位，其中插混SUV销量5.8万辆，占新能源的占比近70%。欧洲上半年已完成多轮营销的预热，取得积极正面的市场反馈，为产品上市建立市场基础。同时，我们在欧洲持续推进数字化营销策略，为下半年订单转化建立客户储备，进一步扩大潜客规模。欧洲营销策略将由品牌曝光逐步转向销售转化。通过多元深度体验活动和持续的线上传播，加强客户运营，提升客户转化力。Eletre X的推出还是有效帮助公司打开了纯电产品无法覆盖的部分市场与细分赛道。所以我们对Eletre X在欧洲上市交付后带来的增量同样充满信心。

Qingfeng Feng, Chief Executive Officer, Lotus Technology: In Europe, we formally commenced order taking for the Eletre X in the first half, adding a fresh growth driver for the second half and beyond. In the first half of 2026, EU SUV sales above €70,000 reached 160,000 units, with new energy penetration remaining high at 52%. Within that, PHEV SUVs accounted for 58,000 units, representing nearly 70% of the new energy mix. We conducted multiple rounds of marketing pre-launch activities in Europe during the first half, generating positive market feedback and establishing a solid foundation for the product rollout. In parallel, we have been advancing our digital marketing strategy across Europe, building a customer pipeline to support order conversion in the second half and further expanding our prospect base.

Our EU marketing strategy will gradually shift from brand awareness to sales conversion, leveraging diverse in-depth experience events and sustained digital engagement to strengthen customer relationships and improve conversion rates. The introduction of the Eletre X has effectively enabled us to access market segments and niches that our pure electric offerings alone could not cover. As such, we are equally confident in the incremental volume that the Eletre X will deliver following its European launch and deliveries.

Qingfeng Feng, Chief Executive Officer, Lotus Technology: Thank you.

Laura Lee, Analyst, Deutsche Bank: Okay, got it. Appreciate the color. Secondly, I want to check about the Type 135 certified hybrid sports car that you’re planning to launch. Could you provide any update or could you introduce a bit the strategic rationale or logic behind this model?

Qingfeng Feng, Chief Executive Officer, Lotus Technology: Type 135是莲花下一代下一阶段非常重要的高性能混动产品。品牌层面，如刚才提到，Type 135是时隔22年再次推出的中置V8产品，将通过莲花空气动力学、轻量化和悬架调教的技术，树立高性能跑车的新标杆，再次向市场证明莲花以赛道工程塑造公路驾驶体验的能力，进一步夯实品牌竞争和品牌形象。Type 135将填补Emira和Evija之间的产品断层，形成Emira燃油入门跑车、Type 135混动旗舰超跑、Evija收藏级极致性能的hyper car的完整跑车矩阵，引领莲花品牌向上。Emira有GT4，我们会参加GT4比赛，也取得了一些成绩，在澳门的格兰披治大湾区GT杯。Type 135出来以后，我们会进入到GT3的赛事领域。同时Type 135的推出也能够赋能生活用车系列，搭配Eletre X豪华混合SUV、Eletre和Emeya的纯电高端车型，多元动力产品覆盖，拉升生活用车的品牌认可度。

Qingfeng Feng, Chief Executive Officer, Lotus Technology: The Type 135 is a critical high-performance hybrid product for Lotus in the next phase of our development. As mentioned earlier, the Type 135 marks the return of a mid-engine V8 model after 22 years. Leveraging Lotus’s expertise in aerodynamics, lightweight engineering, and chassis tuning, the Type 135 will establish a new technical benchmark for high-performance sports cars, reaffirming to the market our ability to translate track-bred engineering into extraordinary results in driving experience. The first step solidifying the Lotus brand ethos and image. The Type 135 will bridge the product gap between the Emira and the Evija, creating a complete sports car portfolio that spans the Emira as the entry-level combustion sports car, the Type 135 as the hybrid flagship hypercar, and the Evija as the collectible ultimate performance hypercar, positioning the Lotus brand for decisive upward growth.

On the motorsports front, the Emira already competes in GT4 events where we have achieved notable results, including podium finishes at the Macau Grand Prix Greater Bay Area GT Cup. With the Type 135, we will take the next step forward and enter GT3 competitions. Beyond its brand-boosting effects, the Type 135 will also elevate our lifestyle vehicle lineup, complementing the Eletre X luxury hybrid SUV, the all-electric Eletre, and the premium sedan Emeya. This multi-powertrain strategy coverage will enhance brand definition and appeal across our lifestyle vehicle portfolio.

Qingfeng Feng, Chief Executive Officer, Lotus Technology: 从市场需求来看，跑车市场核心竞品销量表现亮眼，2022年到2025年销量年复合增长率为7%到9%，2025年全球市场总销量达到了15万台，预期2028年市场容量最高可达到19万台，2030年可达到22万台。美国60万以上跑车市场逐年增加，且欧洲60万以上高端跑车混动化趋势明显。2026年上半年混动跑车占比从2025年的26%进一步提升到35%。欧美核心跑车圈层高度认可内燃机声浪、机械驾驶质感，纯电超跑受电池重量赋能约束，难以打动传统性能买家。而Type 135的混动V6加V8的方案，既能满足全球碳排放法规，又完整保留莲花轻量化、空气动力学、赛道极致驾控的核心基因，可以填补市场空白。

Qingfeng Feng, Chief Executive Officer, Lotus Technology: From a market demand perspective, sales of our core sports car competitors have been impressive, with a compound annual growth rate of 7%-9% from 2022 to 2025. Global sports car sales reached 150,000 units in 2025, with the addressable market expected to pick up at up to 190,000 units in 2028 and 220,000 units by 2030. In the U.S., the above $600,000 sports car segments have shown steady year-on-year growth. While the premium above $600,000 sports car market in both Europe and the U.S. is seeing a clear trend towards hybrid transition, with the hybrid share rising from 26% in 2025 to 35% in the first half of 2026. Core sports car enthusiasts in Europe and the U.S. place high value on the visceral appeal of internal combustion engine sound and the mechanical driving authenticity.

Pure electric supercars, constrained by battery weight and charging infrastructure, have struggled to win over traditional performance buyers. The Type 135’s hybrid V6 plus V8 approach offers the ideal solution, delivering compliance with global emission regulations while preserving the essential Lotus DNA of lightweight engineering, aerodynamics, and extreme track-focused driving dynamics, filling a clear gap in the market.

Qingfeng Feng, Chief Executive Officer, Lotus Technology: 技术层面，莲花70多年的发展中，动力上的不足是我们最吃亏的，一直通过外采的方式。这次依靠吉利的支持和技术赋能，我们和Horse联合打造高性能动力总成，发挥莲花轻量化、空气动力学设计及极致工程调教的技术擅长，协同吉利资源、全球化供应链和规模化优势，满足Type 135动力需求的同时，也平衡研发投入与单车成本。这项技术之后也可以赋能Eletre X后续换代车型。

Qingfeng Feng, Chief Executive Officer, Lotus Technology: On the technology front, over Lotus’s more than 7 decades of history, limited in-house powertrain capabilities have been our most significant handicap. We have traditionally relied on outsourcing. This time, with Geely’s strong support and technology enablement, we are co-developing a high-performance powertrain with Horse. This collaboration allows us to leverage Lotus’s core strengths in lightweight engineering, aerodynamic design, and sophisticated chassis handling while tapping into Geely’s resources, global supply chain, and scale advantages, meeting the Type 135’s power requirements while balancing R&D investments and per-unit costs. This technology will be applicable to future generations of the Eletre X.

Qingfeng Feng, Chief Executive Officer, Lotus Technology: Type 135 将继续围绕莲花最核心的品牌原则开发。目前的产品处于开发阶段，更多技术和产品细节将在合适的时间进一步公布。谢谢。

Qingfeng Feng, Chief Executive Officer, Lotus Technology: The Type 135 will continue to be developed around the most fundamental principles of the Lotus brand. As the product remains in the development phase, further technical and product details will be disclosed at an appropriate time in the future. Thank you.

Laura Lee, Analyst, Deutsche Bank: Okay, got it. That’s very helpful. If I can just make one more question. How do you plan to sustain the growth momentum in the second half of this year? How should we think about the growth drivers? Thank you.

Qingfeng Feng, Chief Executive Officer, Lotus Technology: 按照不同的国家和地区来说一下。首先是中国，通过一体化的试驾体验活动，保持For Me上市的热度和节奏，维持住Q2的销量节奏。那么我们也已经发布了莲花Emira 420 Sport和莲花Eletre、Emeya双黄金900系列。通过高性能新产品的推出，拉升品牌的知名度和价值标签，提升市场关注度，加强用户运营，提升用户转介绍率。通过混动加强北方销售渠道布局，对部分高潜力渠道进行经销商迭代，把市场机会转变为销量结果。

Qingfeng Feng, Chief Executive Officer, Lotus Technology: We have developed different strategies and plans for different regions. For example, for China market, first, we are going to maintain the market momentum and launch cadence of the For Me through an integrated test drive experience program, sustaining the sales cadence established in Q2. Second, we have also introduced the Lotus Emira 420 Sport and the Lotus Eletre and Emeya 900 Gold Edition. These high-performance new products will elevate brand awareness, reinforce our value proposition, and multi-ways market engagements. Third, strengthen customer engagements and increase the customer referral rate. And fourth, leverage hybrid models to enhance our sales network footprint in Northern China, upgrading distribution network in high potential markets to convert marketing opportunities into tangible sales results.

Qingfeng Feng, Chief Executive Officer, Lotus Technology: 在欧洲呢，Eletre X上市带动前期的市场需求逐步回释放，下半年营销策略将由品牌曝光逐步转向销售转化，聚焦高转化渠道和客户运营。那么继续推进重点市场渠道建设，进一步完善经销商网络及零售运营的能力。

Qingfeng Feng, Chief Executive Officer, Lotus Technology: In Europe, we will first start with the launch of Eletre X, which will progressively unlock initial market demands. Second, in the second half, our marketing strategies will shift from brand exposure to sales conversion with a sharpened focus on high conversion channels and customer relationship management. Lastly, we will continue advancing channel development in key markets, further optimizing the dealer network and retail operational capabilities.

Qingfeng Feng, Chief Executive Officer, Lotus Technology: 那美洲呢，是巴西，是美洲除了美国和加拿大外的第三大销量引擎，下半年将正式启动交付。随着Emira 420 Sport和Model Y 27的推出，强化Emira的驾驶乐趣与驾驶为中心的市场定位，承接停产718的需求，加强开放订单的经销商转化和预定新增。

Qingfeng Feng, Chief Executive Officer, Lotus Technology: As for the American region, Brazil, our third largest volume driver in the American region after the U.S. and Canada, will officially commence deliveries in the second half. Besides, with the introduction of the Emira 420 Sport and Model Y27, we will reinforce the Emira driver-centric positioning centered on driving engagements, capture demands created by the discontinuation of the Porsche 718, and accelerate order conversion at the dealers while generating new pre-orders.

Qingfeng Feng, Chief Executive Officer, Lotus Technology: 其他地区呢，下半年最重要的大事件是中东区域的PHEV产品正式上市，计划年底Eletre X正式登陆中东地区，推动销量的上涨。此外，随着Emira 420陆续进入全球市场，预计将在中东区域、澳大利亚等地区国家能够贡献销量增长。还有，我们会持续进行网络的拓展，包括高加索地区和中东。For the rest of the world market, the most significant milestone for the second half is the official market launch of the PHEV product in the Middle East, with the Eletre X scheduled to arrive in the region by year-end to drive volume growth.

Additionally, as the Emira 420 rolls out to global markets, we expect it to contribute incremental sales in the Middle East, Australia, and other countries and regions. We will also work on continued network expansion, including the Caucasus regions and the Middle East regions. Thank you.

Laura Lee, Analyst, Deutsche Bank: Okay, got it. Appreciate the color.

Operator: Thank you. We will now take our next question. This is from the line of Jiang Xiao from Barclays. Please go ahead.

Jiang Xiao, Analyst, Barclays: 谢谢主持人让我提问的机会。我这边有两个问题，第一个我想追一下我们Focus 2030的计划。然后我们刚刚也提到了，我们有稳态年交付3万台的计划，然后毛利率超20%，然后EBITDA转正。就想请教一下管理层设置这些目标时背后的思考、信心的来源和目前的进展。然后第二个就是我们刚刚完成的收购，我们现在已经正式交割了莲花英国，能否给我们更新一下交割后的财务影响，然后大概什么时候会发布合并后的财务数据？I’ll translate myself.

My first question is about Focus 2030. We have guided towards a steady ramp-up to 30,000 deliveries, over 20% gross profit margin, and positive EBIT under the plan. Can management comment on your thinking when setting up these goals? What gives you the confidence and progress you have seen so far? My second question is around our Lotus UK acquisition. Can management give us an update on financial impact and guidance post official closing of the transaction? When will the company start to disclose consolidated results? Thank you.

Qingfeng Feng, Chief Executive Officer, Lotus Technology: 首先第一个问题我先来说一下，后面由我们的CFO来补充一下。那么第二个问题由我们CFO来回答。首先我们对中长期经营目标具备充分的信心。支撑逻辑分为四层。首先在品牌端，通过全球赛事的运营，比如Lotus Cup、莲花驾驶培训、混动旗舰超跑Type 135推出等活动，持续夯实莲花78年的性能基因，加强品牌价值提升。那么渠道端，截至6月30日，欧洲、中国、美洲及世界其他国家合计217家零售门店，新进入巴西、巴拉圭、厄瓜多尔等南美市场。我们将持续全球的渠道持续扩张，对现有渠道持续优化迭代，加强用户运营，提升用户转化力。在产品端，至2030年形成完整车型的矩阵，覆盖全豪华性能细分，插混、纯电双新能源走量，满足不同市场的用户需求。跑车彰显品牌从赛道到道路的驾驶体验，提升品牌溢价。目前推出的Eletre X已在中国及六个海外市场开启交付，第四季度登陆欧盟市场，中东地区将于年底交付。英国市场的计划于2027年中启动交付。这些都将贡献销量增长。2028年也会推出旗舰混动跑车Type 135，进一步拉动销量提升。

Qingfeng Feng, Chief Executive Officer, Lotus Technology: I will take the privilege to answer your first question and leave the second question to our CFO. We have strong confidence in our medium to long term operating targets, underpinned by the following pillars. First, brand. Through global motorsports events, for example, Lotus Cup and Lotus Driving Academy, and the launch of the hybrid flagship hypercar Type 135, we will continue to reinforce Lotus’ 78 years performance DNA and elevate brand value. Next, channels. As of June 30, we operated a total of 217 retail stores across Europe, China, the Americas, and the rest of the world, with new market entrants into Brazil, Paraguay, Ecuador, and other South American countries. We will sustain global channel expansion, continuously optimize and upgrade our existing network, strengthen customer engagement, and improve conversion rates. Finally, product.

By 2030, we will establish a comprehensive product portfolio covering the entire luxury performance spectrum with both plug-in hybrid and pure electric high-volume models to address diverse customer needs across different markets. Our sports cars will showcase Lotus’ driving DNA running through tracks to roads, and enhance brand premium. We have already launched the Eletre X, with deliveries underway in China and six overseas markets. EU market entry is scheduled for the fourth quarter, Middle East deliveries by year-end, and the U.S. market launch planned for mid-2027, all of which will contribute to volume growth. In 2028, we will also introduce the flagship hybrid hypercar Type 135, providing an additional boost to sales height.

Michelle Ma, Head of Investor Relations, Lotus Technology: 这个CFO方面再补充一下。

Daxue Wang, Chief Financial Officer, Lotus Technology: Thank you. Thank you, Michelle, for your questions. I will compliment the first question with my views on the financial part, and I will answer your second question. For the first question, our focus is very on the financial side to lower the costs. We will focus on driving synergies across multiple stakeholders. First, supply chain collaboration and manufacturing scale with Geely. For lifestyle vehicles, over 50% of components are shared with Geely. Leveraging Geely’s centralized procurement and scale advantages, Lotus gains access to a broader pool of high-quality global suppliers to deliver the meaningful cost reductions. Secondly, R&D platform sharing with Geely. Full in-house development of vehicle architectures by the company alone may require over $1 billion investment. By building on Geely’s underlying platforms and embedding Lotus-specific technologies, we can materially lower the R&D spending.

Thirdly, the full integration of Lotus UK will unlock substantial synergy benefits. In parallel, we will diversify revenue streams through the high-end customization and limited edition models, supporting our target of lifting gross margin above 20%. Concurrently, we will pursue refined operational management, exercise tight expense control, and further unlock operating leverage to deliver the profit positive. I mean, under our Focus 2030 strategy, we will prioritize development quality and profitable growth rather than pursuing the sales volume for its own sake. That ends my answer for the first question. I will continue with your second question regarding the synergies with One Lotus. As you know, the combined Lotus brand will preserve its global consistent positioning as a high-performance luxury provider. The Hethel U.K. site will focus on the ICE and PHEV sports car lines, pursuing a differentiated strategy centered on the limited edition models.

The Wuhan China facilities will lead BEV and PHEV lifestyle vehicles under the volume production strategy. We will also prioritize operational integrations, spanning shared R&D, manufacturing, and supply chain functions with the goal of building Lotus into a globally competitive high-performance auto brand. Integration and synergies across shared R&D capabilities and supply chain capabilities will enable further cost reductions and efficiency gains for the group. Financially, we expect top-line growth for two key reasons. First, Emira vehicle sales in the U.S. will be fully recognized as gross vehicle revenue. At pre-consolidation, such proceeds were only accounted for under the net revenue method. Second, service revenue from Lotus UK will be consolidated into the listed company, bringing in Lotus UK’s vehicle and service. Gross margins will also improve the group’s overall gross margin profile.

From an expense standpoint, the near-term consolidation of Lotus UK’s R&D, administrative, and other costs may result in a wider group level loss. Going forward, we will strengthen the integration across R&D, commercial, and support functions teams from both organizations, streamline the organizational structure, adopt lean cost management practices, and lower the operating expense to revenue ratio. Given this is a business under the combination, under the common control, pursuant to the financial disclosure rules, the company is required to carry out retrospective restatement for the consolidated financial statements. This statement for the fiscal year 2025 has been initiated. We expect the restated financial restatements to be disclosed no later than the release date of the 2026 annual report. For this part, please stay tuned with our announcement and public release. Thank you.

Jiang Xiao, Analyst, Barclays: Thank you. Very helpful.

Operator: Thank you. We will now take our next question. This is from Brian Lantier from Zacks. Please go ahead.

Brian Lantier, Analyst, Zacks: Good evening, everyone. Thank you. Really impressive results, considering the challenging operating environment in the domestic market in China. I am just going to tighten together a couple of questions together into one. Could you talk about some of the drivers behind the gross margin improvement from 8% to 10% in the first half? I have a sense that you have already touched on this. It is probably a shift in mix towards the lifestyle vehicles. So despite a lower average selling price, we are seeing better margins there. If you could just give me a little bit of an insight into how memory costs are impacting your margins and what your outlook for that is going into 2027. Thanks.

Daxue Wang, Chief Financial Officer, Lotus Technology: Thank you, Brian. I will take your question. The gross margin improvement was driven primarily by two factors. First, the product mix optimization. The delivery share of the higher margin BTU modules grew significantly, effectively lifting the overall gross margin. Secondly, the supply chain synergies and economy of scale gradually took effect, with the per-vehicle manufacturing costs continuing to decline, supported by Geely’s global supply chain system and flexible production capabilities. This also marks the first substantive financial validation since the launch of the Focus 2030 strategy. Thank you. For your second question regarding the pricing volatility of the chips, my understanding is like this, the chip price volatility alone drove a nearly 2% increase in our BOM costs. In saying that, the chip pricing did give some pressure on the company’s gross margin in the first half of the year.

In response, company has been actively collaborating with the Geely group to expand the supplier base and navigating through the volatility smoothly. Plus, we intensified BOM cost optimization to offset the chip-driven cost increase. Consequently, company’s gross margin in the first half of 2026 improved compared with 2025. Regarding the price of chips since the fabric price stabilization, we believe the core drivers of this round of price increase is caused by the AI server capacity crowding out the supply of the automotive, grade DRAM, and NAND chips. Based on the upstream wafer expansion schedule and visibility into our chip supply chain, we expect supply and demand to rebalance around late 2026 and early 2027, with the price returning to a reasonable range. As the industry cycle eases, the company’s gross margin will have further room to improvement. Thank you so much.

Brian Lantier, Analyst, Zacks: Great. Thank you so much for that.

Operator: Thank you. We have no further questions at this time, so I will hand the conference back to Michelle Ma for closing comments.

Michelle Ma, Head of Investor Relations, Lotus Technology: Thank you all again for joining us today. We will conclude the call now. The investor relations team remains available to answer any further questions you may have. Please feel free to contact us through the contact information on our website, ir.group-lotus.com. Have a good day, everyone. Thank you.

Operator: Thank you. This concludes today’s conference call. Thank you for participating, and you may now disconnect. Speakers, please stand by.