„Every Lotus sports car is electrified“

“Every Lotus sports car is electrified”.

The Corona pandemic has hit the auto industry hard. What is the situation like at Lotus?

Popham: It’s an advantage that Geely steered us through the crisis. They knew, unlike companies in Europe and the UK, what we were facing and how to prepare. We knew that a lockdown was probably inevitable. So we invested about £400,000 extra in IT and other systems to make sure we could work offsite as much as possible.

How did it go down?

Popham: When the lockdown came, on March 23, we had to shut down our production facilities within 24 hours. We were able, through our prior actions, to have about 50 percent of our workforce – including most of our engineers, designers and managers – working from home. Our plant was closed to production for about seven weeks. We ramped it back up on May 18. In July, we will be back close to 100 percent efficiency in production.

We have to look across the entire value chain. For example, our suppliers, who are spread across the country. We need plans on how they will safely deliver the material. So far, suppliers are not faltering. Although there have been a few challenges. On the other side of the chain are our distributors. We’re now back to about 95 percent open worldwide.

What are the lessons learned?

Popham: Right now, only those who actually have to are back on the job. With the exception of one or two employees who need to protect themselves because of their personal circumstances. The majority who worked in the home office are staying there. I have no doubt that this pandemic will impact the way we work. The world of work is becoming more flexible. But it’s about flexibility based on efficiency. We’ve learned a lot in the last three months about how people can work off-site. Now the discussion will turn to what are the benefits of home office, and what is better done in the office. How do you get a mix together to be more efficient and get the most productivity possible?

What is the impact of the production shutdown on the rest of the year? Can you catch up?

 

Popham: No, we can’t. If we include the ramp-up period, we’re missing about ten weeks in production. We’ll make up a little bit of that. We are forecasting a retail position that is under our budget. We have to be realistic because the market has to recover first.

The numbers will be lower than we anticipated before the crisis. We have measured our production capability and our necessary parts supply on that basis. It is important that we match supply, operations and demand. We don’t want to build too little, but we also don’t want to have too much in stock. That certainly has an impact on our sales. But in a way, we’re in the fortunate position that the majority of our investments are going into our growth, into our future projects. We are expanding our plant in Hethel. The financing is coming from our shareholders.

What’s the plan there?

Popham: We have a ten-year plan, which we call Vision 80 – in reference to our 80th birthday. We developed the plan 18 months ago – so on our 70th company birthday. It’s a ten-year plan. The first half is supported by financial injections from our shareholders. Covid-19 and the production freeze are hurting our sales, but not our spending on production and expansion of our plant.

What would have happened without Geely?

Popham: Without the solid financial platform, we would have been in a very different position. A crisis like this has a severe impact on your working capital. But that doesn’t take away our responsibility to look after costs. We don’t want to take money away from model programs and turn it into working capital. But we’re not afraid of running out of money. Which, after all, is what a lot of companies have right now. Not just in the automotive world, but in general.

Would Lotus have faced bankruptcy without Geely in such a crisis?

 

Popham: That’s a good question. We’re still a small company that sells few cars. We are a bigger company in terms of our investment volume. I think small companies and marginal businesses are stumbling – and Lotus could very well be one of them without Geely. If you take the Lotus that was there three years ago, I’m sure we would have been very vulnerable.

What about your prestige project Evija? Have you slipped out of the time frame there.

Popham: What is not affected are the manufacturing buildings. We finished those during the shutdown. There’s a lot of construction going on here in Hethel. Not only for the Evija, but also for other new products. Because we didn’t actually have access for seven weeks, at least the construction workers were able to speed up the manufacturing process of new buildings. So we’re pretty well positioned there. What has been affected is the technical testing. We do the main development in Europe. We had to stop it for ten to twelve weeks because of the restrictions. That will have an impact, which we’re still evaluating.

What does that mean?

Popham: We were going to go into production with the Evija at the end of the year. We can’t confirm that right now because we have to see how badly the delays affect us first. We’re back testing now, but we don’t know how much we can catch up.

Lotus currently has three model ranges: the Elise, Exige and Evora. The Evija and a new sports car are coming soon.

You unveiled the Evija in June 2019. Will you be able to deliver on the technical promises of 2,000 horsepower, 1,700 Newton meters and 320 km/h top speed?

Popham: Our goals and performance remain the same.

It’s your first electric car. What problems are you encountering?

Popham: The program is pretty tight and designed for a small time frame. As with any program, there are challenges to overcome. We have an incredibly good team to do that. And we continue to ramp up that engineering team. In the last two years, we’ve hired about 300 new engineers. Many of them work at Evija. They bring expertise and experience from other companies in the industry. Everyone can see the great potential to rejuvenate Lotus over the next decade. With the financial backing we have with our owners. That attracts a lot of good people. Not just engineers, but from other areas as well.

It’s an ambitious project. We want to make the most powerful production car in the world. It’s the UK’s first all-electric hypercar. We have to support it the Lotus Engineering Consultancy, which has been involved in at least half a dozen projects over the last decade that have looked at electric mobility. So we’re bringing in new talent and combining it with existing knowledge.

Can you give an example or two of what is particularly challenging?

Popham: It’s quite simply new technology. That’s why the testing phases are so critical. We have to confirm all the assumptions and results in reality. So far, the test results have been positive. The other challenge – and this applies not just to the hypercar, but to all electric cars – is the issue of lightweight construction. We are focusing strongly on this. We’re putting a lot of technology into manufacturing the carbon chassis – Formula 1 technology is going in there to make sure we can balance the weight of the battery. We want to build not only the most powerful electric hypercar, but also the most dynamic. Performance and handling: Just like you’d expect from a Lotus. And a lot of little things just come to light during test drives.

You mentioned your Vision 80. How many new cars does Lotus plan to bring to market during this period?

Popham: I can only tell you that we are building another sports car in addition to the Evija. We’ll show that during 2021. It will be the last Lotus sports car that doesn’t have an option for electrification. We see the future within our vision in electrification. We want to be a leader in that. At the same time, we believe the brand is strong enough to enter other new segments. I can’t tell you too much about this. We have analyzed which other segments make sense for us. What is certain is that we will see the DNA of Lotus in other segments.

In other words, the 2021 sports car will be the last with an internal combustion engine?

Popham: It will have an internal combustion engine. And be the last sports car that doesn’t offer full electrification. We see our long-term future with a large electric component. That’s where the market is heading. The new sports car with an internal combustion engine will appeal to a wider target group than our current cars do. We want to address some weak points without sacrificing performance: entry, exit, connectivity, storage compartments. It’s meant to be a sports car for everyday driving. The electric architecture is being revised.

Does that mean that you will have two versions of each in the future: Internal combustion and electric? Or will you have to choose one direction?

Popham: Possibly. That’s one of the challenges we have to work through. We want to sharpen our weapons. When we build a new platform, we want to pull different derivatives from that to make sure our investment pays off. Whether that leads to us putting internal combustion and electric on the same platform is yet to be decided. But we recognize that the market is turning toward electrification – regulatory, and because customers are following that trend.

In other words, you don’t believe in the future of the combustion engine in sports cars.

Popham: In the long run, I see it as difficult. If only because of the regulations. Regarding emissions, for example. Some countries have already declared a date for the end of the internal combustion engine. I think there is still a great business opportunity if we look at the past and heritage. There is a big market emerging for historic cars, which is being promoted by manufacturers. I see this as an opportunity for Lotus. But for the future of the sports car, I see electrification as the winner.

That’s exactly the right approach. Sports cars and electrification: it fits.

It’s the wrong way to go. A sports car should have a combustion engine. And if that doesn’t work, something other than battery technology should.

How do you see the two worlds combining? In other words, the plug-in hybrid

Popham: Hybrid is a big challenge. Even if you just put a small internal combustion engine in a sports car. Then you add the peripherals and the transmission. That combined with the electric components makes for a weight problem. There are also packaging issues because sports cars are by definition smaller and lower. Electrification alone allows the battery to be put where it will get the most use. In terms of the center of gravity and the overall dynamics of the car. You have more freedom in design and aerodynamics. We see significantly more benefits of total electrification than just building half the house.

Are you considering other technologies like synthetic fuels or hydrogen?

Popham: There will be other technologies. But I think the focus will be on electrification. It’s not just about the technology in the cars, but also the infrastructure that’s being created around it. There is no doubt that large investments are flowing into electrification worldwide. The infrastructure, the charging stations – even the oil companies are taking care of it. Governments are incentivizing it.

What can you say about the price, size and layout of the new sports car from 2021?

Popham: We will price our new sports car within the existing model range. So it won’t be cheaper or more expensive. Unfortunately, we can’t say anything about the seat configuration or size at this moment. But rest assured, you will be one of the first to see the car.

Will there be a baby Evija?

Popham: I don’t know. Right now, our focus is on continuing to test the Evija and bringing it to market successfully. After that, we will gauge the size of the market: If we discover there are gaps we can poke into, I wouldn’t rule it out. But it’s not part of our future planning at the moment.

What about the cooperation with Toyota, which has supplied Lotus with combustion engines for years?

Popham: We are in a position that allows us to draw on Geely’s technology. But they don’t restrict us to their pool of companies. We can collaborate with other companies. We’re not going to build our own engines. Our expertise is aerodynamics, chassis dynamics, the design of the car. So we will continue to collaborate with other companies – inside and outside the Geely Group.

 

70 Jahre Lotus, Fahrbericht, spa032019

Will manual transmissions become extinct?

Popham: That’s an interesting question because we are delivering significantly more cars with manual transmissions compared to the segment. If you look at the statistics, you can see that more and more customers are opting for automatic transmissions. Automatic transmissions with paddle shifters on the steering wheel that give you the benefits of a manual. Electrification is not about whether you change gears yourself, but how you engage the driver in the driving experience. We want to build the most engaging cars. We need to be aware of the tools we need to make that happen, so that the driver fully enjoys every drive.


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