Core Viewpoint - The ultra-luxury car market in China is experiencing a significant downturn, with a 53% year-on-year drop in sales of vehicles priced over one million yuan in Q1 2025, indicating a faster contraction than the overall industry [1] Group 1: Market Performance - In Q1 2025, sales of million-level luxury cars fell to 21,000 units, a stark contrast to the stable annual sales of around 200,000 units from 2021 to 2023 [1][2] - Lotus Technology reported a 46% decline in revenue year-on-year, but also showed signs of recovery with a 56% reduction in operating losses and an increase in gross margin from 3% in 2024 to 12% in Q1 2025 [2][4] Group 2: Financial Metrics - Lotus's operating loss decreased from $233 million in the previous year to $103 million, while adjusted EBITDA improved from -$200 million to -$136 million, reflecting a 33% reduction [4] - The gross margin increased from 7% to 12% in Q1 2025, indicating a strong recovery despite still being lower than the previous year [5][6] Group 3: Market Strategy - Lotus is focusing on cost control and efficiency improvements, with a continuous decline in operating expenses over six quarters [4] - The company is also diversifying its market presence, achieving a balanced distribution of sales across Europe, China, and North America, each accounting for 32% of total sales [8] Group 4: Future Outlook - The ultra-luxury car market in China is expected to have a long-term demand ceiling, despite current challenges, as the economic level continues to rise [11] - Lotus aims to leverage its historical brand value and technological advancements to differentiate itself in a competitive market, focusing on electric and hybrid models [13][14]