SHANGHAI (Nov 26): Lotus Technology, a new unit of China's Geely set up to develop the technology to power Lotus sports cars, is planning to raise US$400 million to US$500 million before the end of this year, its chief financial officer told Reuters.
Lotus Technology, part of Group Lotus, which is in turn owned jointly by the Chinese automaker and Malaysia's Etika Automotive, intends to kick off the funding round before Christmas, Alexious Lee said in an interview.
That will give Lotus Technology a post-money valuation — value of a company after a round of financing from external investors —of US$5 billion to US$6 billion, Lee added.
Lee said the firm will launch its first product — an electric sports utility vehicle — in the first quarter of next year and aims to have three models within the next five years.
"We have gotten a lot of traction especially from international investors, because wow, this is Lotus," said Lee, adding that the company was looking to sell a 10% to 15% stake.
The company will spend more than half the new funds on research, and 30%-40% on marketing with the remainder going to working capital.
Lee said Lotus Technology remained on track for a potential initial public offering as soon as 2023, likely in New York or Hong Kong.
Lotus Cars, the maker of the Lotus Esprit, famously driven by James Bond in 1977's "The Spy Who Loved Me", positions its vehicles in a segment similar to rival Porsche. It is set to open a new factory in Wuhan, China next year.
"We are an asset light business because we don't own our own manufacturing. It's owned by our parent," said Lee.
Premium and luxury car sales are growing in China, as coronavirus pandemic travel restrictions leave consumers in the world's biggest car market with more money to spend.
Lotus Tech's investors include Nio Capital, an investment firm founded by the CEO of Chinese electric vehicle maker Nio Inc, which valued the unit at 15 billion yuan in September.
(US$1 = 6.3909 Chinese yuan)