Geely’s Lotus Technology aims to raise up to $500m in funds

Lotus Technology, a new unit of China's Geely set up to develop the technology to power Lotus sports cars, is planning to raise $400m to $500m (roughly R6,475,360,000 to R8,099,500,000) 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.

That will give Lotus Technology a post-money valuation – value of a company after a round of financing from external investors – of $5bn to $6bn (roughly R80,995,000,000 to R97,194,000,000), Lee said.

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 received a lot of traction, especially from international investors, because this is Lotus," said Lee, adding 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% to40% 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 15bn yuan (roughly R38,053,409,000) in September.