The BBC has learned that Lotus, a manufacturer of sports cars, is exploring the possibility of ending production at its UK headquarters and setting up a new plant in the United States.
This potential move could put 1,300 jobs at risk in Hethel, Norfolk.
Lotus did not provide any comment when asked about these plans, which were first reported by the Financial Times. However, sources within the company have confirmed to the BBC that the situation is being reviewed and the idea of moving production to the US is being considered.
This decision comes after production at the Hethel location was temporarily halted due to disruptions caused by the implementation of tariffs on imported cars in the US.
The US is a significant market for Lotus, but these tariffs pose a threat to their business as American buyers are required to pay a 25% tax on imported cars and car parts.
Recent data from the UK’s car industry shows that exports to the US have decreased by half, as President Donald Trump’s tariffs have caused some car manufacturers to stop shipping to the US.
The UK government and Trump administration have reached an agreement to lower tariffs on UK-made cars entering the US from 25% to 10%, but this change will not take effect until the end of June. In the meantime, manufacturers are still subject to the higher rate.
Lotus is primarily owned by the Chinese company Geely, which is currently reorganizing its diverse portfolio of car brands, including Volvo, Polestar, and Lynk and Co.
The company currently produces cars in both Norfolk and Wuhan, China.
Lotus was founded in the early 1950s by engineer Colin Chapman and moved to Norfolk in the 1960s.
In April, the carmaker announced that 270 jobs would be cut “due to volatile and changing market conditions, including the US tariffs.” This decision follows previous job cuts last year, but the company remains committed to the UK and states that this restructuring is necessary to improve competitiveness.
President Trump has recently increased taxes on various goods entering the US in an effort to promote the purchase of American-made products by businesses and consumers.
Car shipments to the US were previously subject to a 2.5% tariff, but now face higher rates.
However, if a deal with the US had not been reached, UK exports would have been taxed at 27.5% instead of the current 10%. This lower tariff only applies to 100,000 British cars imported to the US per year, which matches the number of vehicles exported from the UK to the US last year.