Page 2 of 5

The uprated engine will power a car that is approximately 150 pounds heavier than the current Elise. The added weight will come largely from the addition of air conditioning, a radio, an air bag, side impact protection and a larger radiator. A stripped-down variant remains a possibility, depending on certification requirements, but it is expected to account for no more than 10 percent of the total sales volume. According to a source, the added weight will not significantly affect the character of the car, and its performance will be equal to or better than that of the Elise being sold now.

Arnie Johnson, the chief executive officer of Lotus Cars USA, had hoped to be able to announce the approval of the federal Elise project at Lotus, Ltd.’s 21st Annual Lotus Owners Gathering in late August. Instead, he freely shared with meet attendees his frustration with the company’s slow decisionmaking process, as well as his hope for a positive resolution at a Lotus board meeting that was scheduled for September 5. A day before the meeting, however, a company spokesman feigned ignorance that it was pending. And, after the meeting had taken place, the spokesman continued to insist that the idea of an Elise-type model for the U.S. market was still being studied and that a firm decision had not yet been made.

In fact, the £8 million project was approved at that meeting, with Tengku Tan Sri Mahaleel, the boss of Lotus owner Proton, present and giving it his blessing. However, an official announcement has been withheld because there is some concern that it could adversely impact current Elise sales. This is because the federal Elise will be developed as a world car, with the U.K. and Europe slated to begin getting it a couple of months after it goes on sale in the United States.

Following ten months of manufacturing delays and ramping up, Lotus is now producing 60 Elises per week and maintaining a consistent, decent order backlog of three months. But that is nothing like the year-plus backlogs that existed after the model first became an unexpectedly hot seller. As a result, there is significant sentiment within the company’s management for holding off on an official announcement as long as possible, which was done with the S2 car. The opposing view is that, rather than selling against a year-long drumbeat of bad Lotus news – production delays, the suspension and subsequent cancellation of the M250 mid-range model, the sharp decline in Lotus Engineering’s business, the layoff of hundreds, the shuffling of the company’s leadership, and sporadic rumors that the company is for sale – getting out significant, positive word of Lotus’s future plans can only bolster the confidence of potential buyers and current car sales. Next Page