Lotus has unveiled restructuring plans that could see up to 550 jobs axed at its historic Norfolk factory, in the latest sign of strain across the UK’s car industry.

The sports car manufacturer, owned by China’s Geely, confirmed on Monday that it has entered a consultation process with staff at its Hethel headquarters, where around 1,300 people are employed. The site has been the home of Lotus production since 1966 and remains central to its global operations.

The cuts, which would affect roles in engineering, manufacturing and support services, come as the sector grapples with political and economic uncertainty — including a surge in US import tariffs on UK-made vehicles introduced by Donald Trump.

A spokesperson for Lotus said the proposals were designed to create “a flexible and agile business model” that would allow the company to scale production in line with global demand. “We believe this is necessary in order to secure a sustainable future for the company in today’s rapidly evolving automotive environment, which is seeing uncertainty with rapid changes in global policies, including tariffs,” they said.

The UK struck a trade deal with the US earlier this summer that reduced tariffs on cars exported to America from 27.5% to 10%. But this remains far higher than the 2.5% levy in place before Trump’s new “liberation day” trade policy came into effect.

Lotus said the restructuring would be “vital to enhancing future competitiveness”, adding that it remained fully committed to the UK. “Norfolk will remain the home of Lotus sports cars, motorsports and engineering consulting operations,” the company said. It is also “actively exploring” ways to diversify its business model, including potential third-party manufacturing deals.

In June, the firm had denied reports that it planned to close the Hethel site in favour of new production facilities in the US, after speculation linked to its Chinese parent company.

The Department for Business and Trade said it recognised the “significant long-term challenges” facing carmakers and acknowledged the uncertainty created by global tariffs.

A spokesperson said: “We know this announcement will be concerning for workers and their families. This government inherited some of the highest industrial energy prices in the world, while businesses most impacted by global tariffs have faced increased pressures. But we have also secured landmark trade deals, including our deal with the US that saved thousands of jobs in Britain.”

The restructuring announcement comes as UK carmakers face an uneven recovery from the pandemic, mounting costs from Brexit-related trade friction, and intensifying global competition in electric vehicle production.