Lotus Technology Inc. (NASDAQ: LOT) saw its stock soar 6.61% in pre-market trading on Wednesday following the release of its first quarter 2025 financial results. The luxury electric vehicle maker reported narrowed losses and improved gross margins, despite a significant decline in revenue.

The company's Q1 2025 report showed total revenues of $93 million, a 46% year-over-year decrease from $173 million in the same period last year. However, Lotus Tech managed to narrow its net loss by 29% to $183 million, compared to $258 million in Q1 2024. The operating loss saw an even more substantial improvement, decreasing by 56% year-on-year to $103 million.

Investors appear to be responding positively to the company's improved gross margin, which reached 12% in Q1 2025, up from just 3% for the full year of 2024. This recovery was attributed to easing impacts from prior destocking efforts. Additionally, Lotus Tech delivered close to 1,300 vehicles during the quarter, with sales primarily concentrated in Europe, North America, and China markets. The company also highlighted strategic developments, including the launch of a national-level GT single-make racing series in China and Malaysia, and plans to unveil its first PHEV model later this year.