Ref: Start of Elise Shipments

I am pleased to announce that Lotus Cars USA will begin to ship the 2005 Elise to you beginning late in the week of July 12, 2004. Thus we begin to satisfy the enthusiasts who have created such a positive feeling of enthusiasm for Lotus' latest product.

The ramp up in production is now well underway and by the end of July 2004, Lotus Cars will have produced nearly 250 US specification Elises. Lotus Cars USA is also in the process of installing a new computer system that will support our business and provide more information to you. We thank you and your customers for being patient as we work through these start up issues. From here on, we will be providing more information to you so that you will know what is happening with your car orders. Following is what to expect in the next couple of months:

- We will start to ship cars to dealers the week of July 12. All dealers should have their first car by the end of July. Due to some issues with components that we previously mentioned, some dealers may get a customer car before their demo, but your demo should be close behind. The cars that arrive over the next few weeks will be slightly out of order due to some of these component issues. August will see a significant increase in cars to you as we deliver those 250 cars that will be built through July 31.

- We are getting a better flow of information from the factory and as a result, your Regional Sales Manager will be forwarding reports to you on vehicle status about once per week. Expect these to start in mid July. This will give you the tools to answer that often asked question, "When will my car be here?" Your Regional Sales Manager will be in close contact during this time.

- The allocation volume that we announced in February of this year will be met, but with about a one month delay. This means that our original plan to have that allocation cover production from April - August now means that this volume will be produced from May - September and those vehicles will arrive at your dealerships by late October.

- We will be calculating the next allocation in the coming weeks. By the end of July, you should know about how many cars will be produced for your dealership from October through the end of December 2004. This time we will give you a tentative production month so that you can work with your customers to anticipate when their cars will arrive.

- Information on vehicles will improve throughout the remainder of the years as the pipeline becomes full and shipments become more consistent. We anticipate that by late October production will be at full normal production. Late in the 3rd quarter 2004, Lotus will launch dealer interfaces for our new computer system. This will allow you to go on the web to order, manage and retail your vehicle inventory.

There will be more news on various programs soon, but the best news is that the Elise will be in your showrooms in July. Thanks again for your support and understanding during the transition. I sincerely hope that your patience will be rewarded!

Sincerely,

John A. English

President and CEO

Lotus Cars USA